3.0 Overview (6/03)
3.1 Types Of Specifications and Risks (1/98)
3.1.2 Performance Specifications (1/98)
3.1.3 Brand Name or Equal (1/98)
3.2 Using Consultants to Prepare Specifications (1/98)
3.3 Specifications for Equipment and Supplies (1/98)
3.4 Specifications for Construction (1/98)
3.5 Statements of Work for Services (1/98)
§ 8.c (1) of FTA Circular 4220.1E requires that all solicitations shall:
(1) Incorporate a clear and accurate description of the technical requirements for the material, product, or service to be procured. Such description shall not, in competitive procurements, contain features that unduly restrict competition. The description may include a statement of the qualitative nature of the material, product, or service to be procured and when necessary, shall set forth those minimum essential characteristics and standards to which it must conform if it is to satisfy its intended use. Detailed product specifications should be avoided if at all possible. When it is impractical or uneconomical to make a clear and accurate description of the technical requirements, a "brand name or equal" description may be used as a means to define the performance or other salient characteristics of a procurement. The special features of the named brand which must be met by offerors shall be clearly stated.
§ 15 of the Master Agreement states that:
d. Exclusionary or Discriminatory Specifications. Apart from inconsistent requirements imposed by Federal statute or regulations, the Recipient agrees to comply with the requirements of 49 U.S.C. § 5323(h)(2) by refraining from using any Federal assistance awarded by FTA to support procurements using exclusionary or discriminatory specifications.
e. Bus Seat Specifications. A State or local government recipient may use specifications conforming with the requirements of 49 U.S.C. § 5323(e) to acquire bus seats.
As a recipient of public funds you will have to keep in mind that you represent the government, whose objectives in spending taxpayers' money will always include, as one of its goals, the goal of full and open competition. It is easy to lose sight of t his under the pressure of completing a project on time. Many programs in your domain have political sensitivity and media visibility. The temptations will be great to "get something out now," and it will always be easier to respond to the immediate pressure than to do a careful and thorough job at the outset. But time taken here, in the careful research and drafting of the specifications, will invariably reward you with a better product, at a lower cost, and with far fewer claims and delays during the life of the project. Another age-old problem in this area of drafting specifications is the desire to push the state of the art to a new level, to have the best possible system, regardless of cost. Government organizations tend to be applauded for the visible quality of the things they do, whether it is their services, or major transit systems. But against these real-life pressures stands the Federal and State Government policy to define the "minimum needs" and to avoid specifications which might unduly restrict competition. We need to remind ourselves that our industrial suppliers are also taxpayers whose tax dollars are helping to finance this procurement; as such they are to be given every opportunity to compete for the work they are helping to finance.
Technical Specifications and Statements of Work must clearly describe the products and services to be procured in terms which will permit full and open competition and which will meet the buying agency's minimum essential needs.
Click here to return to the top of document
3.1 TYPES OF SPECIFICATIONS AND RISKS
Specifications may be very detailed in describing the product or work to be done, or may simply require an end result, or may contain combinations of these two approaches. There are different levels of risks and responsibilities inherent in these different types of specifications. As a general rule the more design details there are in the specification, the more the buying agency becomes responsible for the performance of the product. Conversely, the more the specification describes the performance of the product instead of it's design features, the more responsible the contractor becomes for the end product. The legal theory involved in these cases is the implied warranty of specifications. 1 Following is a discussion of the various types of specifications and the risks inherent in each type.
Specifications detailing the manner or method of performance are often treated as design specifications. Contrasted with these are performance specifications, which leave the details of performance, and the details of design, to the contractor's discretion. Design specifications are those which set forth precise measurements, tolerances, materials, in process and finished product tests, quality control, inspection requirements, drawings and other specific information. It is this design type of specification, dealing with the details of the work, which the contractor is "required to follow as one would a road map," which gives rise to implied warranty. Under this type of specification, the buying agency (as the author of the specifications) will be held responsible for design and related omissions, errors, and deficiencies in the specifications and drawings. 2 There is an implied warranty that the detailed designs or processes will result in an end item which functions as required. Conversely, there is no implied warranty where the specification simply sets forth an objective or end result to be achieved, and the contractor is free to select the means of accomplishing the task, in which case he assumes responsibility for that selection. 3 In those cases where the specification contains both design and performance requirements, it will depend on what portion of the specification causes the contractor's difficulties, whether he has discretion to choose how to do the work. 4
Specific situations working to relieve the contractor from end item performance responsibility would include:
- When the contractor is left no discretion or choice in the materials to be used. 5
- When specifications set forth dimensions and the item built to the dimensions cannot be used as anticipated because of those dimensions. 6
- When specifications define a method of performance or the particular manufacturing processes a contractor must follow (e.g., detailed procedures for pouring concrete, detailed soldering methods, etc.) 7
- When specified equipment cannot be successfully used in performing the contract. 8
- When detailed specifications require performance contradictory to local codes or ordinances. 9
- When the specifications provide for alternate methods of performance, and the contractor selects a method from among alternatives in the specification, the contractor will not be liable if the alternative does not accomplish the desired results. 10
DISCUSSIONPerformance specifications dictate the performance of the end product, not how the contractor will do the work. These are specifications which give the contractor discretion in how to achieve the end result called for by the contract. 11 Performance specifications place the greatest degree of responsibility on the contractor and represent the lowest degree of legal risk (but not necessarily the lowest program risk) to the buying agency. It must be s aid, however, that there are valid reasons for specifying "design" type requirements within performance specifications, as where standardization is needed, where there is an opportunity to avoid duplication of design costs which have already been incurred, etc.
As a general rule, when a performance-type specification is used, the buying agency will not be liable for a contractor's increased costs in performing the contract unless the performance specification embodies requirements which are impossible to attain. 12
It should also be noted that the fact that the buying agency specifies a minimum requirement for some component or some aspect of performance (e.g., "at least 3 hp"; "no more than 2" wide") does not change a performance specification into a design specification; i.e., the buying agency is not warranting that an item which meets the minimum requirement will perform properly when incorporated into the system. For example:
- A provision that surfaces be at a certain specified minimum temperature when painted was not a warranty that satisfactory results would be obtained at that temperature. 13
- Where the agency specified a minimum of not less than 14-gauge steel it was not warranting that 14-gauge would meet performance requirements. 14
These are specifications which require a particular manufacturer's product, part number, or model. The specification may allow for an "equal" product and should clearly set forth the salient physical and functional characteristics of the brand name pro duct. Under this type of specification if the contractor uses the brand name product or an approved "equal," the buying agency assumes the responsibility for proper performance (assuming the contractor used the product in the proper way). If the contractor elects to manufacture an equal product in-house, he will be responsible that the product performs equally with the specified brand named product. The BPPM Section 220.127.116.11.1 contains extensive guidance on the use of "brand name or equal" specifications.
Click here to return to the top of document
§ 8.a.(5) of the FTA Circular 4220.1E requires that grantees avoid situations known as "organizational conflicts of interest." An organizational conflict of interest arises when a contractor, because of other activities, relationships, or contracts, is unable or potentially unable, to render impartial assistance or advice to the grantee, or when a contractor's objectivity in performing the contract work is impaired, or when a contractor has an unfair competitive advantage.
The FTA Circular envisions two distinct problems when using consultants to prepare specifications or statements of work: (1) that the consultant will be biased toward a particular product or firm because he has business relationships with that firm or a financial interest in the product, or (2) that the consultant will have an unfair competitive advantage if he is allowed to compete for a product or service which he helped to define in a specification or statement of work. When a contractor is used to prepare or assist in the preparation of specifications and statements of work, care must be taken to ensure that the contractor will be completely unbiased in his decisions. Buying agencies must ascertain that the contractor has no financial or organizational relationship with a potential supplier which might motivate him to slant a specification toward that supplier. With respect to the unfair competitive advantage issue, contractors developing specifications should not be allowed to compete on procurements for which they prepared specifications.
Contractors who are working on specifications to be used for competitive procurements should be required to accept a "Limitation on Future Contracting" provision in their contract for the specification/ consulting work which precludes them from bid ding on the resulting procurement. Further guidance may be found in the BPPM Section 18.104.22.168.2 "Organizational Conflicts Of Interest."
It is also advisable when using consultants to draft procurement specifications to obtain a formal written certification with their proposal which describes all of their past, present or planned organizational, financial, contractual or other interests with organizations whose products or services may be offered in response to the procurement on which they will be consulting. Where there are such interests identified by the contractor, the Contractor should also be required to describe why it believes that performance of the proposed consulting contract can be accomplished in an impartial and objective manner. An example of a certification requirement used by the Federal Department of Transportation may be found in Appendix B.10. 15
Click here to return to the top of document
3.3 - SPECIFICATIONS FOR EQUIPMENT AND SUPPLIES
Plans, drawings, specifications or purchase descriptions should state only the minimum needs of the agency and describe the supplies in a manner which will encourage maximum competition, avoiding restrictive features which might restrict offers.
Planning - A market survey should be conducted to determine sources that offer products which meet the requirements. Caution must be exercised to avoid disclosure of agency budgets or other information which might give a supplier an unfair competitive advantage. Descriptive literature from one prospective supplier cannot be used as the sole basis for writing specifications. Determine what your essential requirements are and separate these essentials from those which are "nice to have" or desirable. In your research determine what the state-of-the-art is and develop your specification within the state-of-the-art.
- A performance-type specification is generally preferable to a design-type specification (i.e., don't tell the contractor how to do the work but rather specify the end-item's performance). This is in keeping with a goal of maximum contractor responsibility and minimum risk to the buying agency. It may be necessary, however, to use design-type descriptions (as for components, tolerances, etc.) in certain situations, such as the need for standardization.
- The specification must set forth the minimum essential characteristics and standards required to satisfy the intended use (e.g., "no more than 2" wide"; "at least 3 hp"; "at least once per month").
- When "brand names" are being used for specific components, it may be advisable to include at least two brand names followed by the words "or equal". When so used, the specific features which must be met by offerors should be clearly stated. See BPPM Section 22.214.171.124.1.
- The specification must not only describe the product but must also include reliability and quality assurance requirements (Quality Control Plan).
- Criteria for inspecting, testing and accepting the product will have to be included in the specification.
- Preservation, packaging, packing, and marking requirements will also have to be addressed.
- Include a Contract Data Requirements List (CDRL) to tell the contractor what documentation is required, when it is to be delivered, and whether the documents need approval (e.g., drawings, maintenance recommendations, master parts list, shipping/ handling/ storage procedures, etc.) When buying major systems be sure to require a comprehensive spare parts data package as a deliverable item. This will be necessary for competing the procurement of spare parts after the initial complement of spares has been used.
- Is training needed for users and those who must maintain the equipment? Are maintenance manuals needed?
- Do not include contractual terms and conditions, such as, cost/price information, warranties, delivery information, etc.
- Write sentences which are short, concise and simple.
- Use decimals instead of fractions.
- Don't use open-ended requirements such as "as directed," "satisfactory to," etc.
- Do not use unfamiliar words, colloquialisms or words which are ambiguous.
- When you have finished, read your specification and ask yourself, "Is there any way that anyone could misinterpret this statement?"
- You may wish to consider standardizing your Agency's approach to the format and content of specifications and statements of work. Appendix B.2 provides a Specification/ Scope of Service Guide which contains guidelines and recommendations for developing specifications, data sheets, and statements of work for supplies, equipment and services. 16
The technical provisions of construction specifications must be in sufficient detail so that, when used with the applicable drawings and the documents incorporated by reference, bids can be prepared on a fair and competitive basis. In contracting with public funds the essential objective in drafting specifications is to satisfy the fundamental public policy requiring full and open competition. This objective is not only a Federal requirement but most states and local governments have similar statutes. 17
Contracting books, manuals, etc. - Volumes have been written about the forbidding and exotic world of construction contracting, and we would like to begin by advising you to obtain some essential roadmaps for this journey, beginning with a comprehensive text entitled, appropriately, Construction Contracting. 18 We would also recommend you obtain a copy of the Construction Contract Administration Manual (which is devoted entirely to construction contracting) produced by a public agency working with FTA grant funds. 19
- Materials, equipment, components or systems should be described, where possible, by reference to documents generally known to industry. Such documents include Federal, military, or nationally-recognized industry, and technical society specifications and standards. The standards which best represent no more and no less than the buying agency's minimum needs should be selected for incorporation by reference into the construction specifications.
- If you employ an A/E firm to develop your specifications be sure they are warned against the use of proprietary specifications, i.e., writing a specification "around" a particular manufacturer's product, effectively precluding competition. This is a common practice among A/E firms, especially when a particular product has a proven track record, but the practice conflicts with the objective of full and open competition in public contracting.
- Keep the specifications as simple as possible. One court used these words:
"A contractor should not be required to wade through a maze of numbers, catalogues, cross-reference tables and other data resembling cross-word puzzles in order to find out what the government requires in an invitation for bids." 20
- You may want to consider using an "Order of Precedence" clause telling bidders which bid documents are to be relied on in the event of a conflict within the documents. You should choose a clause that places the most important part of the bid package in the most important position. For example, if you are certain that the drawings are correct, your clause could give the drawings priority over the specification.
- Complex specifications are best discussed with bidders at a pre-bid conference but be careful to advise bidders that none of the explanations at the conference will qualify the terms of the specifications, which can only be modified by written amendments.
- Be sure to review carefully FTA Circular 4220.1E and the Master Agreement (MA) for requirements which may affect your specifications. Examples would include:
- Preference for recycled products. 21
- Use of metric system. 22
- Seismic safety for construction projects. 23
- Environmental requirements. 24
- Requirements of the Americans with Disabilities Act. 25
- Preference for recycled products. 21
- Describe all of the contractor's obligations as far as meeting codes and standards that are applicable to the project (local, State, and Federal).
- Review the suggestions above for Supplies and Equipment, Section 3.3, for applicability to construction specifications.
Click here to return to the top of document
3.5 STATEMENTS OF WORK FOR SERVICES
A statement of work, rather than a specification, is used for services contracts. A statement of work defines the work required of a contractor, either to design the equipment to be procured or to provide services which are not related to the procurement of hardware.
Statements of work should include the following elements:
- When buying services on a "level-of-effort" basis, i.e., when specifying the number of labor hours to be furnished by the contractor, be sure to define the labor categories/hours for each and define the minimum years of experience and licensing requirements (CPA, PE, etc.) for each.
- Include, if applicable, a detailed list of all data, property and services which will be provided to the contractor by your Agency for his use in performing the contract.
- Detail all tasks the contractor must perform, and specify coordination requirements.
- Specify the data that must be submitted for approval. Also define the schedules for initial submission and the review/approval time required.
- Describe all the standards the contractor must fulfill, including Federal, State, and local standards that are applicable to the project.
FTA MA - Federal Transit Administration Master Agreement
1 - United States v. Spearin, 248 U. S. 132 (1918).
3 - J. L. Simmons Co. V. United States, 188 Ct. Cl. 684, 412 F.d. 1360 (1969) at 689.
5 - J. L. Simmons Co., id.
11 - Aleutian Constructors v. United States, 24 Cl. Ct. 372 (1991).
12 - Intercontinental Mfg. Co. V. United States, 4 Cl. Ct. 591 (1984) at 595.
15 - Transportation Acquisition Regulation (TAR) Clause 1252.209-71 DISCLOSURE OF CONFLICTS OF INTEREST (Oct 1994).
16 - Prepared by Office of Procurement, The Metropolitan Transit Authority, Harris County, Texas, dated January 1987.
18 - The George Washington University's National Law Center's Government Contracts Program has published a number of excellent books dealing with Government contracting. One such book is Construction Contracting (The George Washington University: Washington, D.C., 1991). For a complete catalogue of contracting-related texts contact: The GW Bookstore, 800 21st. St., N.W., Washington, D.C. 20052, Phone: (202)994-6870, Fax: (202) 296-9445 http://www.bkstr.com/webapp/wcs/stores/servlet/StoreCatalogDisplay?storeId=10370&langId=-1&catalogId=10001.
19 - Construction Contract Administration Manual, Port Authority of Allegheny County, Procurement Department, 2235 Beaver Avenue, Pittsburgh, PA 15233-1080, Phone: (412) 237-7000, FAX: (412) 237-7101. This Manual contains many worthwhile things, such as procedures for bid document preparation, bidding, contract award, and contract administration; General Contract Provisions; a multitude of forms for reporting, evaluating, administering, etc.
20 - Gorn Corp. V. U. S., 424 F 2d 588 (Ct. Cl. 1970), noted at 592.