Bid Procedures Shed Light on LED Pricing

Lighting specifications that favored a particular manufacturer added hundreds of thousands of dollars to the cost of the new Sylvan Hills High School and illuminated how much control architects, engineers and lighting wholesalers have over bid specs.

The overall project was under budget, though, and the Pulaski County Special School District had no problem letting less expensive but non-conforming bids fall by the wayside.

“A single-name spec for public school projects is not in the best interest of taxpayers,” said Joe Rice, president of Innovative Power Solutions in North Little Rock, which bid on the Sylvan Hills project but was neither the low bidder nor the higher-priced winner.

Energy-efficient LED lighting has become a must-have feature for new schools and retrofits. The up-front cost has led some to believe lighting deserves special consideration in the bid process.

Rice advocates qualifying lighting packages from three different sources as a new standard bidding procedure to generate increased competition.

“If there were requirements for a multi-source spec, school districts could save a whole lot of money,” he said.

A single-name spec — using one company’s product line as the base — is typical in bid solicitations, and a project’s architect and engineer decide what that specified package will be. Bid solicitations also commonly leave open the possibility of alternate packages subject to review and approval. Ultimately it’s the project’s owner — the school district — decides on the criteria.

David Porter, principal at Polk Stanley Wilcox Architects of Little Rock, which was not involved in the Sylvan Hills project, said it is easier to review a possible substitution after bids are opened instead of the hectic days leading up to bid day.

“It’s in the best interest of the owner and the project to review substitution requests post-bidding,” he said. “There’s not a proper time to assess whether it’s equal to the design standard or not. It’s the bidder’s responsibility to use the basis of design or an acceptable substitute.”

If the low bidder includes a substitution, then it undergoes review by the project engineer and architect to determine if it equals or exceeds the performance and aesthetics of the specified product.

“The process is typically the same for any other public or private job,” Porter said. “We name a certain product as a basis for design and always have a clause that allows for acceptable alternatives. It’s up to the general contractor to vet the bids and bidders and determine what should be reviewed by us.”

But substitutions seem more theoretical than realistic. Electrical contractors say lighting substitutions rarely gain approval in the review process.

An electrical contractor makes a bid using a quote on a lighting package from the distributor or manufacturer’s representative. Whichever firm controls the specified brand controls lighting price quotes for prospective bidders.

Expanding the field of acceptable product names can add another layer of financial competition to the bidding.

Different suppliers handle different product lines in different territories. In the Little Rock area, Cooper Lighting is among the lines handled by Malmstrom White Co., Acuity Brands is under the Long Sales Agency umbrella and Diversified Architectural Lighting is sold by Lighting & Power Solutions.

Doing three-name specs in bid solicitations isn’t common nor is it legally mandated. But some in the industry wouldn’t mind changing the law when it comes to bidding on lighting.

“If someone politically were interested in this, we might raise some issues with them,” said an electrical contractor. “Right now, I don’t know who that person would be.”

In addition to increasing competition, a three-name spec would lessen the pricing control of the company representing a single-name spec.

“The architect and engineer are going to have to do a ton of work to get a three-name spec,” said an executive at another electrical contracting firm. “But a three-name spec would get rid of all of this. Or have the lighting reps bid the projects.”

Neither contractor wanted to be named to avoid any negative fallout from talking about something that has become a flashpoint in their industry.

Sylvan Hills Example
The issue of substitution and competitive specs developed into a public dispute in the first phase of the $65 million Sylvan Hills High School project in Sherwood. This $30 million piece of the project, encompassing an office-classroom building and a cafeteria-dining addition, should be completed in fall 2019.

The contract for electrical work was awarded to the third-lowest bidder: Conway’s Nabco Mechanical & Electrical Contractors, which complied with the bid specs calling for Cooper Lighting.

Nabco’s bid was $300,000 more than the low bid submitted by Staley Electric Services of Little Rock and $200,000 more than the bid by Innovative Power Solutions. The lower bids substituted an Acuity lighting package.

“There’s always a big debate about form and function, but if you’re willing to compromise on form, you can save a lot of money on function,” said Rice of Innovative Power.

Robert Bolin, general manager of Staley Electric, declined to be interviewed. Also declining comment was James Long, principal at Long Sales Agency, a manufacturing sales representative for Acuity.

Lighting & Power Solutions also submitted a lighting package for possible inclusion in the bidding for electrical contract work at Sylvan Hills. “We put together a package for consideration, but it wasn’t approved,” said VP Charlie Thornton.

As he recalled, some aspects of the lighting products didn’t pass aesthetic muster with WER Architects, which designed the project.

“We could’ve gone ahead and put together something for bid anyway, but we didn’t feel comfortable doing that,” he said.

On Dec. 12, Long went before the Pulaski County Special School District Board to express his concerns with the bid process and the additional cost to the school district.

Perspectives differed on what happened during the review process.

“We have a clear set of rules for how we do things, and we follow it by the book and don’t bend the rules,” said Russ Fason, principal at WER Architects. “The process is open to anyone to submit substitutions. They just have to meet the specifications. They didn’t submit the issue for review. We can’t approve something we didn’t review.”

What’s his opinion of going beyond a single-name spec?

“We always try to encourage multiple source bids,” Fason said. “From us on our end, we don’t care which supplier gets the job as long as they meet requirements. All of our work is open spec.

“Any manufacturer can make a substitution request for review, which includes a cut sheet [of the product’s operational specifications] for performance review by the engineers and what [the product] looks like for us to review the aesthetics.

“We’re happy to review it.”

Scott Copas, CEO at Little Rock’s Baldwin & Shell Construction Co., said his firm handles private and public projects largely the same way. The company is the construction manager on the Sylvan Hills project.

“We use the same standards for private work,” Copas said. “The difference is we have public bid openings for public work. We don’t create the standards. The design team creates the standards. We make sure the process is fair and consistent with everyone.

“That’s why people like doing business with us. They know we’re not going to show favoritism to anyone. Most subs appreciate that because there are no games played under the table.”

The newly independent Jacksonville North Pulaski School District sought three-name specs for lighting in its $65 million Jacksonville High School. It shares with Sylvan Hills the design team of WER Architects and the Little Rock engineering firm of Bernhard TME.

WER’s Fason said the three-name bid criterion was dictated by the Jacksonville North Pulaski School District just as PCSSD chose the terms for Sylvan Hills.

“Lighting is such a critical point because we’ve been burned in the past,” he said. “The worst thing is to get a product that doesn’t deliver what’s expected. That’s why we’re so particular in the review process.”