Litigation stemming from disputes over “brand name or equal” products is all too commonplace. As a result, the law is relatively well settled that an alternative product need not be identical to or comply with every detail of the specified brand-name product. Rather, the contractor need only provide a product that has the salient characteristics of the brand-name product and is suitable to the owner’s actual needs.
Stated differently, the contractor’s burden of proof in these cases is to demonstrate that its proffered “or equal” product functions just as well in all essential respects as the specified product.
Cummins v. Bradford Sanitary Authority discusses a twist on the brand name or equal issue — namely: Who is responsible for changes to the project that result from the contractor selecting a product different than the brand name specified? While the contractor prevailed at the trial court, the jury verdict was ultimately overturned by a Pennsylvania appellate court.
Bradford Sanitary Authority is the owner and operator of a wastewater treatment plant that services the area around the city of Bradford, Pennsylvania. The Authority retained Gannett Fleming Inc. to provide design, engineering, and construction management services for the upgrade of the plant. Part of the project required the construction of concrete tanks containing sequencing batch reactors to treat sewage and other wastewater at the plant. An SBR is a type of bioreactor used to remove sludge from sewage in order to produce clean water for discharge (or in some cases, additional treatment).
GF’s design was based on a continuous-flow SBR manufactured by ABJ Sanitaire, with four separate SBRs installed in four adjacent, contiguous tanks. The design called for wastewater to enter the SBR through two influent boxes, each of which serviced a pair of tanks. Each tank had its own manual gate in the influent box, and the system was designed so that the influent would continuously flow over these gates. Importantly, influent entered the boxes through 20 in. ductile iron influent pipes capable of supplying 13.88 mgd of wastewater.
The contractor’s burden of proof in these cases is to demonstrate that its proffered “or equal” product functions just as well in all essential respects as the specified product.
The specifications authorized bidders to select from any of three acceptable manufacturers: ABJ, Ashbrook Simon Hartley, or Aqua Aerobics. The specifications also stated that whenever multiple products or manufacturers were listed in the specifications, the first-named product constituted GF’s design. The specifications also stated:
If products of manufacturers other than those named first differ from those named first in the Project Manual or on the [Contract] Drawings to the extent that their proper incorporation into the [work …] requires changes to the structural, piping, mechanical, electrical, instrumentation, or any other changes of whatsoever nature, the [c]ontractor shall be responsible for such changes.
There were numerous other provisions in the specifications stating that if a product other than the one first named was used by the contractor, the contractor would be responsible for all costs associated with design changes to any part of the project to make use of the equipment.
Bob Cummins Construction Co. was one of the bidders. Because it received a better deal on the SBR system from Ashbrook than from ABJ, Cummins proposed installing an Ashbrook SBR. Unlike the ABJ system, Ashbrook’s system was not a continuous-flow system. Instead, it was a sequencing system, where only one of the four SBR tanks fills at a time. Cummins proposed to install automatic gates to control influent flow into a tank rather than manual gates or a separate pipe with a valve into each tank. Cummins was ultimately the winning bidder.
Cummins submitted the Ashbrook product data and shop drawings reflecting changes Ashbrook proposed to GF’s design to incorporate the Ashbrook SBR. GF determined — based on assurances from Cummins and Ashbrook during the bid and submittal processes — that the proposed Ashbrook SBR would meet the SBR specifications and, in particular, that it could handle up to 13.88 mgd of influent. After several meetings and some changes, GF marked Cummins’ final SBR shop drawings “reviewed,” and Cummins installed the Ashbrook SBR at the plant.
After the SBR was put into operation, the parties discovered an influent overflow problem. Cummins claimed it was due to the 20 in. influent piping being too small to accommodate the Ashbrook system’s sequencing. The Authority claimed that the overflow resulted from the automatic gates not controlling the flow properly and that a different piping configuration was necessary to accommodate the Ashbrook SBR. The corrective work was performed, and Cummins sued the Authority, alleging more than $600,000 in damages. The Authority countersued.
In the litigation that followed, the Authority argued that the trial court should dismiss Cummins’ claim because the contract placed sole responsibility on Cummins for the defective system. The court refused to dismiss the case, and a jury awarded Cummins $488,243. The jury also found that the Authority acted in bad faith in withholding the contract retention.
The Pennsylvania appeals court reversed the jury verdict for almost $500,000 and directed the trial court to either schedule a new trial on any remaining issues or grant judgment to the Authority. Its decision was based on the contract, which made Cummins responsible for reviewing all plans and specifications before bidding on the project and accepting responsibility for changes caused by its use of a product different from what was the basis of the design.
The court stated that a product being listed as acceptable in the specifications (i.e., Ashbrook’s SBR) did not make that product interchangeable with the brand around which the project was designed (ABJ’s SBR). The contract was clear and unambiguous in shifting to the contractor the responsibility and risk for “changes of whatsoever nature” required because Cummins decided to use Ashbrook ‘s system rather than ABJ’s.
The court was not swayed by GF’s review of Cummins’ submittals and shop drawings. The contract, which appeared to be based on the Engineers Joint Contract Documents Committee construction contract, clearly disclaimed any liability on the Authority’s part for the submittal process.
The court also rejected Cummins’ argument that by naming Ashbrook as an additional manufacturer, the Authority made a guarantee that the Ashbrook SBR would fit and function without design changes. The court stated that this might be the case if Cummins’ claim was based on a design specification for which the Authority explicitly stated how the contract was to be performed and permitted no deviations. Citing prior Pennsylvania precedent, the court found the specification here to be a performance specification:
The mere identification of a product or manufacturer does not create a design specification. Where a government agency identifies a particular product or manufacturer by name, but permits substitution of ‘an approved equal,’ such a specification is ‘performance’ in nature and, as a result, carries no implied warranty.
As a result, the risk of meeting the performance goal was shifted to Cummins, and it could not successfully argue that the Authority was liable for the cost consequences of the repair work.
There are many nuances associated with the use of brand name or equal specifications. Most state procurement laws put very tight restrictions on the ability of a public agency to specify a product that can only be obtained from a sole source, as this can result in unfair competition and inflated prices. While the Authority did not “sole-source” ABJ’s SBR system, the authors wonder whether it shifted the playing field by making the contractor responsible for design issues associated with using an alternative product. It certainly creates a strong incentive for a contractor to use the brand-name product.
Another point about this case that is hard to follow: If GF’s design was only suitable for the ABJ system, one might have thought that this would have been determined by GF during the bidding or submittal process. Stated differently, if the Authority said to Cummins during these processes, “You can use the Ashbrook SBR, but here are the changes that GF says will need to be made to make it work,” we could better grasp how the contract clause relied on by the Authority and court makes sense. But it seems as if the appellate court ignored the notion that GF was the engineer of record and that this was a project delivered through design-bid-build.
Finally, we note that the American Council of Engineering Companies of Pennsylvania submitted a legal brief in support of the Authority in this appeal. This is not surprising, as it is understandable that ACEC would have a strong vested interest in seeing that the contract language on product substitutions be enforced.
This article first appeared in the July/August 2021 issue of Civil Engineering.