Brand Names

Q. We currently own a Toshiba laptop and wish to go out for a Toshiba (or Toshiba authorized) laptop maintenance program vs. basic generic laptop service. The term is a 2 year term. Do we need to request a sole source justification from the user for specifying a brand name? A. This is not a sole source situation. You will be getting competitive bids from companies qualified to service Toshiba computers. We do not see this as a restriction on competition.

Q. The City of Tucson is currently putting together specifications for a bus bid. The bid contains hundreds of items/components. For approximately 24 of those items, we are presenting the component as a "brand name or approved equal." All other items do not reference a brand name. For those items that are presented as a "brand name or approved equal, we list the salient characteristics of each component. (The salient characteristics are performance requirements. They do not include design requirements.) There are a few main components such as the engines, transmissions, and HVAC that the City would like to keep the same brand that we are currently using or find something that is very similar. For these items, the City has concerns pertaining to training issues, impact on existing inventory, requirement to buy additional diagnostic equipment required, etc. Presently, we have specified "brand name or approved equal" for these components as well and have included the salient characteristics. We would like to promote fair and open competition and, accordingly, have presented many of the components as a "brand name or approved equal." To aid in our fair evaluation of a proposed product, we have developed a checklist for how we intend to evaluate a proposed product. This checklist is not included in the bid, but we intend to maintain it in our files as justification on how we evaluated proposed products. The checklist includes these evaluation criteria: Is additional inventory required? Yes or No. Is additional training required? Yes or No. Is additional diagnostic equipment required? Yes or No. Is additional software required? Yes or No. Are additional tools required? Yes or No. Is local support available? Yes or No. Does it have significant financial impact to the City? Yes or No. Does it fully integrate with necessary components? Yes or No. We would like to use this evaluation checklist to approve or reject an "approved equal" for the major components (i.e., the engine, transmission, and HVAC). For all other components, we do not intend to use this checklist. Here are our question(s): Is it acceptable to evaluate an "approved equal" in this manner? Can we evaluate a proposed product on things other than the salient characteristics of the product? If we do use this checklist, do we have to use it to evaluate ALL of the "approved equal" components, such as connectors, switches, etc.? Can we just use it for the major items for which we have these additional concerns? A. We would agree with your proposed approach of using a two-step procurement process in order to evaluate the proposed "brand name or equal" submissions prior to the solicitation of bids in step two. In discussing this approach with FTA's Chief Counsel's Office, our recommendation would be that you disclose to prospective bidders the factors you intend to evaluate (performance of the component/subsystem, inventory requirements, training, etc.), and invite the bidders to furnish their thoughts as to how the agency might optimize the maintenance, spares and general operational efficiency. How, in other words, would the bidder propose to measure the total cost of ownership given the present fleet configuration. This suggestion is based on the thought that a bidder may be able to offer information as to total ownership costs that you would want to consider before making your determination of what you will accept as an "equal' component for step-two bidding. You would of course be free to conduct discussions and fact-finding with the various bidders in step-one as part of the evaluation process, and also, as you suggested, advise them how they might change or improve their products for later bidding opportunities with your agency.

Q. Our region has invested a significant amount of money and infrastructure into our transit software and hardware (Automatic Vehicle Locators, scheduling, mapping software, etc.). We need to purchase a particular type/brand of mobile data terminal. Can we bid this using "brand name or approved equal?" A. It is our understanding that you intend to solicit competitive bids or proposals for paratransit vehicles and that the vehicles must include a mobile data terminal (MDT) subsystem that is compatible with existing systems on your paratransit vehicles. It would be permissible and appropriate for you to use a brand name or equal specification for the MDTs. You will have to include the "salient characteristics" of the MDT for purposes of evaluating "equals." The FTA Circular 4220.1E paragraph 8.a.6 gives some guidance on how salient characteristics may be defined. The annotated version of the Circular with FTA explanatory comments may be found at FTA Circular 4220.1E. We would also note that the Circular paragraph 8 - Competition, footnote #26, may be helpful with regard to specifying the "salient characteristics."

Q. Our agency needs to implement a bus stop improvement program. We plan to purchase new street furniture and install it. We are thinking about going out with a Furnish and Install type solicitation and call out a brand name of furniture that we want to buy or approved equal. The intent is to award a contract to a construction company that can buy the furniture for us and install it. Is this compliant with FTA regulations? A. We believe your description of a competitive solicitation with a brand name or equal specification for the furniture complies with the FTA Circular 4220.1E.. We would also note that the Circular paragraph 8 - Competition, footnote #26, may be helpful with regard to specifying the "salient characteristics."

Q. If justified, can a brand name be specified in a solicitation document in the following scenario? We currently have Hannan (Mfg) Bike Lockers at our rail stations. We are currently in need of 34 more, but they have to be Hannan because of the stacking capabilities onto the current bike lockers. We do not wish to allow an approved equal because of past experience. We are, however, not limiting competition because we are doing an IFB for the purchase, delivery, and installation. We are aware of at least 3 firms who can acquire the Hannan Bike Lockers and have the capability of installing them. The question is, can we specify Hannan without going through an approved equal time period? It is not really sole source procurement and the BPPM doesn't specifically address this situation (that I can find). We have justification from the technical department that explains the need for the Hannans. A. We would agree that the proposed procurement is not a sole-source procurement; however, FTA Circular 4220.1E, paragraph 8.(6) considers the specification of only a "brand name" product, without listing its salient characteristics and not allowing "an equal" product to be offered, as a situation which is "restrictive of competition." As such the practice would violate the "full and open competition" requirement of the Circular. Having said this, however, we would also add that there are times when considerations like standardization of parts, compatibility with existing systems, ease of maintenance, etc. will require the procurement of items manufactured by the same contractor that manufactured existing systems. This may be the case in your situation, and if it is we would suggest that you document your file to explain why the Hannan Bike Lockers must be the brand installed, and have the justification signed by the same agency officials that would process a sole-source justification. Explain to them that while the solicitation will be competitive, there is a restrictive specification that the agency feels is justified. In the event of protest, you will have covered the bases.

Q. Can we specify a particular brand name component in order to standardize our equipment? We have a series of construction contracts to build a light rail line. The agency wants to standardize as much major equipment as possible for maintenance and safety purposes, particularly elevators and escalators, but do not want to provide it as owner-furnished material. Can the specifications contain a sole source like this, if the first contract was competitive? A. FTA Circular 4220.1E* states in paragraph 8.a. (6) that the use of brand names without listing salient characteristics and allowing "an equal" product to be offered is a practice that is restrictive of competition and therefore a violation of the "full and open competition" requirement. This means you would have to justify the action as a "sole source" or noncompetitive procurement based on standardization/maintenance arguments and have it approved by those officials in your agency that have authority to approve of these procurements. You could then solicit competitive price proposals or bids using only the one brand as a requirement. You may want to process this procurement approach through your agency management personnel that have authority to approve of sole source procurements. You can describe your approach and the rationale based on standardization of equipment. You could then notify bidders of your intent in the first IFB that is released. This may produce better prices in the first bid. You may also want to protect yourself with respect to later bids by requiring the elevator/escalator suppliers to certify in the first bid that they will sell later units at prices that are consistent with the prices quoted for the first units. This would make a reasonable allowance for price inflation as measured by published industry price indices over the period of time between the IFB's. ____________ * FTA Circular 4220.1E.

Q. Is there a way, under FTA Circular 4220.1E, to standardize the purchase of computers, i.e. desktop PCs and Laptops, by using specific brand names? Would it be acceptable to select a preferred brand and solicit competitive pricing from an adequate number of retailers or distributors of that specific brand? A. The answer to your question is that FTA Circular 4220.1E* states in paragraph 8.a(6) that the use of brand names without listing salient characteristics and allowing "an equal" product to be offered is a practice that is restrictive of competition and therefore a violation of the "full and open competition" requirement. This means you would have to justify the action as a "sole source" or noncompetitive procurement based on standardization / maintenance arguments and have it approved by those officials in your agency that have authority to approve of these procurements. You could then solicit competitive price proposals or bids using only the one brand as a requirement. The only other approach we know of is one practiced sometimes by the Federal government through its "8a" program, where contracts are negotiated with Disadvantaged Business Enterprises (DBE's) without competitive proposals. In that case you would need to determine if your state or local procurement procedures would allow for a noncompetitive contract award to a DBE who is a distributor of the type of computers you wish to buy. ____________ * FTA Circular 4220.1E.   Q. If TMTA has determined that a certain brand and model of computer would work best for our currently installed system, can we list that brand name and model in the RFP and let different vendors send in their RFPs for that particular product? A. FTA Circular 4220.1E, section 8 a. (6), requires that when a brand name is used in a competitive solicitation, an "equal" also be allowed to be offered, and the RFP must then state the salient characteristics of the "equal." If you insist on a particular brand and do not allow offerors to submit equals, then you must process a sole source justification through your agency management, documenting why only one brand will meet your needs. The FTA Best Practices Procurement Manual covers the subject of brand names in section 2.4.2.2.1 – Brand Names.  The BPPM may be found at:  http://www.fta.dot.gov/funding/thirdpartyprocurement/grants_financing_6037.html    The FTA Circular 4220.1E may be found at: http://www.fta.dot.gov/documents/fta_c4220_1E.doc