Though not the first sustain of 2024 (click here for our writeup of 2024’s first sustain), GAO’s decision in American Material Handling, Inc. provides an informative discussion of the level of scrutiny agencies face when conducting “brand name or equal” procurements. In American Material, the International Boundary and Water Commission sought a contractor to provide a brand name or equal “Caterpillar 980 wheel loader.” The requirement was competed among Federal Supply Schedule holders under FAR subpart 8.4. The request for quotations (RFQ) included a two-page specification sheet identifying the salient characteristics of the wheel loader equipment and stated that award would be made on a lowest price, techncally acceptable basis. Two vendors responded to the RFQ – Caterpillar offered its own brand name equipment and American Material offered a Volvo L220H wheel loader. After receiving quotations, the agency added several additional salient characteristics to the technical evaluation form, then concluded that American Material’s equipment did not meet these new characteristics. Thus, although American Material offered the lower price, the agency awarded to Caterpillar because American Material’s equipment was evaluated as technically unacceptable for failing to meet the newly added requirements.
After an unsuccessful agency level protest, American Material protested to GAO. GAO sustained the protest, noting the well-established rule that, once vendors are informed of the criteria against which proposals will be evaluated, the agency must adhere to these criteria. In a brand name or equal acquisitions, a product offered as “equal” does not need to be identical to the brand name product. Rather, the “equal” product must match every salient characteristic the agency identifies in the solicitation. GAO stressed that an agency’s decision to evaluate quotations based on unstated salient characteristics is “fundamentally unreasonable” because the failure of a solicitation to list the salient characteristics of the desired item improperly restricts competition by precluding vendors of equal products from determining what characteristics are considered essential for their items to be accepted.
In sustaining American Material’s protest, GAO reinforced the long-standing principle that, although agencies have broad discretion to determine their needs, once they have set the ground rules for a procurement, they must adhere to those ground rules. Companies considering offering “equal” products should ensure that their product complies with the salient characteristics identified in the solicitation and, if the government later imposes additional unstated criteria, consider protesting to protect their rights.
We would like to thank Cherie J. Owen, Consultant, for her contribution to this blog post.