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Don’t Get Caught In The “Or Equal” Public Contract Trap

By William C. Last, Jr.

Project specifications commonly require that a specific product be supplied to the project. Such “proprietary” specifications usually require the contractor to only use a product manufactured by one company or describes a performance requirement that can only be satisfied by one manufacturer. In addition to the listed product, such specifications will occasionally allow an “or equal” product to be used.

“Proprietary specifications” are typically used because the designer does not want a substituted to be used since it can incur liability if the substituted product fails or does not work as well as the intended product. Design professionals also specify products because they are familiar with and have previously used. If you have submitted a bid on a California public works project using a product that was not specified as being acceptable in the project specifications you will be required to comply with the specification “or equal.” It is not uncommon for a contractor to submit a bid that is based on using an alternative product that is not listed in the specifications.

If the alternative product is not accepted, the bidding contractor may be subjected to paying for the increased cost of the specified product. On occasion, the specification may list a product that requires certified installers to apply, and if an uncertified subcontractor lists an alternative product that is not accepted, that subcontractor will be forced to retain a certified applicator. Clearly, failing to comply with the specification “or equal” provisions can result in increased project costs and overruns.

The language in an “or equal” clause varies from one set of specifications to another. However, California legislature has codified what must be included in such clauses. In enacting the code section that concerns “or equal” clauses the Legislature wanted to ensure that projects were competitively bid. This article will address the requirements and the variations found in such substitution clauses.

Typical “Or Equal” Requirements

A typical substitution clause will include the following: (1) a requirement that any proposed substitution be submitted within a fixed period of time (as few as 7 days); (2) notification by the contractor as how the substituted product will impact the completion; (3) notification by the contractor as to the difference in cost between the substituted product and the listed product; (4) a requirement that the contractor provide a detailed analysis of the difference between the listed product and the proposed product; (5) a requirement that the contractor provide (a) product identification, manufacturer literature, samples, names and addresses of similar projects where the substituted product has been used; (b) and the name and address of the manufacturer’s representative; and (7) that the contractor pay the cost of the design team to review the proposed substitution.

California Public Contract Code Section 3400 Requirements

The California Public Contract Code, at section 3400, addresses the right to include an “or equal” clause and substitutions. That code provision starts by stating: “No agency of the state nor any political subdivision, municipal corporation, or district, nor any public officer or person charged with the letting of contracts for the construction, alteration, or repair of public works shall draft or cause to be drafted specifications for bids, in connection with the construction, alteration, or repair of public works, (1) in a manner that limits the bidding, directly or indirectly, to any one specific concern, or (2) calling for a designated material, product, thing, or service by specific brand or trade name unless the specification is followed by the words “or equal” so that bidders may furnish any equal material, product, thing, or service.” This provision is in keeping with the general public policy, which is also codified, that construction projects are to subject to competitive public bidding whereby the contract is to be let to the lowest responsive and responsible bidder. It should be noted that the Legislature has created certain exception to that policy. The statute also requires the public entity, if aware of an equal product manufactured in this state, to name that product in the specification.

Time to Seek Substitution

Public Contract Code section 3400 sets forth a timely limit for seeking a substitution of a product. The section states: “Specifications shall provide a period of time prior to or after, or prior to and after, the award of the contract for submission of data substantiating a request for a substitution of “an equal” item. If no time period is specified, data may be submitted any time within 35 days after the award of the contract.” It is not uncommon for the specifications to provide as few as seven days to submit the request for substitution. Thus, if you want to seek a substitution you should do so in timely manner.


Finally, Public Contract Code section 3400 states that the restriction on specifying a single product “is not applicable if the awarding authority, or its designee, makes a finding that is described in the invitation for bids or request for proposals that a particular material, product, thing, or service is designated by specific brand or trade name for either of the following purposes: (1) In order that a field test or experiment may be made to determine the product’s suitability for future use, (2) In order to match other products in use on a particular public improvement either completed or in the course of completion, (3) In order to obtain an necessary item that is only available from one source, and (4) In order to respond to an emergency declared by a local agency, but only if the declaration is approved and by a four-fifths vote of the governing board of the local agency issuing the invitation for bid or requests for proposals.”

For example, a product can be specified for a remodeling project when the owner wants the existing HVAC control system to be compatible with the new system. As a result, the designer will specify a single control system.

Other Issues

While there are no reported cases concerning wrongfully denied substitution requests, it is the author’s belief that if the substitution is denied in bad faith, the public entity could be liable for the additional cost associated with being forced to use the listed product. Generally, public entities have a certain degree of discretion in exercising their procurement policies. However, Public Contract Code section 3400 does place limitations on that discretion.

As stated, some substitution clauses require: (1) notification by the contractor as how the substituted product will impact the completion and the difference in cost between the substituted product and the listed product; (2) require any savings resulting from the substituted product to inure to the benefit of the owner; and (3) require that the contractor pay the cost of the design team to review the proposed substitution. Most contractors will dispute the contention that the savings associated with a substituted product go to the owner for the simple fact that the savings are reflected in the lower bid price.

Under state and federal antitrust laws, if a designer and supplier collude to draft specifications that are intended to restrain competition or fix prices they may be subject to liability. That liability can include treble damages.

If a design professional specifies a single product and that product is not available in a timely manner although the contractor timely ordered it, the contractor should be entitled to an extension of time to complete the project and maybe entitled to delay damages. By specifying a single product, the design professional impliedly warrants that the specified product is commercially available. Similarly, if the product fails and the failure is not due to contractor’s error, the design professional maybe liable for any damages result from that failure.


If you are bidding on a California public works project review the specification product requirements to ensure that the product you intend to use complies with the specification. Once you are awarded the contract, comply with the substitution general condition or specification requirements. In essence, submit a timely and complete substitution request.

This article, copyright 2015, was written by William C. Last, Jr. Mr. Last is an attorney who has been specializing in Construction Law for over eighteen years. Mr. Last also holds a California A&B contractors license. If you have any questions Mr. Last can be contacted at  or or by e-mail at [email protected] He has other articles on his web site: This bulletin is published periodically to provide general information about current legal issues. If you have a specific legal question or need legal advice, you should contact an attorney