The Fix Is In

The writing of a highly technical specification favoring the products of a single manufacturer is not as easy as scrawling, "Use Tremco product here," or something to that effect. The state Legislature, recognizing that proprietary specs are a problem in public contracting, wrote into law that brand names may only be used in building specifications when there are "no known equals." And even then, descriptive details must be written in such a way that competition to supply the product is not limited by unreasonable technical restrictions.

For example, Campbell says she was ordered to write a series of specs that included such highly specific items as "TREMCO Burmastic [a roof glue] or approved equal." Since Tremco reps at UCSF helped write the specifications, the requirements for becoming an "approved equal" often meant that no other materials could qualify.

Campbell kept meticulous files on her allegations. On Aug. 18, 1992, for instance, she protested in a memo that her supervisors would only discuss creating specs that eliminated all but Tremco products from consideration. In early 1996, Campbell herself wrote specs that favored Tremco for roofing work at UCSF's Woods Building and Buchanan Dental Clinic Building. In February 1996, Campbell e-mailed her boss, Gary Nelson, that these specifications were "written by Tremco to exclude all other manufacturers." Nelson e-mailed her back not to change the criteria.

Even a layman can see that these specs bear a remarkable similarity to those suggested by Tremco's internal guidelines for spec writing. For instance, both the UCSF documents and the Tremco rules say that roofing-material suppliers must have been in existence more than five years; must possess a certain net worth; and must own the factories in which the materials are manufactured. These are onerous restrictions that automatically eliminate many small- and medium-size roofing suppliers. According to Midwest Roofer, the use of Tremco guidelines in spec writing usually results in "literally pages of specification requirements that verge on the ludicrous because they are so blatant in their effort to eliminate competition."

After acknowledging that "We as a company are sometimes accused of writing tight specifications designed to eliminate competition," the Tremco guidelines advise the firm's sale force to get chummy with business managers and maintenance superintendents at public school districts. Convince them to let you write the specs, the guidelines urge, and then "write items into the specs which our competition does not have."

Once the competition has been squeezed out, the sole-source contractor can jack up his prices. The Dayton Daily News concluded that in Ohio, Tremco was able to charge substantially more for proprietary-spec jobs than for those where it had to bid competitively. Campbell obtained a comparison between Tremco products in use at UCSF projects and equivalent products of a competitor, Henry Co. The chart showed Tremco was charging two and three times Henry's price for comparable materials.

In April 1997, Campbell wrote a memo to her boss about proprietary specs for a roof at the UCSF dental school. She noted that the building manager had ordered the use of Tremco boilerplate specs. She said that Andrew Smith, the Tremco sales rep for UCSF, "was [improperly] paid [by UCSF] to do the specs." She also claimed that "safeguards appear to have been deleted ... [the safeguards are] necessary for Code Requirements, for accurate and lower bidding, and to be able to avoid change orders [i.e., cost overruns] and provide constructibility." She also listed 50 specs that were unnecessarily restrictive and costly.

Nelson, she says, never replied.

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Campbell's crusade got some reinforcement when a San Jose heating, ventilation, and air-conditioning (HVAC) contractor filed suit last April in San Francisco Superior Court against UCSF, the UC regents, and several architects, consultants, and suppliers.

John Karamanos, owner of HVAC Sales Inc., alleges that employees of the architectural and engineering divisions at UCSF and UC Davis wrote proprietary specifications for millions of dollars' worth of HVAC equipment. Karamanos and his lawyer, Zane Negrych, say they've presented their charges to the same FBI agents who have interviewed Campbell. UC officials said they do not comment on pending litigation, and the other defendants deny the allegations.

To buttress his case, Karamanos produced a recent internal audit of the UC Davis architectural and engineering offices. Campus auditors had concluded that employees of those divisions "were treated ... to golf tournaments and related social events" by building contractors involved in six campus construction projects from 1992 to 2000.

The auditors said they found no evidence that contractors and vendors who had supplied the golf goodies had received preferential treatment in return. But they noted that "the acceptance of gifts put the University at risk of the appearance of favoritism." Their report also said that "construction culture promotes the offering of gifts to customers" and urged that university rules against accepting them be tightened. The audit said unspecified disciplinary action was taken against employees who took the golf freebies.