The requirement that specifications not be “unduly restrictive” is an important pro-competition provision of South Carolina’s procurement law.  SC Code Ann §11-35-2730 (1973) (http://www.scstatehouse.gov/code/t11c035.htm).  Unduly restrictive specifications have been held “inadequate” or “not independently arrived at in open competition” under SC Code of Laws Regulation 19-445.2085(C) (http://www.scstatehouse.gov/coderegs/c019.htm).  In re: Protest of B&D Marine and Industrial Boilers Inc, SC Procurement Review Panel 2000-12 (http://www.procurementlaw.sc.gov/MMO/legal/decisions/00-12.pdf).  This can lead to cancellation of an award or contract and the issuance of a new award or bid solicitation. 

A specification that calls for products from only one manufacturer isn’t automatically unduly restrictive.  In re: Protest of CambexCorp., SC Procurement Review Panel 1992-7 (http://www.procurementlaw.sc.gov/MMO/legal/decisions/92-7.pdf).  SC Code of Laws Regulation 19-445.2140 (http://www.scstatehouse.gov/coderegs/c019.htm) permits a bid specification to use a brand name, so long as it can serve as a basis for meeting the State’s need in a cost-effective, nonrestrictive manner.  Cambex, a computer memory manufacturer, protested an Invitation for Bids (IFB) for an upgrade from one IBM model to another IBM model.  The IFB specified that “no other make or model will be considered” and “all parts … must be manufactured by IBM.”  South Carolina’s Division of Information Resource Management (DIRM) declined to consider Cambex’s product an acceptable alternative, citing several concerns, including the complexity of maintenance and repair in a multi-vendor environment.  The Procurement Review Panel applied the familiar administrative law standard of review, deferring to the agency’s position unless the specification is “unreasonable, arbitrary, capricious, or contrary to the Procurement Code.”  The Panel upheld the DIRM’s decision to limit its IFB to a single manufacturer because Cambex failed to show that the concerns stated as a basis for doing so were “unrealistic or unreasonable.”  Additionally, the Panel noted that the use of a brand-name specification without providing for alternatives did not make the IFB a single-source procurement because the secondary used market for IBM products allowed several vendors to bid on the job. 

On the other hand, merely reciting the phrase “or approved equal” isn’t a magic bullet against undue restrictiveness.  In re: Protest of B&D Marine and Industrial Boilers Inc, SC Procurement Review Panel 2000-12 (http://www.procurementlaw.sc.gov/MMO/legal/decisions/00-12.pdf).  B&D protested an Invitation for Bids (IFB) from USC that called for a boiler to be “Cleaver-Brooks Model CBLE200-800-150ST or approved equal by Kewanee or Burnham.”  The specification drafter admitted that when he wrote the IFB, he did not know if there was an approved equal made by the named manufacturers.  It was later learned that the named manufacturers did not offer an approved equal.  Although USC allowed prospective bidders to submit technical data for approval of additional products, none of the alternates were approved.  Therefore, no approved equals were considered, and as a result, the Panel deemed the IFB an unduly restrictive single-source procurement.   The Panel then held that the finding of undue restrictiveness indicated that the IFB did not meet the State’s requirements for the goods because of the failure to assure competition under SC Code of Law Regulation 19-445.2085(C).  Thus, the Panel upheld the cancellation of the award and re-solicitation of bids.