Ethics of Rejecting a Substitution

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Author Message George A. Everding, AIA, CSI, CCS, CCCA Senior Member Username: geverding Post Number: 282 Registered: 11-2004 Posted on Friday, March 23, 2007 - 05:08 pm:    Also posted in the "Specifications" Area. Please click the link below to join the ongoing discussion there: Same Post in Specifications Here is a hypothetical situation I’d like you all to consider: Our hypothetical specifier, let’s call him “George”, recently removed “Acme”, one of the major manufacturers of a certain product, from his specs. For many, many years, the A/E’s in “George’s” town based their designs on “Acme”; the manufacturer’s rep was very responsive and helpful during the design phase, and excellent with follow up. About 3 years ago, the old product rep was let go, and a younger (and presumably lower-salaried) rep took over, not only in “George’s” market region, but in four others, whose product reps were also fired or retired at about the same time. “George” still hasn’t met the “Acme” product rep, even after three years. The project architects and designers in “George’s” office complain that the rep doesn’t return their phone calls and emails on a timely basis, if at all. Now most people in the office base their designs on one of “Acme’s” major competitors (with, not all that coincidentally, a very responsive product representative) and “Acme” is out of the list of manufacturers in the spec. A large project, let’s assume hypothetically, is out to bid. The spec is a closed “basis of design” based on one of “Acme’s” competitors and listing four other competitors as “other approved manufacturers”; of course “Acme” was excluded from the list. Assume also that “Acme” and all the listed competitors are very comparable in quality; there are no issues with the product itself. During the bidding process, the “Acme” rep submits a request for substitution. Our hypothetical specifier “George” is inclined to reject the substitution based on his firm’s recent history with the rep’s lack of responsiveness. What do you think professional ethics demand in this situation? Can your opinion of the representative’s responsiveness be the sole reason for rejecting a substitution, or must you base your rejection only on the salient qualities of the product itself? Any similarity in this hypothetical situation and any real project or real specifier is completely coincidental, of course. Shedrick E. Glass, CSI, CCS Senior Member Username: shedd_glass Post Number: 31 Registered: 07-2004 Posted on Saturday, March 24, 2007 - 09:13 am:    According to A201 General Conditions 3.4.2 (unaltered/modified), the Architect does not have authority to "approve/reject" a substitution. Phil Kabza Senior Member Username: phil_kabza Post Number: 240 Registered: 12-2002 Posted on Saturday, March 24, 2007 - 02:01 pm:    I think that in George's case, guided by Shedrick's additional comment, the A/E and the Owner need to evaluate whether the manufacturer's participation in procurement, construction, and warranty service constitute salient characteristics. They may matter with some products, and may not matter with other products. For example, I do not specify waterproofing systems that are not actively represented regionally by technically qualified people who routinely call on specifiers. I want the rep to provide competent review of documents, identification of qualified installers, participation in preinstallation conferences, and onsite manufacturer inspection. This can't be properly carried out by someone whose territory is "the East Coast." Other products that are less mission critical may be successfully incorporated with minimal rep involvement; for those, I don't think rep responsiveness would be reason for substitution rejection. I have heard of certain hypothetical specifiers who express their displeasure when manufacturers fire their regions' reps by removing the manufacturer from their specifications and forcing the manufacturer to substitute in for each project. Just a rumor. Ronald L. Geren, RA, CSI, CCS, CCCA, SCIP Senior Member Username: specman Post Number: 428 Registered: 03-2003 Posted on Saturday, March 24, 2007 - 07:23 pm:    Shedrick: The original post is relative to the bidding process, and not the construction process, so A201 is not applicable. There really is no approval process for substitutions except what is stated in A701 Instructions to Bidders; the architect can approve and reject substitutions unless another provision is provided in the Owner-Architect agreement that defines or limits the architect's responsibility for approving substitutions during the bidding phase. Sheldon Wolfe Senior Member Username: sheldon_wolfe Post Number: 246 Registered: 01-2003 Posted on Sunday, March 25, 2007 - 12:21 am:    The bottom line is that you are working for the owner. Phil makes a good point about involvement of qualified people, but not all products require the same support as waterproofing. For example, if the local rep for (pick a name) steel doors doesn't call on you, that is not a reason to deprive the owner of the lower price that company may offer - whether the request is made during bidding or after award of contract. Shedrick E. Glass, CSI, CCS Senior Member Username: shedd_glass Post Number: 32 Registered: 07-2004 Posted on Sunday, March 25, 2007 - 08:42 am:    Ronald: You are correct 3.3 in A701 does provide a process for substitutions, however, George did say "closed "basis of design"" documents. My understanding of "basis of design" is that any equal/comparable product is acceptable (as defined within the documents), thus, approval to bid would not be required. Perhaps my assumed definition of "basis of design" is incorrect. Also, in A701, Article 1 DEFINITIONS, paragraph 1.1, the "proposed Contract Documents" are a part of the bid documents. Doesn't that make the A201 applicable? Ronald L. Geren, RA, CSI, CCS, CCCA, SCIP Senior Member Username: specman Post Number: 429 Registered: 03-2003 Posted on Sunday, March 25, 2007 - 03:58 pm:    Shedrick: Regarding the last part of your post, yes, the A201 is a part of the procurement documents. However, the conditions of the contract establish how the contract is to be administered, as well as the roles, rights and responsibilities of the parties, after the agreement is executed. If one were to apply the requirements of A201 to the procurement process, then a change order would be required to formalize the substitution--but how can you have a change order without a contract? As to the first part of your post, the use of "basis-of-design" (BOD) doesn't necessarily mean that it's open for substitutions. It depends upon how you phrase the language. For example, if you state that XYZ product is the BOD and that comparable products from the following manufactuers are acceptable, then the bidders are limited to the BOD product or comparable products from those manufacturers listed. However, if you state that XYZ product is the BOD and those comparable products that may be incorporated into the Work include, but are not limited to, those from the following manufacturers (or some similar language), then the specification is open to any product that meets the specified salient characteristics of the product. My bet is that George's BOD statement is closest to the former, indicating that only the BOD product and those of the manufacturers listed are the only ones permitted. Getting back to the scenario, if you look at section 7.8.3.3 of the PRM, you'll find that the product representative is listed as a consideration in evaluation of substitution requests. You can have a perfectly acceptable product, but get little to no support from the rep, which could impact the project negatively; especially if the product is a critical element of the construction. I can't provide a definitive decision on George's scenario, because I don't have all the information; but what I can say is that if the product rep is essential to the proper application or installation of the product in the field, then there would be grounds for denying the approval of the substitution based on past performance of the product rep. Shedrick E. Glass, CSI, CCS Senior Member Username: shedd_glass Post Number: 33 Registered: 07-2004 Posted on Monday, March 26, 2007 - 08:14 am:    OK, my assumed definition of "basis of design" was incorrect as used here. I just gotta ask, substitutions during bidding are ALWAYS ALLOWED even when bidding with closed Proposed Contract Documents? Sheldon Wolfe Senior Member Username: sheldon_wolfe Post Number: 248 Registered: 01-2003 Posted on Monday, March 26, 2007 - 08:54 am:    It depends on the owner's policies, but even when you are required to accept prior approval requests, you need not approve them unless they comply with specifications. If an owner is crazy enough to say that all prior approval requests or requests for substitution must be approved, there isn't much point in writing the specifications. (Unregistered Guest) Unregistered guest Posted on Monday, March 26, 2007 - 08:51 am:    Is it not that "substitutions are allowed to be submitted" during bidding, but that the bids need to be based on the BOD documents [as an equal base line or level playing field for assessing the bids] and any substituions need to be be accompanied by suitable cost adjustments? Seems to me that a bid based on an unapproved substitution is "irregular" and improper. Further, I think lack of service by the manufacturer's rep is a valid basis to present to your client for rejection ["not in the best interest of the project"]AND I think is valid input directly to the manufacturer. Why should we, our client and the project be saddled with a situation where service is meager or not available. IF the mnaufacturer wants to sell their products, then would think they should be fully prepared-- and willing-- to service them as necessary. There is absolutely no rationale to impose even the possibility of added costs on those who are not responsible for the problems, lack of service, etc. John Bunzick, CCS, CCCA Senior Member Username: bunzick Post Number: 688 Registered: 03-2002 Posted on Monday, March 26, 2007 - 08:59 am:    At a minimum, the rep should be called to the carpet, explaining why the architect does not appreciate that behavior. And, it should go to individuals higher in the company--like the national sales manager--if that is achievable without extraordinary effort. David R. Combs, CSI, CCS, CCCA Senior Member Username: davidcombs Post Number: 214 Registered: 08-2004 Posted on Monday, March 26, 2007 - 09:13 am:    I personally believe that "customer service" is a very valid and salient characteristic to consider when evaluating products. There are many reasons for lack of responsivenes: Rep is overworked, has to much territory to cover, company may have underestimated the value to the design community, corporate arrogance ("we can cut back, they'll spec us anyway"), or the rep may just not be a very good one. Regardless, it speaks volumes of how the company in general views the value of customer service. With so many other options and manufacturers, what incentive is there to tolerate the history of less than good service? Frankly, I see no obligation whatsoever to entertain the substitution request in "George's" scenario. Ralph Liebing, RA, CSI Senior Member Username: rliebing Post Number: 568 Registered: 02-2003 Posted on Monday, March 26, 2007 - 09:27 am:    Forgive me; I was the "unregistered" above [lost all web connections over the week end] Sorry. George A. Everding, AIA, CSI, CCS, CCCA Senior Member Username: geverding Post Number: 283 Registered: 11-2004 Posted on Monday, March 26, 2007 - 10:59 am:    "Closed Basis of Design", as defined in our hypothetical specifier's Division 01, allows either the BOD or any of the four approved manufacturers to be bid, and would therefore not require a bid period substitution for any of the five named manufacturers. ACME, or any other non-listed manufacturer, would be required to go through the substitution process and be approved before they could be included in a bid. I think the Owner's review of substitutions is essential after the contract is signed; at that time, the substitution will lead to a change in the contract. During bid, however, I don't think the Owner needs to review. It is up to the A/E to determine if the proposed substitution is in fact comparable to the BOD, just like presumably he or she did with the four approved manufacturers. The A201 is included in the procurement documents for the same reason the proposed agreement between Owner and Contractor is: it gives the bidders an understanding of the "rules of the game" that will be in effect once the contract takes effect. The A201, during bidding, is a procurement docutment, just like the drawings and specs. Knowing what general conditions will be used in the project influences the amount of the bid. Ralph Liebing, RA, CSI Senior Member Username: rliebing Post Number: 569 Registered: 02-2003 Posted on Monday, March 26, 2007 - 11:10 am:    OK, but Acme was not listed. OK, but substitutions during bidding are permitred, but need to be processed in accordance with A701 [IF hopefully,that was part of the documentation]. This calls for architect analysis, approval/disapproval, and inclusion in an Addendum. Still nothing that mandates approval of Acme, and would think analysis includes every aspect of the product-- including service Wayne Yancey Senior Member Username: wyancey Post Number: 329 Registered: 05-2005 Posted on Monday, March 26, 2007 - 05:11 pm:    To control subsitution requests during bidding phase, read articles by Maynard Blumer about his Prior Approval Process. I adopted Maynard's system 15 years ago and it is a good, nay a great system. Contact me off line at wyancey@weberthompson.com for further information. George A. Everding, AIA, CSI, CCS, CCCA Senior Member Username: geverding Post Number: 286 Registered: 11-2004 Posted on Monday, March 26, 2007 - 05:36 pm:    Wayne sent me the Blumer articles a few months ago. I agree...it's a great resource. The articles are 20 or 25 years old, but still very relevant.