Commonwealth Court: Laches Requires Reversal Of Injunction Issued For Violation Of Separations Act

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A recent decision by the Commonwealth Court of Pennsylvania illustrates the extreme perils of waiting too long to challenge a violation of the public bidding laws.

In December 2015, the West Jefferson Hill School District solicited bids for a new high school project. All sanitary, storm, and water line installations inside and up to five feet outside the building were included in the scope of the prime plumbing contract. All site sanitary, storm, and water line installations more than five feet from the building were included in the scope of the prime general contract as “site utility” work. In January 2016, the school district awarded the prime plumbing contract to Wheels Mechanical Contracting (Wheels).

In June 2016, Wheels filed for an injunction to stop work on the project, alleging that the school district had violated the Separations Act by failing to include the “site utility” work in the plumbing contract.  In October 2016, the trial court entered an injunction, finding that the “site utility work” was “plumbing branch work” that belonged in the plumbing contract. The trial court rejected the school district’s laches argument, explaining that Wheels was under no duty to recognize the illegality of the bid and that no work had commenced at the time of suit. (The doctrine of “laches” generally bars relief when the complaining party is guilty of want of due diligence in failing to promptly institute the action to the prejudice of another.)

On appeal, the Commonwealth Court found laches and reversed the trial court, holding that the dilatory conduct by Wheels in filing suit showed a lack of due diligence which caused prejudice to the school district and the other contractors on the project:

Wheels, as a bidder for the plumbing contract, was well aware when it submitted its bid  what work was part of the plumbing prime contract and what work was in the general construction prime contract. The information was in its reach. Yet, Wheels did not raise a bid  protest during the bid process. Rather, Wheels waited until June 1, 2016, to file this action, which was nearly seven months after notice of the bid specifications, five months after the bids were awarded, and four months after work on the Project commenced.

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Moreover, Wheels’ delay in filing suit prejudiced the District and other contractors by critically delaying work on the entire Project after construction began. At the time of suit, not only were contracts awarded and materials purchased, but the Project construction was well underway.

In its decision, the Court reviewed cases alleging violations of the Separations Act and could find no case where a party waited seven months after bids were advertised to seek relief. In this context, the Court remarked “that vigilance and swift action is critical in the context of the competitive bidding process.”

The moral of the story is to strike while the iron’s hot. Wheels could have easily won its case, at trial and on appeal, if only it had filed suit when the bids were first issued.

If you need assistance on a public bidding issue, feel free to call or email me for a no-cost consultation.  I’ll be happy to assist in anyway possible.

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Posted on by Christopher I. McCabe, Esq. in Court Decisions, Separations Act Leave a comment