- Buying Generic for Louisiana Public Works Act Projects
- March 17, 2015 | Author: Jessica C. Engler
- Law Firm: Kean Miller LLP - Baton Rouge Office
- In public bid projects, it is not uncommon to see project specifications that specify particular brands “or their equivalent.” Louisiana law prohibits the use of name-brand specifications, known as “closed specifications,” so the propriety of these specifications is debatable. La. R.S. 38:2212(T). To comply with the statute, these brand particulars are generally interpreted to be illustrative rather than mandatory. Despite this prohibition, some owners have tried to restrict the product brands used in their projects through indirect means.
The Louisiana Second Circuit Court of Appeals addressed an attempt to limit product brands in Akers v. Bernhard Mechanical Contractors, 48,871 (La. App. 2 Cir. 4/16/14), 137 So. 3d 818. In Akers, the City of Shreveport advertised and received public bids for the renovation and remodeling of a fire maintenance facility. The City awarded the general contract to A&R General Contractors (“A&R”), and Bernhard Mechanical Contractors (“Bernhard”) won the mechanical subcontractor for the project. Bernhard then solicited a proposal for a ventilation system, including the vehicle exhaust system, from David Akers.
The City’s project specifications for the vehicle exhaust system stated that all products must be “equal to” those made by Nederman. Akers submitted and Bernhard accepted a bid for a system made by Ventaire. In Akers’ submittal to the City, Akers identified his intent to use Ventaire and his belief that Ventaire was equal to Nederman. Bernhard’s agreed and forwarded the submittal to A&R, who forwarded it without comment to the City’s Architect and Engineer for approval.
Initially, the City’s Architect approved the submittal with only two non-related corrections. Deeming this an approval of the Ventaire system, Bernhard told Akers to order the system. One month later, the City’s Chief of Fire Maintenance noticed that the Ventaire system was being used and told the City Engineer. The City Engineer then told Akers that he had not yet received the submittal, so the submittal was not approved.
The City’s Chief of Fire Maintenance considered the Nederman system to be superior to the Ventaire system. Akers and Bernhard’s manager maintained that the two systems were functionally equivalent and that documents showed that the City Architect had originally approved the Ventaire system. The City Engineer then determined that Ventaire lacked “prior approval,” and this was why he did not approve the submittal. The City Architect then officially rejected Akers submittal for “no prior approval.” Despite Akers having already ordered the Ventaire system, the City chose to install a Nederman system, some of Akers’ equipment, and paid Akers a fraction of his bid.
The Trial Court found that Akers’ proposal was accepted by the City and that the Ventaire system was “substantially the same” as the Nederman system. On appeal, the City argued that “Addendum Number (2)” of the contract required prior approval for Akers’ bid and reads, in pertinent part:
Any changes, which may affect construction or proper installation of materials, equipment or fixtures, not specifically mentioned in this addendum, shall be brought to the attention of the Architect in writing before submission of the bid.
The City argued that this clause required Akers to seek prior approval for his bid, which listed a Ventaire system instead of the Nederman, and since Akers did not request prior approval, the City had the right to reject the equipment even if it was equal to Nederman.
The Second Circuit rejected this argument. The fire maintenance facility is a public work subject to the restrictions of public bid law, including the prohibitions on closed specifications. La. R.S. 38:2211 et seq. The purpose of this law is to secure free and unrestricted competition among bidders, to eliminate fraud and favoritism, and to avoid undue or excessive costs. Louisiana Assoc. Gen’l Contractors, Inc. v. Calcasieu Parish School Bd., 586 So. 2d 1354 (La. 1991). The Court stated that the owner cannot reject a bid from a different supplier if the equipment was functionally equivalent to the name-brand product. In reviewing the two products, the Second Circuit agreed with the District Court’s finding that the differences between the Nederman and Ventaire systems were merely superficial. The Court also found it telling that the City’s Architect and Engineer were ready to proceed with the Ventaire system had the Fire Chief not raised the objection. Accordingly, the Second Circuit affirmed the District Court’s finding that the two systems were functionally equivalent, and thus the City had no basis to request prior approval. With the Akers decision, the Louisiana Second Circuit has removed another avenue that a project owner may attempt to improperly limit the products used for publicly funded projects.