On public projects, an owner typically withholds retainage of 10%. Can the owner hold this 10% retainage until final completion? The short answer is, No!
Section 3921 of the PA Procurement Code mandates that, when the contract is 50% completed, retainage “shall not exceed 5% of the value of completed work” and can then be withheld only until substantial completion. The only condition is that the contractor must be making “satisfactory progress,” and there must be no cause for a “greater withholding.” Read more
Recently, a public owner solicited bids for a university construction project. The bid form sought pricing for base bid work and alternate work. One of the bidders included ambiguous pricing for an alternate item, in that the pricing was neither an “add” nor a “deduct” to the base bid price. Instead, it appeared to be a “total” price for all of the work combined. This “total” price, if accepted, would have been the lowest if award was made on the basis of the alternate. The problem with this bid pricing was soon apparent. The bid instructions had informed bidders that alternate pricing was to be added to the base bid pricing to arrive at a total bid price for use in determining the ranking of the bids. The owner was understandably confused by the pricing which did not conform to the bidding instructions.
Under these circumstances, the owner did not reject the bid as ambiguous, but instead actually called the bidder to seek clarification of the pricing. Having received a “clarification,” the owner then expressed an intent to award a contract to the bidder. A protest was soon filed by another bidder, and the protest was later sustained for obvious reasons. Read more
The Pa. Procurement Code sets a strict deadline for bid protests – the protest must be filed within seven days after the protestant knew or should have known of the facts giving rise to the protest. If the protest is untimely, it will be rejected. The impact of this brightline rule was shown in a recent Commonwealth Court decision involving a late-filed protest.
In 2016, the Pa. Department of Human Services issued an RFP seeking proposals from managed care organizations to implement a managed care program for physical health and long-term services for the elderly and disabled. After evaluation of proposals, the Department notified one of the bidders, UnitedHealthcare of Pennsylvania, Inc., that it was not selected. Thereafter, the Department conducted a debriefing with UnitedHealthcare where it provided information concerning the strengths and weaknesses of UnitedHealthcare’s proposal. Unhappy with the outcome, UnitedHealthcare filed a protest, more than seven days after it was notified that it was not selected, but within seven days of the debriefing. The Department denied the protest as untimely, and UnitedHealthcare filed an appeal with the Commonwealth Court. Read more
Now that “best value” contracting is officially the new game in town for City of Philadelphia procurement, with the issuance of the new best value regulations, it’s worth asking whether the longstanding Separations Act precludes the City from using best value contracting for contracts for the construction of public buildings.
The Separations Act provides that, for public building construction in Pennsylvania in excess of $4,000, all public owners must prepare separate specifications, solicit separate bids, and award separate contracts for general construction, plumbing, heating and ventilating, and electrical work, with the additional requirement that the award must be made to the “lowest responsible bidder.”
The Separations Act unquestionably applies to the City. With a mandate to award the contract to “the lowest responsible bidder,” the Separations Act would appear to prohibit the City from using a “best value” standard to award construction contracts for a City public building project. Of course, time will tell whether City officials and the courts will agree with this viewpoint.
If you need assistance on a Separations Act issue, feel free to call or email me for a no-cost consultation. I’ll be happy to assist in anyway possible.
The PA Steel Products Procurement Act requires that all steel products (including cast iron products) supplied on a Pennsylvania public works project must be made from U.S.-made steel.
Recently, a school district’s contract specified a cast iron boiler manufactured in Europe as the so-called “basis of design.” No domestic cast iron boilers were permitted under the boiler specification. Is this practice legal under the PA Steel Products Procurement Act? Can a public owner simply override the Steel Act with a proprietary specification for a name-brand product which is made outside the U.S. but which is preferred by the owner’s design team? Read more