Oregon procurement manual

What is a specification?

A specification is a critical element of a solicitation. A specification is the primary means of communicating agency requirements, including physical, functional or performance characteristics of a product or service, to potential suppliers. A specification can also include a description of what a supplier must offer to be considered for an award, and a description of any requirements for inspecting, testing, or preparing a product or service for delivery.

Specifications determine and control the:
  • Minimum quality level of the product or service.
  • Extent to which competition can be leveraged.
  • Suitability or fit of the product or service for its intended purpose.
  • Evaluation factors that support a best value determination or award.
This section describes the types of specifications, essential characteristics of a specification, and other discrete elements of a solicitation document that characterize the procurement need. A procurement team must consider these elements, and how they are used, according to the type of product or service being procured and the method of the procurement.

Note: If the total value of the procurement exceeds the agency’s delegated procurement authority, a requesting agency must submit a purchase request through ORPIN or email a Contract Services Request to DAS Procurement Services (procuring agency), to develop and issue a solicitation on behalf of the agency. The elements described in this section should support and be included in an agency’s request. 

A specification in relation to other solicitation or contract document elements

Discrete elements of solicitation or contract documents include requirements, specifications, and depending on the type of product or service and method of procurement, a scope of work or statement of work

While some procurement teams may reference these elements interchangeably, they each have unique characteristics that define the manner in which they are used. A description of the characteristics of each of these elements, and the relationship of these elements to the procurement process, follows:

​Solicitation element
​Description
Requirements ​Throughout the planning phase, (refer to Procurement Planning) the procurement team defines the procurement needs, and develops and refines the strategy, objectives, and requirements to frame comprehensive specifications for the procurement.

Through an elicitation - or information gathering - process, the procurement team works with agency staff and the beneficiaries of the procurement to fully define the business problem and establish the conditions that must be met for a solution to be determined successful. These conditions, which describe the desired outcome of the procurement, are the requirements.

Additionally, administrative rule outlines certain requirements that an agency must consider in a solicitation. As one example, an agency must consider life cycle costing for a competitive proposal or a competitive bid and may optionally consider it for other procurement methods.
Specifications ​A specification elaborates a requirement. A specification defines how the product or service will accomplish the outcome or what standards or performance expectations must be met to achieve the outcome.

The following example illustrates the distinction between a requirement and specification:
  • Requirement - a passenger says to the tax driver, "I want to go to the airport."
  • Specification - the tax driver asks, "Do you need to be there by a certain time, because the freeway is backed up with traffic? Would you prefer the freeway or the tollway to get there?"
A specification should list all the essential characteristics that are necessary to meet the procurement need, deliver value, and encourage competition.
Scope of work ​A scope of work sets forth the core elements of most competitive proposal solicitations, especially those for services issued through RFPs. The scope of work describes what the agency is looking for versus the statement of work in a contract intended to describe the work to be completed as agreed to by the parties.

The scope of work communicates an agency's objectives related to the needed products or services, such as:
  • When the products or services will be provided.
  • Where the products or services will be delivered.
  • Who will receive the products or services.
  • Who will provide the products or services.
  • What the supplier is responsible for.
  • How the supplier is expected to perform.
  • What the inspection criteria requires.
  • What the acceptance criteria requires.
In an RFP, the scope of work should be written broadly enough to establish the parameters of what can be amended into the contract at a later date.
Statement of work
​The statement of work describes the products to be delivered, or the services or work to be performed, and an agency's expectations of the supplier's performance in meeting the specifications of the procurement.

The statement of work provides a commitment for all parties involved in a project and is the core of the contractual relationship with the chosen supplier. Additionally, a statement of work is used to provide the details necessary for already qualified suppliers to respond to an opportunity issued against an existing price agreement.

A statement of work includes, but is not limited to:
  • Performance and service level requirements.
  • Supplemental terms and conditions.
  • Deliverables.
  • Pricing and payment schedules.
  • Schedules and milestones.
A statement of work describes the roles and responsibilities of the agency, the contractor, and its subcontractor(s) in performing the services or work or delivering products specified in the contract.
 
Resource: Use the DAS Procurement Services Statement of Work Writing Guide and Tips for Drafting SOW Tasks as guidance.


Types of specification and when to use each

A procurement professional can use three main types of specifications, depending on the type of procurement, to develop a solicitation document:

A performance specification, also known as a functional specification, describes the procurement need in terms of expected results or the minimum acceptable level of performance of a product or service. A performance specification may include a description of the functional requirements of the end user and the criteria to verify the performance results are achieved. 

This type of specification describes the environment in which the product or service must operate, and any other relevant characteristics, but does not direct the method for achieving the required results. By specifying performance, and not the manufacturing process or the product composition, the responsibility for ensuring the product or service meets the criteria for successful performance, lies with the supplier. 

The following examples illustrate the characteristics of a performance specification:
  • The system must allow the procurement professional to be able to select a solicitation template from an online repository, modify that template and submit the solicitation into the online procurement system in an aligned process.
  • The system must maintain an uptime of 99.5%, excluding planned outages as agreed to with the state.
A performance specification defines what the solution must do without dictating how it must do it. This type of specification provides greater flexibility and enhances competition by enabling potential suppliers to leverage their strengths and creativity to propose solutions that satisfy the requirement. Procurement professionals will often use a performance specification for technology procurements or service related procurements where there is flexibility in the proposed solution.

A procurement professional should ensure that performance criteria is included in the specification and that clear guidelines for verifying that results meet the performance objectives are also documented.
A product or service design specification (design specification) defines both the required results and the method of achieving those results. A design specification describes how an item is designed, manufactured or the process by which the successful supplier will make the product or provide the service. A design specification differs from a performance specification in that it allows no flexibility for the supplier to propose a solution for the required need. 

A design specification usually defines all required materials, production processes, and specifications such as size, shape, color, tolerances, quality, inspection, and packaging, among others. The following are examples of design specifications:
  • The system must demonstrate ability to send and receive invoice packets from a JD Edwards system version 9.1.
  • The roadway must comply with the foundation and surfacing materials design specifications found in attachment B.
  • The mobile application must be built using the Swift programming language.
A design specification has to be managed with care to ensure the extensive specification process does not restrict the competitive process. Additionally, the procurement team should note that in a design specification solicitation, the state assumes total performance risk since the supplier is performing based on the state’s design specifications.

Procurement professionals will often use a design specification for a construction project or when something about the procurement requires a prescriptive approach to the development of the product or delivery of the service to meet a special need.
​A brand name or equal specification defines a procurement need using one or more brand names, model numbers, or other designations that identify attributes, such as standard of quality, performance, functionality or other characteristics of the desired need.

A procurement professional can describe the characteristics needed by specifying the brand name of one or more products or services and allow suppliers who do not provide the named brand to propose alternative solutions that are equivalent or superior to the product or service specified. Brand name or equal specifications are often used for commodities, although they can occasionally be used for services. 

If an agency requires a brand name that is limited to a particular manufacturer, the procurement professional must document this requirement in a determination of brand name specification.

Resource: Use the DAS Procurement Services Determination of Brand Name Specification Form to help draft this justification.

An agency must determine that only the identified brand name will meet the agency needs. The written determination must document that one or more of the following circumstances apply to the agency’s use of a brand name specification:
  • It is unlikely to encourage favoritism in the awarding of contracts or substantially diminish competition for contracts.
  • It would result in substantial cost savings to the agency.
  • There is only one manufacturer or seller of the product of the quality, performance or functionality required.
  • Efficient use of existing products requires the acquisition of compatible products or services.
The use of a brand name specification, justified by a written determination, is typically limited to instances where the procurement professional can clearly show the benefits to the state in using the specific brand. Examples include, but are not limited to:
  • A standard exists and total cost of ownership requires adherence to that standard (for example, fleet vehicles for an agency with a maintenance team).
  • The state requires skills with a specific commodity or service already acquired.

How to develop a quality specification

A quality specification is a core element of a solicitation for a product or service and is a fundamental requirement for a manageable contract. The procurement professional must conduct market research to understand the market and industry prior to developing specifications.

The procurement professional should coordinate with the agency’s procurement team to develop specifications that meet the following characteristics:
  1. Simple: avoid unnecessary detail, but provide sufficient information to ensure that requirements will satisfy their intended purpose.
  2. Clear: use terminology that is understandable to the agency and proposers. Use correct spelling and appropriate sentence structure to eliminate confusion. Avoid legalese, specialized language and jargon whenever possible.
  3. Accurate: use units of measure compatible with industry standards. Clearly identify all quantities and packing requirements.
  4. Competitive: identify at least two commercially available brands, makes or models (whenever possible) that will satisfy the intended purpose. Avoid unneeded “extras” that could reduce or eliminate competition and increase costs.
  5. Flexible: avoid inflexible specifications that prevent the agency from considering or accepting a proposal that could offer greater performance for fewer dollars. When possible, use approximate values such as dimensions, weight, speed, etc., if they will satisfy the intended purpose. If approximate values are used, they should be within 10% unless specified in the solicitation document.
The end product of a well-written specification should be specific, measurable, achievable, realistic, and timely, or SMART.

The number of characteristics that should be included in a specification will vary based on the nature of the procurement. An agency should describe sufficient characteristics, however, to ensure that any product or service that meets all of them, even minimally, would still meet the agency’s needs. If an agency describes too many characteristics, it may inadvertently eliminate products or services that would otherwise meet its needs.

A supplier's role in developing specifications

If an agency determines that it lacks the capacity or capability to develop a quality specification, it can engage a supplier to support this effort. However, a supplier that advises or assists in developing solicitation documents (requirements, specifications, plans, scopes of work, statements of work, invitations to bid, requests for proposals, among others) is not allowed to respond to or receive a contract from a subsequent solicitation unless the procuring agency has received prior approval from the State Chief Procurement Officer (State CPO) to allow an exception for the particular solicitation.

Note: Through its market research, an agency should seek to obtain information from key technical experts, suppliers, prospective suppliers and industry representatives that will facilitate developing clear, precise and accurate specifications. For example, if a procurement team has developed an initial specification, it may provide this in a Request for Information and ask that suppliers validate the requirements and provide feedback and comments that will help the state reach its procurement objectives. In this way, an agency has taken reasonable measure to ensure that a competitive advantage does not exist for a particular supplier.

In addition to or in lieu of obtaining information through an RFI, an agency may determine that it needs assistance in developing a solicitation. If an agency contracts for the advice or assistance from a supplier to develop materials for a solicitation, and also wishes to accept a bid or proposal from the supplier in response to the solicitation, the agency must request an exception from the State CPO prior to awarding a contract for solicitation assistance. The exception must demonstrate that:
  • The agency needs advice or assistance from a supplier to develop the solicitation materials.
  • Accepting a bid or proposal from the supplier that gives the advice or assistance is the only practicable way in which the agency can conduct the procurement successfully.
The State CPO may approve, and must prepare written findings and justifications for the approval, if it determines the exception:
  • Is unlikely to encourage favoritism in awarding public contracts or to substantially diminish competition for public contracts.
  • Is reasonably expected to result in substantial cost savings to the agency, or the public, or otherwise substantially promotes the public interest.
If disapproved, the State CPO must provide written notice to the agency.