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Single Source Justification

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a. Does the FAR require a brand name justification when a project requires an expansion of an existing brand name security system?

Clarification a1 - do you require brand name or equal for the expansion? Part 15 (Part 6), Part 14 (Part 6), Part 13, and Part 16.5 all reference brand name justification requirements (no justifications for brand name or equal as used is 52.236-5, and Part 11).

b. Since none of the contractors protested the use of the brand name in the specifications, does this in any manner waive the liability assuming the regulatory sole source justification was required prior to issuing the solicitation?

Clarification b1 - You seem to be asking if the contractor's absence of a timely protest waives the liability. What liability are you referring to?

c. Does the fact that the brand name justification entitled the contractor to an equitable adjustment to the contract since it claimed that it only bid the expansion at a cost of $20,000 and has now found the cost from the brand name contractor to be in excess of $100,000?

Clarification c1 - If you rephrase this perhaps you can get an answer that will help you. As-is, any answer is based on an assumption of what this question means.

In order to get, truly, helpful responses we have to ensure we ask clear questions. After all, the answers given are in response to the question asked. If the question is wrong the answer is sure to follow (even if answered correctly, you just answered the wrong question correctly).

Jamaal, I think that the questions have been answered in a way-

a. The government didnt specify "brand name only" or a "single source" for this security system requirement. It allowed the contractor the flexibility to seek other solutions, if any exist. It described the Brand Name and described the performance criteria for the system and for the installer.. Contract clause FAR 52.236-5 -- Material and Workmanship allows "or equals" in such instances unless, the contract otherwise specifically prohibits an "or equal" solution.

b. This matter isnt a "protest". It is an REA or claim.

c. It doesnt appear that the contractor's claim/REA has merit. Even if only the brand name supplier or its approved installers can fulfill the requirements, the government provided the contractor and/or its sub enough information to determine the market restrictions and the technical possibilities of integrating the new work into the existing system, which would be necessary unless it completely replaced the existing system. The firms should have done the necessary investigations before formulating their bid prices to design, furnish, install and integrate the new work into the existing system. The government didnt withhold any information that would have prevented the contractor from intelligently pricing the requirement.

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I am intrigued by this section of the specification:

1.5.2.1 Installer's Qualifications
Prior to installation, submit data of the installer's experience and certified qualifications. Show that the installer who will perform the work has a minimum of 2 years experience successfully installing ESS of the same type and design as specified herein. Include the names, locations, and points of contact of at least two installations of the same
type and design as specified herein where the installer has installed such systems. Indicate the type of each system and certify that each system has performed satisfactorily in the manner intended for a period of not less than 12 months.
I have to confess that my experience with construction contracts is limited, but this appears to require submission of past performance information post award. How would this section work in real life? In other words, is this intended to give the government the ability to veto the use of a particular subcontractor/installer? What would be the consequences of such a veto?

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I am intrigued by this section of the specification:

1.5.2.1 Installer's Qualifications
Prior to installation, submit data of the installer's experience and certified qualifications. Show that the installer who will perform the work has a minimum of 2 years experience successfully installing ESS of the same type and design as specified herein. Include the names, locations, and points of contact of at least two installations of the same
type and design as specified herein where the installer has installed such systems. Indicate the type of each system and certify that each system has performed satisfactorily in the manner intended for a period of not less than 12 months.
I have to confess that my experience with construction contracts is limited, but this appears to require submission of past performance information post award. How would this section work in real life? In other words, is this intended to give the government the ability to veto the use of a particular subcontractor/installer? What would be the consequences of such a veto?

Retreadtreadfed, in real life I have seen other instances of similar of performance requirements specified. And security systems are obviously of critical importance.

I think that the performance criteria are reasonably well defined and measurable: "at least two installations of the same type and design as specified herein where the installer has installed such systems. Indicate the type of each system and certify that each system has performed satisfactorily in the manner intended for a period of not less than 12 months. "

The phrase "Include the names, locations, and points of contact" might be a bit ambiguous for verifying satisfactory performance. Can the POC's be the owners' personnel or the installer's?

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We're talking about a SECURITY system.

In a sealed bid procurement in which such a system has to be expanded, the smart thing to do is insist upon use of OEM components or OEM-approved substitutes and the use of the OEM or an OEM approved installer to do the work. No substitutes! Since it is subcontract work, such a requirement should not restrict competition for the construction contract and, in fact, probably makes competition among construction contractors more viable. Using a performance specification and allowing the construction contractor to use other than OEM components and installation could lead to trouble. How much money would that save? Would it be worth the risk?

We don't even know what kind of security system it is. Is there a guarantee and a warranty? How would they be affected by expansion of the system by someone other than the OEM using substitute components? How old is the system? Is it still on the market? Has it been updated? Are original components still available? Ask the right bleeping questions, why don't you. Criminy.

My suspicion is that whoever wrote the construction specification didn't know what he or she was doing with respect to the security system. It is clear that TC2012 isn't sure about the REA or claim. Moreover, he is now writing nonsense sentences like this one:

The inclusion of the existing brand name security system without a single source justification set a standard of the existing system quality and advises potential bidders of the brand name of the existing security system.

That makes absolutely no sense. How does not providing a single source justification set a standard for system quality?

Unless there is more to his story than he has dribbled out to us, TC2012 has nothing to worry about with respect to the contractor's REA or claim. In any case, he should quit screwing around at Wifcon and follow the advice that Joel gave him in Post # 8, which was:

You NEED to consult your agency counsel.

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As a future attorney I cannot pass up the opportunity to echo Joel and Vern in calling for consulting agency counsel.

With that said, I noticed that there was no discussion of the possibility that the brand name system could have been mandated by the agency or higher level. While it seems like a big fact to omit, if this is an Air Force procurement there were previously only three intrusion detection systems approved for physical security. Perhaps other agencies do not micro-manage as much as the Air Force, but it is entirely possible that the reason for the specificity had to do with legitimate: functions to be performed, performance required, or essential physical characteristics.

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I disagree. I do not believe that FAR requires justification for specification of a brand name product in a construction specification unless it would of necessity create a sole source procurement for the construction contract itself or would otherwise restrict full and open competition or maximum practicable competition for the construction contract. If anyone has evidence (not mere assertion) to the contrary, please let me know.

In any case, even if it does, failure to prepare such a justification would not, in and of itself, support a claim such as the one described above. There would have to be more.

Vern, you are correct that there could be circumstances where a SSJ would not be required for a specification that identified a brand name. For example, if FAR Provision 52.211-6, Brand Name or Equal, was included and the specification identified the item as a brand name or equivalent. Alternatively, the specification could identify brand name(s), but not restrict to that particular brand, such as in the case of Veterans Contracting Group, Inc., B-405940, January 12, 2012. In that case, the agency identified several brand name products that "may" meet the requirement, but the agency improperly rejected a bid that proposed a different brand. GAO held that use of "may" did not imply that bidders must only propose those brand name products.

However, restricting a specification to a single brand name can lead to trouble when you do not have a brand name justification. GAO has sustained protests where the construction specifications required a brand name, even when the agency instructions allowed alternatives. For example, in C. Lawrence Construction Company, Inc., GAO held that even though the agency's Instructions to Bidders section allowed Vendors to propose alternative brand products by seeking pre-approval by the agency, the restriction in the specification created an ambiguity that made bidders think the requirement was a brand name requirement. In this particular decision, the brand name specification was a very small part of the overall construction project.

"In our view, the provisions of this IFB were at best ambiguous and could reasonably have been interpreted by bidders such as Lawrence as requiring them to furnish ASI signs since no manufacturers other than ASI had been approved prior to bid opening. Given that the agency has not argued that only ASI signs will meet its needs, not only is this interpretation contrary to the statutory requirement that solicitations include specifications that permit full and open competition and contain restrictive provisions only to the extent necessary to satisfy the needs of the agency..., and potentially prejudicial to bidders who reasonably believed themselves to be precluded from using lower-priced quotations from other sign manufacturers in formulating their bid prices..., but it apparently is not what the agency intended... Because bidders could reasonably have interpreted the IFB’s terms in a manner

restrictive of competition, we sustain the protest" (C. Lawrence Construction Company, Inc., B-290709, September 20, 2002, p. 5).

I cannot think of any example where you would want to include a brand name in specification unless you 1) were specifying a brand name or equal; or 2) you had a justification to limit competition and were restricting to a particular brand.

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Vern, you are correct that there could be circumstances where a SSJ would not be required for a specification that identified a brand name. For example, if FAR Provision 52.211-6, Brand Name or Equal, was included and the specification identified the item as a brand name or equivalent. Alternatively, the specification could identify brand name(s), but not restrict to that particular brand, such as in the case of Veterans Contracting Group, Inc., B-405940, January 12, 2012. In that case, the agency identified several brand name products that "may" meet the requirement, but the agency improperly rejected a bid that proposed a different brand. GAO held that use of "may" did not imply that bidders must only propose those brand name products.Restricting a brand name in a specification can lead to trouble when you do not have a brand name justification. GAO has sustained protests where the construction specifications required a brand name, even when the agency instructions allowed alternatives. For example, in C. Lawrence Construction Company, Inc., GAO held that even though the agency's Instructions to Bidders section allowed Vendors to propose alternative brand products by seeking pre-approval by the agency, the restriction in the specification created an ambiguity that made bidders think the requirement was a brand name sole source. I cannot think of any example where you would want to include a brand name in specification unless you 1) were specifying a brand name or equal; or 2) you had a justification to limit competition and were restricting to a particular brand.

Metteec, the situation here isn't a protest, it is a claim or REA.

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mettec:

I don't know why you brought up Lawrence Construction. As you seem to understand, GAO did not sustain the protest because the agency used a brand name specification without justification. It sustained the protest because the solicitation was ambiguous and did not permit all bidders to compete based on the same understanding of the requirement. I don't see what bearing that decision has on this case. Whether a justification is required or not, lack of a justification, in and of itself, would not support a claim.

To me, requiring use of the OEM-approved equipment and installers when expanding a security system is common sense unless something about the system makes it unnecessary. A CO who can't justify that should find other work. As for ambiguity, how about:

Notwithstanding any other provision of this solicitation or of the prospective contract, with respect to work on the security system, only OEM-approved equipment and installers will be acceptable in the performance of the contract. No other equipment or installers will be acceptable.

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Good luck, TC. Looks like a problem between the sub and its sub that they are trying to push over to the govt.

Thanks Joel, and I agree with you. The subcontractor is qualified security systems, but not this brand of security system because it does not have the proprietary wiring information for the existing system and the government does not own that information. The system is a commercial item and the government does not own the data rights to the systems design as the system was not designed specifically for our application. Thanks again for all your input.

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Vern, you are correct that there could be circumstances where a SSJ would not be required for a specification that identified a brand name. For example, if FAR Provision 52.211-6, Brand Name or Equal, was included and the specification identified the item as a brand name or equivalent. Alternatively, the specification could identify brand name(s), but not restrict to that particular brand, such as in the case of Veterans Contracting Group, Inc., B-405940, January 12, 2012. In that case, the agency identified several brand name products that "may" meet the requirement, but the agency improperly rejected a bid that proposed a different brand. GAO held that use of "may" did not imply that bidders must only propose those brand name products.

However, restricting a specification to a single brand name can lead to trouble when you do not have a brand name justification. GAO has sustained protests where the construction specifications required a brand name, even when the agency instructions allowed alternatives. For example, in C. Lawrence Construction Company, Inc., GAO held that even though the agency's Instructions to Bidders section allowed Vendors to propose alternative brand products by seeking pre-approval by the agency, the restriction in the specification created an ambiguity that made bidders think the requirement was a brand name requirement. In this particular decision, the brand name specification was a very small part of the overall construction project.

I cannot think of any example where you would want to include a brand name in specification unless you 1) were specifying a brand name or equal; or 2) you had a justification to limit competition and were restricting to a particular brand.

Only example I can readily think of is when an existing brand name system needs to be expanded or modified. Existing facilities are being altered and existing systems in those facilities are being modified all of the time under construction projects. . i.e. heating, cooling, etc. -- usually these types of system have multiple sources who can perform the required modifications.

On the other hand, when you have a highly technical system, only the OEM knows the combination or has the technical knowledge and ability to change or expand the existing system. Most contractors who normally work with these types of system clearly understand that the OEM is the only one who knows how to expand the system, because they own the design and data rights to the commercial system. For example: my car's low pressure tire light will remain on until I take it back to the dealer who sold the car and he had a box which talks to the pressure sensors on the rim which tells the sensor everything is OK. Only the OEM has the magic box to do this.

When a bidder submits a bid to modify a technical system, would you not expect it to initially determine if they had the expertise and/or qualifications necessary to perform work specified and to the existing system identified as the "existing system". It does not make sense to justify why the government placed the name of the OEM in the specification. The bidding contractor needs this information in order to make the determination if they are qualified to alter the existing system. If I do not have the necessary proprietary information to design and expand an existing security system, then perhaps that is an indication that I should not bid on this work. Does the government need to explain this to any competent contractor? Also, the government has no direct control over the brand of the existing system. We have what we have.

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mettec:

I don't know why you brought up Lawrence Construction. As you seem to understand, GAO did not sustain the protest because the agency used a brand name specification without justification. It sustained the protest because the solicitation was ambiguous and did not permit all bidders to compete based on the same understanding of the requirement. I don't see what bearing that decision has on this case. Whether a justification is required or not, lack of a justification, in and of itself, would not support a claim.

To me, requiring use of the OEM-approved equipment and installers when expanding a security system is common sense unless something about the system makes it unnecessary. A CO who can't justify that should find other work. As for ambiguity, how about:

Notwithstanding any other provision of this solicitation or of the prospective contract, with respect to work on the security system, only OEM-approved equipment and installers will be acceptable in the performance of the contract. No other equipment or installers will be acceptable.

Vern, How about this statement:

WARNING: If you don't have the necessary experience and knowledge to expand the existing OEM system, request that you not submit a bid. Because if you submit a bid, and you don't have the expertise and technical ability, the general contractor will still be subject to providing the contractor that is capable to complete the required expansion under the contract, at no addition cost to the government.

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TC:

The second sentence does not make sense.

Vern, I completely agree, it does not make sense. However, this is the basis of the GC arguments. The government should have told in its single source justification required by FAR, that this brand name manufacturer has proprietary rights to all of the designs, components and drawings concerning its security system and they are the only ones who may modify it, unless you are able to get this information from them.

Just because the government purchased and installed a brand name system does not give it the rights to the detailed technical information of the system. Information that would be required to expand the existing system. Further, if the government would have presented a sole source justification what would it have said? I assume the justification would indicate the brand name of the existing security system and indicate that the contractor must be qualified to expand this system. Further, must be capable of obtaining access to the systems proprietary wiring information. The security system was not manufactured exclusively for the government, it is a commercial item. Since the government requires expansion of the system, a contractor must first determine if you can obtain access to the necessary proprietary technical data required to expand this brand of security system.

However, should that not have been obvious to any contractor with any knowledge of commercially produced alarm system. Manufacture routinely hold the data rights. Especially these wiring and data are not made available to the general public or to other contractors because they are proprietary to the system manufacturer and if distributed outside of their company, it would create a risk to the classified information they were designed to protect. This is not a security system for a home. This system was designed to protect a classified military facility. You would not want a potential terrorist to have access to the security system drawings. Any contractor working with these types of security systems for a classified facility should have automatically known that this would have proprietary data concerning the systems wiring would not be available to the general public or on the internet.

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Vern, I completely agree, it does not make sense. However, this is the basis of the GC arguments. The government should have told in its single source justification required by FAR, that this brand name manufacturer has proprietary rights to all of the designs, components and drawings concerning its security system and they are the only ones who may modify it, unless you are able to get this information from them.

Just because the government purchased and installed a brand name system does not give it the rights to the detailed technical information of the system. Information that would be required to expand the existing system. Further, if the government would have presented a sole source justification what would it have said? I assume the justification would indicate the brand name of the existing security system and indicate that the contractor must be qualified to expand this system. Further, must be capable of obtaining access to the systems proprietary wiring information. The security system was not manufactured exclusively for the government, it is a commercial item. Since the government requires expansion of the system, a contractor must first determine if you can obtain access to the necessary proprietary technical data required to expand this brand of security system.

However, should that not have been obvious to any contractor with any knowledge of commercially produced alarm system. Manufacture routinely hold the data rights. Especially these wiring and data are not made available to the general public or to other contractors because they are proprietary to the system manufacturer and if distributed outside of their company, it would create a risk to the classified information they were designed to protect. This is not a security system for a home. This system was designed to protect a classified military facility. You would not want a potential terrorist to have access to the security system drawings. Any contractor working with these types of security systems for a classified facility should have automatically known that this would have proprietary data concerning the systems wiring would not be available to the general public or on the internet.

I agree in principle with you, TC. As Vern said, go see your lawyer.

The few sole source claims decisions that I looked at the other day don't focus on whether or not the government justified a sole source acquisition. I don't think that the solicitation even has to mention that there is a sole source justification as long as it is evident what the system is and what the performance requirements are, does it? The decisions I reviewed didn't discuss that. Most of the sole source complaints to Congress and pre-award issues that I dealt with were from suppliers and other brand name installers, not general contractor primes.

A competent prospective prime contractor and/or its specialty sub or security system installer who is tasked to design, expand and integrate new work with an existing proprietary system, should investigate how it will have to tie into the existing, proprietary system before preparing its bid. I would expect that a good prime contractor would want to assure itself that the sub has done such investigations. I know on several source selections involving proprietary security or HVAC or Fire protection systems or other complex equipment, we learned during discussions that the prime was well aware of the complexities and pricing issues involved.

For goodness sakes, the specified performance requirements for the installer require certification that it has satisfactory experience with at least two security systems of "the same type and design as specified herein". If that alone didn't alert the prime to make sure that it's sub was aware of the requirements and qualified to perform the work, then nothing would.

You said that this will probably turn into a claim. Don't you have access to an agency lawyer? I handled many claims for the USACE but I always worked closely with our lawyers and the KO, who ultimately had to decide - after using his/her legal and CAB resources.

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TC2012,

Are you standing for the proposition that the Government should have done a sole-source justification and the poor contractor needs to be made whole? Or are you standing for the proposition that this is the contractor's problem to solve within the contract as written?

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TC2012,

Are you standing for the proposition that the Government should have done a sole-source justification and the poor contractor needs to be made whole? Or are you standing for the proposition that this is the contractor's problem to solve within the contract as written?

I am standing for the proposition the this is the contractor's problem to solve within the contract as written. The bidder should have verified that it was fully capable of expanding the existing brand name system prior to submitting its bid to the GC .

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I agree in principle with you, TC. As Vern said, go see your lawyer.

The few sole source claims decisions that I looked at the other day don't focus on whether or not the government justified a sole source acquisition. I don't think that the solicitation even has to mention that there is a sole source justification as long as it is evident what the system is and what the performance requirements are, does it? The decisions I reviewed didn't discuss that. Most of the sole source complaints to Congress and pre-award issues that I dealt with were from suppliers and other brand name installers, not general contractor primes.

A competent prospective prime contractor and/or its specialty sub or security system installer who is tasked to design, expand and integrate new work with an existing proprietary system, should investigate how it will have to tie into the existing, proprietary system before preparing its bid. I would expect that a good prime contractor would want to assure itself that the sub has done such investigations. I know on several source selections involving proprietary security or HVAC or Fire protection systems or other complex equipment, we learned during discussions that the prime was well aware of the complexities and pricing issues involved.

For goodness sakes, the specified performance requirements for the installer require certification that it has satisfactory experience with at least two security systems of "the same type and design as specified herein". If that alone didn't alert the prime to make sure that it's sub was aware of the requirements and qualified to perform the work, then nothing would.

You said that this will probably turn into a claim. Don't you have access to an agency lawyer? I handled many claims for the USACE but I always worked closely with our lawyers and the KO, who ultimately had to decide - after using his/her legal and CAB resources.

Joel, The issue remains in the discussion phase and has not developed into a certified claim. Yes, lawyers are available, but the contractor has not yet turned this into a claim. I believe it maybe somewhat premature to involve them at this stage in the discussion. Lawyers want the complete picture and we have yet to get the contractors final decision to proceed with the work as specified or fight through a claim. We hope to convince the GC that is arguments are flawed and if it choose to file a claim, it would be rejected unless some other information presented itself.

You are singing the same song as I am with your 2nd and 3rd paragraphs. I completely agree with what you are saying. We will soon see how this comes out. The KO has advised the contractor that all delays related to these discussion are his responsibility and that he needs to obtain the services of a qualified and competent subcontractor to perform the work required by the specification. By the way the specification being used for the security system is a standard DoD Unified Facility Guide Specification (UFGS) written and coordinated between all services of the US Military. So it is not something the A/E just came up with.

Joel, thanks for your input as we are in total agreement on the issues and approach to resolving this issue prior to formal claim actions. Not in the governments or contractors best interest to get into a protracted dispute or claim over this issue. GC make a mistake by accepting and unqualified subcontractor bid and the government cannot bail him out. Thanks!

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As a future attorney I cannot pass up the opportunity to echo Joel and Vern in calling for consulting agency counsel.

With that said, I noticed that there was no discussion of the possibility that the brand name system could have been mandated by the agency or higher level. While it seems like a big fact to omit, if this is an Air Force procurement there were previously only three intrusion detection systems approved for physical security. Perhaps other agencies do not micro-manage as much as the Air Force, but it is entirely possible that the reason for the specificity had to do with legitimate: functions to be performed, performance required, or essential physical characteristics.

The existing security system is a mandated qualified system for the type of Air Force facility undergoing expansion. The specification provided the brand name of this existing system and then provided detailed performance UFGS performance specification that was carefully drafted by the military for these systems, As you might be aware the drawings and connections required for this type of system are not posted on the internet and most probably closely held by the manufacturer.

With that being said, it remains the responsibility of the subcontractor bidding the expansion of this system to be qualified and capable of gaining access to the required connection necessary to expand the existing system. If a subcontractor, who is made aware of the existing systems brand and understand the meaning of the project facility title, a prudent subcontractor would have reasonably contacted the OEM to determine if it could gain access to the information necessary to expand the system.

Best of luck with your future endeavors as a new attorney. Contract law is a very interesting subject. Perhaps sometime more lucrative working against the government than for the government.

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Good luck, TC. Keep steering clear of "protest" arguments, which aren't germaine to the issues here.😭

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I am intrigued by this section of the specification:

1.5.2.1 Installer's Qualifications
Prior to installation, submit data of the installer's experience and certified qualifications. Show that the installer who will perform the work has a minimum of 2 years experience successfully installing ESS of the same type and design as specified herein. Include the names, locations, and points of contact of at least two installations of the same
type and design as specified herein where the installer has installed such systems. Indicate the type of each system and certify that each system has performed satisfactorily in the manner intended for a period of not less than 12 months.
I have to confess that my experience with construction contracts is limited, but this appears to require submission of past performance information post award. How would this section work in real life? In other words, is this intended to give the government the ability to veto the use of a particular subcontractor/installer? What would be the consequences of such a veto?

Retredfed

The installers qualification was placed in the specification to cover our backside. You would assume that anyone bidding to expand a security system would be qualified or they would not bid. Oh, but that is incorrect, as contractors do it everyday and then the GC is stuck with a contractor who is incapable of performing the required work. The specification is intended to ensure that the bidder understands you must be qualified to perform these services. The consequences is that the GC remains liable for completing the work and it may cost the GC more money than it had in the bid to obtain a qualified subcontractor to perform the work,

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I need to piggyback on this topic. Vern in Post #10 stated he did not think the FAR required a J&A to direct a specific brand equipment in a construction contract. My situation is vehicle armoring. We plan to compete an armoring contract but direct the Armorer to use a specific Make and model vehicle. (note: GSA already waived Auto Choice). We have a split camp over whether a Brand Name J&A is required and what we do with it once approved. I have heard for my entire career that you can direct a prime to a sole source/brand name subcontract without a J&A but I am not sure why the FAR would allow us to avoid normal CICA procedures by using an intermediary to make the purchases. Does anyone know of anything I don't?

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I believe that you are required by FAR to prepare a single justification in your described case. My situation was different. I don't believe you need a single source J&A to include in a construction specification the brand name of the system manufacturer who's existimg system is currently installed that must be expanded to meet the government's current requirement.

On the other hand, if you are introducing a new product into a construction contract by brand name, then you would need to create a J&A to justify why that brand is the only brand that will meet the government's requirements

Good luck.

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Boof:

I know this doesn't directly answer your question but since brand name justifications almost write themselves, if they are legitimate, why not just execute one and save the go-round debate?

If the vehicles aren't GFP aren't you simply purchasing up-armored vehicles? If yes, wouldn't you need a justification?

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