FAQ.06

Question:

We are a supplier/installer and want to bid on the supply of a product. The specification has linked this product to a particular installer. What is the process of requesting a substitution of not a product but an installer? Is it allowable to specify the installer? How can a subcontractor/supplier (non-manufacturer) be specified into the tender?

Answer:

There is no formal process for changing a specified supplier/installer/manufacturer where one has been pre-selected.

It is rare to find a sole source specified in a tender for a public body or institution as it is often prohibited or restricted, but private owners may do so at their discretion. By the time a project is out for tender, it is likely too late to have pre-selected suppliers/installers/manufacturers changed. This is best done before a project is tendered by approaching the owner or the consultants.

Expanded Answer:

It is not uncommon in the private sector for owners to pre-qualify or to name specific subcontractors, suppliers or installers that must be carried by every contractor bidding a job. The result may be that the owner does not receive the lowest price that they might otherwise have. Some private companies may be free to do this. The rules for most public sector projects would require a more open/competitive bid process.

There are a number of reasons why a particular manufacturer/subcontractor/installer might be specified on a project:

1. A client may have negotiated a price for a product based on a particular quantity per year aggregated over multiple projects. I have known this to be done for carpet tile and ceramic tile.
2. A client may have negotiated a national service agreement so they only have to deal with one supplier/installer regardless of where the project is.
3. By selecting a manufacturer, you may in some cases be limiting the selection of supplier/installer to factory trained or authorized subcontractors or installers. Some products may be licensed to a particular supplier/installer.
4. Some very small projects may receive better pricing or material availability if the supplier/installer is guaranteed to get other projects as well.
5. Some projects may require companies providing services to be pre-screened for security purposes and only previously screened companies may be allowed to bid.
6. Major landlords may require the use of specific subcontractors/installers so that all of the work/products of a similar nature are done by the same company throughout a building. This makes pointing a finger at someone if there is a defect or failure much easier and it reduces the effort required of the Landlord to train the trades in, and monitor their compliance with building standards.
7. Portions of a building may still be under warrantee, and to avoid voiding the warrantee, it may be necessary to have any additional work affecting the product under warrantee done by the original company.
8. Some companies may decide that preference should be given to suppliers/installers that are related corporately.
9. Timber frame buildings are often designed by a supplier/installer as part of the project design phase. It is typically more expedient for the same supplier/installer to be awarded this subcontract.

The requirement for a bidder to carry one of a list of preferred subcontractors/installers or use a sole prescribed subcontractor/installer should be set out explicitly in the instructions to bidders and in the specifications.

While it is possible to create a set of requirements that effectively limit the qualified suppliers/installers to a single company, there should be no reason for not being explicit about sole sourcing a service.

Any other subcontractors/installers wanting to get on the list or to be prescribed should ask the bidders to see if they can get approval from the bid calling authority to be added for the project being bid, or should approach the owner/landlord and the appropriate consultant about being added for future projects.

It should be realized that obtaining approval is extra work for the bidder and there may be little incentive for them to put in the effort required unless there is a competitive advantage for them or they have a really good working relationship with the person/company making the request.