On some jobs, engineers or consultants will put “or equal” after the type of product required. You may think your product is equal – but the consultant or engineer may not. Substituting products “as equal” is a big risk during the submittal phase if you don’t know whether the product will be approved.
Many states and municipalities adhere to different versions of the NFPA Life Safety Code or National Electrical Code, so it’s equally as important to be familiar with the codes that will be enforced on the job, along with any UL requirements. If a product requirement lists certain Underwriters Laboratory standards, make sure the products in your proposal meet them to avoid the risk of an unapproved product. If your “or equal” product isn’t approved, what will your company do? Should you forfeit your bid bond and walk away from the project, or pay the extra money to get the equipment required from the spec (assuming you’re an authorized dealer and can get your hands on the products)?
To avoid this problem, submit an RFI and get an answer ahead of time to determine whether your product will be approved. Otherwise, only submit a price on a project when you know the substitutions are pre-approved in advance.
Why It’s Important
We’ve seen dozens and dozens of members lose out because they choose to provide a different product compared to what they had originally planned to provide – for the exact same dollar amount.
If, for whatever reason, your product isn’t approved, you may have the option to bow out (forfeiting your bid bond in some cases) — whether it’s because you don’t have the ability to provide warranty, aren’t an authorized distributor, or don’t have the product training. If the engineer or consultant holds to that spec and doesn’t accept substitutions, then you’re better off finding a job you do have the right products for.
At NSCA, we often receive questions from members about regulatory and legislative issues. We often hear the same question or comment from several companies, so we know these challenges are faced by almost every integrator across the country.
Not understanding these business basics can cost you big money if you’re not in compliance. Build your company on a firm foundation by following these contracting basics and understanding these four business issues.
This is the third blog in a four-part blog series that will outline the common business challenges our members face – and how these challenges can be dealt with.
Check back soon for part four of the series, which will talk about sales tax methods. Check out previous posts: part one (licensing requirements) and part two (prevailing wage jobs). -Chuck Wilson, NSCA Executive Director