Competitive Bidding - Or Equal - Reference Guide #C.1 and Bidding Cost Control
All public works contracts (labor and material) involving an expenditure of over $35,000, and purchase contracts (materials only) of over $10,000 must be advertised for competitive bidding and a contract (if any) awarded to the lowest responsible bidder; all in conformance with Section 103 of the General Municipal Law amended by Chapter 494 of the Laws of 2009. (Under certain circumstances, such bidding may be set aside due to emergency conditions, however, an emergency must be managed as outlined in Reference Guide #A.9 - Summer 1989. The school attorney should be consulted in this regard.)
Over the years, Section 103 has been held to mean that any restriction of free competition at the time of bidding is improper; hence, the limitations that a public school district cannot assign one contract to another contract, cannot prequalify prospective bidders (i.e., determine who can and who cannot bid), and cannot require that the base bid be on only those materials shown in the plans and specifications.
This latter consideration has given rise to much discussion and confusion over the related, but different, terms of "substitution", and "equivalent" - the notorious "or equal".
Commissioner's Regulations, Section 155.2 states that "specifications for construction shall allow for equivalencies and shall not require the base bid to be based only on the materials or products specified." Further, the Commissioner has ruled (eight State Education Department Reports, 152) that "equivalents may be freely bid." This means that a contractor may include in his base bid, any item that he, the contractor, feels is equivalent. It also means that the practice of requiring a "substitution sheet" which lists additions or subtractions from the bid price were a particular item accepted, is improper. Of course, the contractors bears the risk of whether the equivalents which were bid, will be accepted.
The important thing to understand is that "equivalents" relate to the bidding process, while "substitutions" come into play after contracts are signed. This is in keeping with the Department's requirement that a clause allowing for equivalents and defining the process must be included in the Instruction to Bidders part of the specification. Remember, when talking about "equivalents", any reference to "substitutions" must be expunged from the thought process.
Admittedly, to make a valid recommendation concerning award of contract, the architect/engineer must know what materials are included in a contractor's base bid. Therefore, it is common practice to request from the contractor a list of the equivalents he has bid. Such a listing could be required at the time of bidding, however, because of the rigors and uncertainties when compiling a bid, mostcontractors would prefer to furnish such a list two or three days after bids are opened. In any case, equivalents should have been considered and if acceptable, approved before any contract is signed. To do otherwise is to invite a contentious relationship between the contractor and the school district were an equivalent to be rejected after the contract is signed.
A write up on "equivalents" is included in Attachment C.2 of the Instruction Guide for Obtaining a Building Permit and Approval of Plans and Specifications by the Commissioner of Education. This guide is sent to a school district in connection with every project which is given a project control number. Specifications which do not include a proper equivalency clause will not be accepted for final review. If there are further questions, contact your Project Manager.