A project owner’s use of a proprietary specification poses risk for contractors and their suppliers. The specification is written around a particular product. It may name the product. But, it will allow the use of approved “equal” products. The problem is, only after contract award does the contractor learn whether the owner’s designer will approve a proposed alternative product.

In a recent case, a contractor incorporated the price quotation of a key subcontractor into its successful low bid. The contractor and subcontractor both assumed they could gain approval of an “equal” product the sub intended to install. The owner’s engineer refused to approve the alternative and directed the contractor to have the sub install the more expensive product specified. Increased costs, default of the subcontractor and protracted litigation resulted.

Another case this week involves a disappointed bidder’s recovery of attorney fees and bid preparation costs. The Ohio Supreme Court ruled that recovery is allowed when the public project owner violates the competitive bidding statutes and the bidder makes a timely – although unsuccessful – effort to enjoin the contract award or performance. The third case this week addressed a federal claim that included “approximate” mark-ups on subcontractor costs.