In late December 2018, the Philadelphia Inquirer published an article about lobbying by the Philadelphia Building Trades for the Montgomery County commissioners to approve a project labor agreement (PLA) for a courthouse renovation project in Norristown. The article reported as follows:
The labor group, which comprises 50 unions and is run by the politically powerful electricians union head John “Johnny Doc” Dougherty, is lobbying the Montgomery County commissioners to approve a project labor agreement for courthouse renovation in Norristown, a major part of a 10-year project whose estimated costs have increased to more than $400 million. The work includes renovating One Montgomery Plaza, constructing a new justice center, and expanding a nearby public park. A PLA, as it is known, sets standards for wages, includes local hiring requirements, and regulates how disputes are resolved. PLAs, common in the city but not in the suburbs, also require that contractors use union labor.
On January 11, 2019, in a case brought by two nonunion contractors contesting the use of a PLA on a PennDOT project, the Commonwealth Court struck down the use of PLAs on public projects, except in extraordinary circumstances. My post on that groundbreaking decision is here.
Given the breadth of the Commonwealth Court’s ruling against the use of PLAs, absent a showing of extraordinary circumstances, the use of a PLA on the Montgomery County project seems doomed from the start and is almost certain to be challenged in court if the Montgomery County Commissioners seek to use one on the project even in the face of the Commonwealth Court’s decision. For now, until there is a decision from the Supreme Court overturning the Myers and Eckman decisions (which is not a foregone conclusion), the use of PLAs on Pennsylvania public projects is at a standstill.
If you need assistance with a public contracting issue, feel free to call or email me. I’ll be happy to assist in anyway possible.
Effective January 1, 2019, the thresholds for public bidding by Pennsylvania state authorities and municipalities increased moderately from 2018 and are as follows:
- Purchases and contracts below $11,100 require no formal bidding or written/telephonic quotations
- Purchases and contracts between $11,100 and $20,599 require three written/telephonic quotations
- Purchases and contracts of $20,600 and more require formal bidding
Bidding thresholds are adjusted annually for inflation by the Pa. Department of Labor & Industry under Act 90 of 2011. The Pa. Bulletin announcement announcing the 2019 bidding thresholds can be found here.
A project labor agreement (PLA) is a “pre-hire” collective bargaining agreement with one or more labor unions that establishes the working conditions on a specific, usually public, construction project. PLAs are controversial, not least because they typically restrict nonunion contractors from using their own workforce and require them instead to hire their workforce from the local unions’ labor pool, but their previous use on public projects in Pennsylvania has been upheld. However, in a recent case brought by two nonunion contractors, the Commonwealth Court has now invalidated the use of a PLA on a public highway project as a violation of Pennsylvania’s strict competitive bidding requirements for public contracts.
In December 2017, the Pennsylvania Department of Transportation (PennDOT) issued a bid for a highway improvement project for US Route 202 in Norristown. The bid required the winning contractor to sign a PLA with the Building and Construction Council of Philadelphia and Vicinity, which represented 11 local unions. The PLA required the winning contractor to hire their workforce through the local unions and to be bound by the local unions’ collective bargaining agreements. However, the PLA also specified that, if the winning contractor had a collective bargaining agreement with the United Steelworkers union, which was not one of the 11 local unions, then the contractor was permitted to use its own workforce.
Allan Myers, L.P. (Myers) and J.D. Eckman, Inc. (Eckman), two nonunion contractors, filed protests with PennDOT, challenging the use of the PLA. Myers and Eckman argued that the PLA was unlawful, arbitrary and discriminatory, as it disfavored nonunion contractors and unduly favored contractors affiliated with United Steelworkers. PennDOT disagreed, arguing that case law supported the use of a PLA on a public works project. The protests were denied, and Myers and Eckman then appealed to the Commonwealth Court. Read more
Bidding instructions are for the most part mandatory. The failure to follow bid instructions can easily result in the rejection of a bid. That is exactly what happened to one unfortunate bidder who submitted its bid by email instead of through the online portal specified by the bid instructions.
In January 2017, the PA Department of Environment Protection (DEP) advertised a bid solicitation on the PA eMarketplace website for a contract to provide services in support of the development of a climate change action plan. The bid advertisement specified, in bold print, that potential contractors were required to complete their bids via an online portal and further stated, also in bold print, that bid responses “will only be accepted electronically.”
Center for Climate Strategies, Inc. (CCS) was unable to submit its bid via the specified online portal. Instead, CCS emailed its bid to three DEP employees as a “failsafe” measure prior to the bid deadline. Because CCS’s bid was not submitted via the online portal, DEP rejected the bid as “non-responsive.” CCS protested the rejection on grounds that its bid submission was timely and complete in all respects and that the online portal was unavailable to CCS through no fault of its own. The protest was denied, and CCS then appealed to the Commonwealth Court. Read more
A challenge to a public bid or contract ultimately depends on the “standing” of the challenger to bring the challenge. Standing means that the party initiating legal action must show that it has been “aggrieved” – i.e., that it has a “substantial, direct, and immediate interest in the outcome of the matter. A recent decision by the Commonwealth Court squarely addressed the issue of standing in the context of a public bid solicitation and found it lacking.
In December 2017, the Pennsylvania Department of Transportation (PennDOT) issued a bid solicitation for a contract to perform highway improvements to US Route 202 in Norristown. The bid required contractors to sign a project labor agreement (PLA) with the Building and Construction Council of Philadelphia and Vicinity.
Two employees of a nonunion contractor, Allen Myers LP (Meyers), filed an action in the Commonwealth Court seeking to enjoin PennDOT from requiring contractors to sign the PLA as a condition for bidding and performing work on the Route 202 project. They alleged that the PLA precluded nonunion contractors from bidding on the project and applied different standards to different bidders, and alleged that the PLA requirement violated the Commonwealth Procurement Code and the State Highway Law. Read more