Christopher I. McCabe, Esq.

Can Retainage Be Held Until Final Completion Of The Project?

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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

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Posted on by Christopher I. McCabe, Esq. in Procurement Code, Retainage Leave a comment

Can A Public Owner Ever Seek Clarification Of Ambiguous Pricing?

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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

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Posted on by Christopher I. McCabe, Esq. in Bid Protests Leave a comment

Debriefing After Non-Selection Does Not Toll 7-Day Deadline For Bid Protest

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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

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Posted on by Christopher I. McCabe, Esq. in Bid Protests, Com. of Pa., Court Decisions, Procurement Code Leave a comment

Does Separations Act Prohibit Use Of Best Value Contracting For Construction Of Philadelphia Public Buildings?

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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.

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Posted on by Christopher I. McCabe, Esq. in Best Value Contracting, City of Phila., Separations Act Leave a comment

Does PA Steel Act Prohibit Public Owner From Specifying Foreign-Made Cast Iron Boiler?

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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

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Posted on by Christopher I. McCabe, Esq. in Steel Products Act Leave a comment

Disappointed Bidder Lacks Standing To Challenge P3 Contract Award By Non-Commonwealth Entity

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In a recent case of first impression, the Commonwealth Court of Pennsylvania has affirmed a lower court ruling that a disappointed bidder lacked standing to challenge a contract awarded by a non-Commonwealth entity under the Public-Private Transportation Partnership Act (P3 Act).

In April 2016, the Northampton County General Purpose Authority issued a Request for Proposals under the P3 Act for the Northampton County Bridge Renewal Program for the replacement, rehabilitation, and maintenance of 33 bridges in Northampton County. Four bidders responded, including Clearwater Construction, Inc./Northampton County Bridge Partners LLC and Kriger Construction, Inc.  Ultimately, the Authority selected Kriger to negotiate a public-private partnership agreement to develop the bridge renewal program. Read more

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Posted on by Christopher I. McCabe, Esq. in Bid Protests, Court Decisions, Public Private Partnership Leave a comment

City Of Allentown Permitted To Use RFP Process For Waste Services Contract

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In a decision issued on July 20, 2017, the Commonwealth Court of Pennsylvania upheld the City of Allentown’s use of the Request for Proposals (RFP) process in a contract award.

In 2015, Allentown issued an RFP for the award of a long-term solid waste and recyclables contract.  Previously, Allentown had used an Invitation to Bid (ITB) process for the same contract. When a contract award was ultimately made to Waste Management of Pennsylvania, Inc., two bidders filed for an injunction, arguing that Allentown’s use of the RFP process was contrary to law. The trial court denied the injunction and an appeal was taken. Read more

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

Are RFQs Immune From Protest Under The Procurement Code?

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If you respond to a Request for Quotes (RFQ) issued by a Commonwealth department or agency, can you protest if the resulting purchase order is awarded to another bidder?

According to the Commonwealth’s Office of Administration, the answer is no.  In a recent protest, the OA issued a letter which took the remarkable position that  “‘Award’ under an RFQ merely results in a Purchase Order under an existing multiple-award contract; therefore an RFQ is not the solicitation or award of a contract, and cannot be protested.”

Needless to say, this position is not supported by a fair reading of section 1711.1 of the Commonwealth Procurement Code which allows an aggrieved bidder or prospective bidder to protest the solicitation or award of a state contract. Certainly, a purchase order that is part of a multiple-award contract is nonetheless a contract; indeed, without issuance of a purchase order, the multiple-award contract is essentially meaningless. Likewise, an RFQ is a solicitation for a quote which may result in a contract – i.e., the purchase order.

Read more

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Posted on by Christopher I. McCabe, Esq. in Bid Protests, Com. of Pa., Procurement Code Leave a comment

Pennsylvania Initiates Disparity Study For Small Diverse Business Program

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In June 2017, the Commonwealth of Pennsylvania initiated a disparity study that will provide information to help the Department of General Services (DGS) implement the Pennsylvania’s Small Diverse Business Program. The expected completion date for the disparity study is September 2018.

The study will include analyses of the participation of minority-, women-, disabled-, veteran-, and LGBT-owned businesses in prime contracts and subcontracts awarded by DGS during the period from July 1, 2011, through June 30, 2016.

DGS has created a webpage highlighting the disparity study, with materials and a description of study team members.

The materials presented at the disparity study’s kickoff meeting can be found here.

An FAQ on the disparity study can be found here.

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Posted on by Christopher I. McCabe, Esq. in Com. of Pa., DBE/MBE/WBE, DGS Leave a comment

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). Read more

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