Dynamic SQL Cursor Problem

I am getting into the wonderful world of SQL. I know how to set up a normal
cursor and process it, but I thought I would use a dynamic SQL statement so
I don't have to deal with 2 cursors that are a bit different, but mostly the
same. However I am having problems. When I run the prepare statement, I get
an SQLCOD error of -312. Which means, "Host variable &1 not defined or not
usable."  What am I doing wrong? 

Here is the relevant code:

 * Dynamic SQL Statements                                               
D VendorSel       S            256            
                                
 * Build the Vendor Cursor                                              
C/EXEC SQL                                                              
C+ DECLARE C1 CURSOR FOR S1                                             
C/END-EXEC                                                              
                                                        
**** Other code including the fetches from the cursors 


C     *INZSR        BegSR                                    
 *                                                                  
C                   EXSR      $BuildSQL                             
 *                                                                  
 * Prepare the Vendor Cursor                                        
C/EXEC SQL                                                          
C+ PREPARE S1 FROM :VendorSel           <<<<< SQLCOD = -312 Here after it
executes                            
C/END-EXEC                                                          
 * Open the Vendor Cursor                                           
C/EXEC SQL                                                          
C+ OPEN C1                                                          
C/END-EXEC                                                          
 *                                                                  
C                   EndSR                                           


C     $BuildSQL     BegSR

 *

 *    Build the SQL statement for the VendorFile Cursor

C                   Eval      VendorSel = 'SELECT * FROM FILENAME'  
 *                                                                 
C                   If        Vendor <> *Blanks                    
C                   Eval      VendorSel = %TRIM(VendorSel) +       
C                             ' WHERE VENDOR = :Vendor'        
C                   EndIf                                          
 *                                                                 
C                   Eval      VendorSel = %TRIM(VendorSel) +       
C                             ' ORDER BY VENDOR'

 *

C                   EndSR

'Vendor' is defined in the 'D' specs, it is inputed with several other
variables. The SQL statement that is built is correct, I can use it as a
static SQL statement. 

Any help would be appreciated...

Mike Wills
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