How many votes are needed for a municipal authority board to award a public contract? The Commonwealth Court recently held, in Seda-Cog Joint Rail Authority v. Carload Express, Inc., 185 A.2d 1232 (2018), that a majority vote of board members present and voting is sufficient and effective to award the contract and that abstaining board members are not counted as “present” even if they are physically present.
The Seda-Cog Joint Rail Authority (Authority), is governed by a 16-member board of directors and owns rail lines in several Pennsylvania counties, which are operated by a private railroad operator. In 2014, the Authority issued an RFP for a new operating agreement. The RFP contemplated that the highest scoring operator would receive the new agreement. Because of abstentions by board members, it was clear throughout the RFP selection process that no more than 10 board members would vote to decide the contract award. The Authority also informed candidates that it would require “yes” votes from at least nine board members to award a contract. However, this voting requirement was not included in the RFP or the Authority’s bylaws.
At the end of the evaluation process, Carload Express, Inc. (Carload) received the highest score. A meeting of all 16 board members was held, with seven votes in favor of Carload, three votes against, and six abstaining. The Authority declined to award the contract to Carload, and filed an action seeking a declaration that the 7-3 vote was ineffective. Carload filed a counterclaim seeking a contrary declaration, and an order requiring the Authority to execute a contract with Carload. The trial court ruled in favor of the Authority and Carload appealed to the Commonwealth Court. Read more