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Housing Agency Marketplace - Housing Agency Marketplace
Customer Support: 866-526-9266

Thu. Nov 30, 2023
08:01 PM UTC

HUD Procurement Handbook 7460.8 REV 2
This handbook is originally from the U.S. Department of Housing and Urban Development (HUD)

                                                       7460.8 REV 2

9.1 General

This chapter describes the development of specifications and statements (or scopes) 
of work, along with their uses. Properly prepared or described specifications and 
statements of work (1) enhance competition, and (2) clarify the relationship between 
the contractor and the PHA, resulting in improved contract administration

9.2 Regulatory Requirement

24 CFR 85.36(c) states, in part, “all procurement transactions shall be conducted in 
a manner providing for full and open competition.” In compliance with this 
requirement, the specifications or statement of work must be designed so as not to 
restrict competition to one supplier. 

9.3 Specifications (24 CFR 85.36(c)(1)(i))

	A.	Definition. A specification is a detailed description of materials, 
		supplies, equipment, pre-cuts, or construction work that is used in 
		the procurement process to tell prospective contractors precisely 
		what the PHA desires to purchase. (A statement or scope of work is 
		a unique type of specification generally used for the procurement 
		of professional or management services, as discussed in paragraph 
	B.	Specification Types. Three general types of specifications are used 
		in preparing contracts for equipment, supplies, or construction – 
		functional or performance specifications, design specifications, 
		and brand name or equal specifications. While these general types 
		are described below, it is rare to find specifications that fit 
		completely into just one of the above categories. Most 
		specifications contain a combination of design and performance 
		requirements and may, include brand name or equal descriptions 
		of components.
		1.	Functional or Performance Specifications. These 
			specifications contain performance characteristics 
			that are desired for the item or that identify how 
			the item functions. The detailed design or exact 
			measurements are not stated. 
			A functional or performance specification is 
			inherently risky. Performance specifications state 
			the overall requirements so that each contractor may 
			furnish its own item to meet the required 
			performance. For example, a new boiler specification 
			can simply call for a gas-fired hot water boiler 
			that will produce 100,000 British Thermal Units 
			(BTU) per hour. It is easy to imagine a gas-fired 
			boiler that can produce 100,000 BTUs per hour but 
			may also require continuous and costly maintenance.
		2.	Design Specifications. Design specifications contain a 
			description of the item desired as opposed to 
			performance standards. Design specifications may be as 
			detailed as needed. Depending on the nature of the 
			item, the design specifications may contain precise 
			measurements, tolerances, materials, product tests, 
			quality control, and other detailed information, 
			provided competition is not being limited to one 
			product. The information furnished in the specification 
			should be sufficiently detailed to ensure that all 
			items manufactured to the specifications will be 
			virtually the same. A detailed description of kitchen 
			cabinets, giving dimensions, fastening details, 
			materials, and hardware, is one example of this type of 



                                                          Handbook No. 7460.8 REV 2
		3.	Brand Name or Equal Specifications 
			(24 CFR 85.36(c)(1)(vi)). Under this form of 
			specification, clear and accurate product descriptions 
			are developed. These descriptions shall not contain 
			features that unduly restrict competition. It may be 
			necessary to describe technical requirements for 
			materials and equipment by referencing brand name 
			products in order to define performance or other 
			salient requirements. References to brand names shall 
			be followed by the words “or equal” and a description 
			of the item’s essential characteristics so that 
			competition is not restricted.

			Specific brand names may be used only for establishing 
			design and quality standards and only if there is no 
			other reasonable method of designating the required 
			quality of the item desired. When brand names or 
			catalog numbers are used, inform the offerors that 
			such references establish only design or quality 
			standard; in fact, any other products that clearly and 
			demonstrably meet the standard are also acceptable.

	C.	Standardizing Inventory. Many PHAs, for efficiency, standardize 
		their inventory of equipment and parts. As stated above, PHAs 
		must comply with procurement standards that requires full and 
		open competition and prohibits using specifications that unduly 
		restrict competition. To standardize the PHA’s inventory, 
		specifications or descriptions that use brand names may be used 
		only when accompanied by the term “or equal.”  The specific 
		features of the product (design, functional, or performance) 
		that are essential in order to be considered “or equal” shall be 
		clearly stated. In addition to the brand name product specified, 
		any other product that meets the same technical requirements 
		shall be given full and fair consideration.

		In all cases, the PHA should give all offerors the opportunity 
		to present reasons or data showing that their product can meet 
		the stated requirements. Descriptions or specifications shall 
		not be written so as to specify a particular product or feature 
		of a product particular to one manufacturer unless that feature 
		or product is critical to the intended use. 

	D.	Avoiding Manufacturers Specifications. PHAs should avoid 
		incorporating a particular manufacturer’s specification as the 
		project specification. This may give the appearance of restricting 
		competition and suggest that other manufacturers’ products are at 
		a disadvantage and may not be accepted. If the PHA specifies a 
		brand name cabinet, the essential key elements or features of the 
		product should be stated. For example, if specifying kitchen 
		cabinets with the key features of solid wood doors and plywood 
		frames, then many available brands and styles of cabinets will 
		meet the key criteria. Therefore, all of these brands should be 

	E.	Contractor-Developed Specifications (24 CFR 85.36(c)(1)(iv)). In 
		order to ensure objective contractor performance and eliminate 
		unfair competitive advantage, contractors funded to develop or 
		draft specifications, requirements, statements of work, 
		invitations for bid, or requests for proposals shall be excluded 
		from competing in the procurement. The only exception to this rule 
		is if, prior to the solicitation, all respondents to solicitations 
		are provided with materials and information made available to the 
		contractor involved in matters pertinent to the solicitation.



                                                          Handbook No. 7460.8 REV 2  
9.4 Statement of Work (SOW)

A statement or scope of work SOW is normally used for contracts for services, such as 
accounting or payroll services, energy audits, consultant, legal or A/E services, as 
well as non-professional services such as maintenance and grounds keeping. 
	A.	Purpose and Functions of the SOW. The primary purpose of a SOW is 
		to provide a basis for mutual understanding between the PHA’s 
		Contracting Officer and the offeror and subsequent contractor of 
		the PHA’s requirements.
		1.	The adequacy and detail of the SOW may affect the number 
			of offerors who are willing and able to respond. If the 
			SOW is not specific enough, some may not respond, either 
			because of uncertainty about the risks involved or 
			because they may not understand the relationship of the 
			requirement to their own particular capabilities.
		2.	The clarity and specific detail of the requirements 
			presented in the SOW directly relate to the amount of the 
			offer and the quality of the proposals submitted. 
		3.	Under the competitive proposals method, the SOW 
			establishes conclusive baseline tasks that are the 
			foundation for sound evaluation criteria. The SOW plays 
			a significant role in the proposal evaluation and 
			contractor selection process.
		4.	The SOW also becomes the standard for measuring contractor 
			performance. When a question arises over an apparent 
			increase in the scope of the work to be performed, the SOW 
			is the 	baseline document for resolving the question. 
			Negotiation of cost and schedule modifications will be 
			impaired, if not rendered impossible, if the SOW is not 
			definitive in these areas. (Alternately, some 
			solicitations may include the actual contract, which is 
			summarized or referenced in the statement of work.)
	B.	Elements of the SOW. The particular issues to be addressed in a 
		SOW will vary with the nature, purpose, size, and complexity of 
		the work. At a minimum, every SOW should include: 
		1.	Detailed work and task requirements;
		2.	End results and deliverables, including the criteria which 
			a deliverable must meet to be considered acceptable;
		3.	Delivery schedules/period of performance;
		4.	Any reporting and compliance requirements;
		5.	A precise statement of the objectives;
		6.	Contact information for PHA contact person/contract 
			administrator; and 
Other special considerations (warranties, personnel and required classifications, 
testing procedures, procedural safeguards, etc.).                                                                                                                   



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