In 2017, Congress said that DOD had to justify in writing the use brand name or equivalent specifications and after many delays rules are coming out to implement that mandate.
In the National Defense Authorization Act (NDAA) for Fiscal Year 2017, Congress mandated that the Department of Defense provide written justifications for solicitations with brand name or equivalent specifications.
This is a major shift from pre-existing regulations, which required a written justification for brand name specifications only. Brand names or equal descriptions were considered to be open to competition, but this left open the possibility that acquisition officials would not consider equivalent solicitations in a fair manner.
After years of delay, DOD is issuing the rule to carry out the NDAA mandate. This rule will encourage government customers to consider a variety of vendors and competitive solutions.
Unfortunately, procurement officials have been unwittingly depriving their agencies of innovative solutions through the use of brand name or equal solicitations. While brand name or equal solicitations appear open to alternative vendors, they may send the signal that the named brand is preferred and has an advantage, discouraging alternative and innovative companies from putting in the time and effort to compete for an ‘or equal’ solicitation.
While acquisition regulations require that brand name or equal specifications identify “the salient physical, functional or performance characteristics that ‘equal’ products must meet,” few brand name or equal solicitations include these characteristics. Instead, they list a specific brand of product and perhaps the product’s stock keeping unit (SKU).
Competitor vendors must decide which of their products could be equivalent to those. Contracting officers then can identify the potential difference between the brand name and the competitor and highlight that as the difference that disqualifies the competitor. That is not how the rule is written nor how it should work.
Thanks to Congress, DOD’s new rule raises the bar for the issuance of brand name or equal specifications. Before issuing a brand name or equal solicitation, contracting officers must execute a written justification and approval.
With brand name or equal procurements subject to stricter requirements, vendors will have greater confidence that the specification is legitimate. They also hopefully will have access to a greater number of fully open procurements.
However, this new rule won’t just benefit the vendors, it will also benefit the DoD itself. When looking at specific brands, whether for brand name only or brand name or equal, they will give more consideration to what characteristics of those brands are critical to their mission. Acquisition officials and end users will find it easier to conduct open procurements than to prefer specific brands. By moving toward more brand-neutral requirements, DOD will have access to a wider variety of innovative and cost-effective solutions.
By requiring brand name or equal solicitations to be justified in writing and approved, the new rule should make it clear that fully open solicitations are preferred and provide contracting officials with the most flexibility.
The problem of non-competitive procurements will not be fixed, though, until civilian departments also are subject to this requirement and there is a government-wide cultural shift toward competitive procurements.
We would welcome congressional and FAR Council support in that effort.