The Pa. Prevailing Wage Act mandates that workers on Pennsylvania public construction, reconstruction, demolition, alteration, or repair projects costing more than $25,000, other than those involving “maintenance work,” must be paid the general prevailing minimum wage rates. “Maintenance work” is defined in the Act as “the repair of existing facilities when the size, type or extent of such facilities is not thereby changed or increased.”
According to the Pa. Supreme Court’s 2008 decision in Borough of Youngwood v. Pennsylvania Prevailing Wage Appeals Board, the definition of maintenance work must be narrowly construed:
[B]ecause the Act provides that “public work” includes “repair” and that the exception to “public work” (i.e., “maintenance work”) includes “repair” of a specific type, it logically follows that the General Assembly intended that “maintenance work” be considered a lesser or minor form of “repair.” Therefore, we hold that in construing the Act, the focus must fall principally on the Act’s clear mandate that prevailing wages are to be paid to workers on public works projects that meet the criteria of 43 P.S. § 165-2(5), taking into consideration that “maintenance work” is an exception to this mandate and must be narrowly construed. The linguistic construction of “maintenance work,” in turn, must recognize that the Act defines “maintenance work” as a subset of “repair,” and must be accordingly viewed in this narrow manner.
The Commonwealth Court has further held that “maintenance work” is “the repair of existing facilities, that is, facilities that at some point were operating properly but have now failed to do so.” Read more
A recent federal court decision rescinding a $17.8 million bridge painting contract award to the second low bidder ripped the cover off Delaware River Port Authority (DRPA) procurement practices that were “shrouded in mystery and obscured from public scrutiny.” Although applying New Jersey law, the reasons underlying the decision of Judge Noel L. Hillman of the U.S. District Court for New Jersey are equally applicable to Pennsylvania bidding disputes.
In May 2016, the DRPA issued a bid for a painting contract for the Commodore Barry Bridge. Seven bids were received. Alpha Painting & Construction Company was the low bidder, with a price of $17,886,000; Corcon, Inc., was second with a price just $10,200 higher. Six weeks later, the DRPA rejected Alpha’s bid as “not responsible” for two reasons: Alpha’s bid was missing OSHA 300 forms, and Alpha did not have reported EMF (experience modification factors) scores that reflect a contractor’s workers’ compensation experience on prior jobs. The DRPA then awarded the contract to Corcon.
After the DRPA denied Alpha’s protest, Alpha sued the DRPA for an injunction rescinding the award to Corcon and ordering an award to Alpha. After three days of testimony, Judge Hillman determined that the DRPA’s stated reasons for the rejection of Alpha’s bid were arbitrary and capricious, and ordered the DRPA to award the contract to Alpha. Read more
I am happy to report that PA Public Contracts has been selected to compete in The Expert Institute’s Best Legal Blog Competition. From a field of hundreds of potential nominees, PA Public Contracts has received enough nominations to join the one of the largest competitions for legal blog writing online today.
Now that the blogs have been nominated and placed into their respective categories, it is up to their readers to select the very best. With an open voting format that allows participants one vote per blog, the competition will be a true test of the dedication of each blog’s existing readers, while also giving up-and-coming players in the legal blogging space exposure to a wider audience. Each blog will compete for rank within its category, while the three blogs that receive the most votes in any category will be crowned overall winners.
The competition will run from now until the close of voting at 12:00 am on November 14, 2016, at which point the votes will be tallied and the winners announced.
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Recently I was asked, what rules govern competitive bidding? There are many different rules that govern public bidding in Pennsylvania, many of which can be found in the Commonwealth Procurement Code. Some govern the timing of bid awards and withdrawal of bids.
The primary “unwritten” rule of public bidding is the “level playing field” rule. This rule means that all bidders are treated the same, and are judged by a common standard that governs all bids that are received. A common standard implies universal specifications, freely accessible to all bidders, and not written in favor of a single bidder. The level playing field is violated where the public owner applies a different standard to the bids it receives, or awards a contract based upon unpublished or unadvertised standards, or otherwise deviates from the published bid instructions and bidding requirements. Read more
Starting this fall, in a move to make bidding more efficient and competitive, the City of Philadelphia will begin to accept electronic bids and contract proposals. Philadelphia officials hope to make all aspects of City contracting electronic-based – from vendor registration to bids and even contract signatures. The change will affect contracts for public works, contracts for non-professional services, and contracts for goods and equipment. Contracts for professional services contracts are already subject to e-bidding. Contractors who wish to bid for City contracts must register for the new program.
The new PHLContracts website can be found here.
Contractors can find registration information here.
An FAQ on the new program can be found here.
An article in The Philadelphia Inquirer on the new program can be found here.
If a public owner breaches its payment obligations to a public contractor and acts in bad faith in doing so, is the public contractor automatically entitled to an award of its attorney’s fees and a 1% penalty under section 3935 of the Procurement Code?
In a recently published opinion, the Supreme Court of Pennsylvania has ruled that such an award is discretionary, not automatic, reversing a 2014 Commonwealth Court decision which had held that a bad faith finding entitled the contractor to recover its attorney’s fees and the 1% penalty. Read more
If a public owner mandates that all bidders use PennBid, an electronic bidding system used by public owners in Pennsylvania, for receipt and tabulation of their bid prices, but also inexplicably requires each bidder to write out its base bid price in words and numbers, what bid form controls? The PennBid tabulation, or the handwritten bid form?
Suppose the PennBid tabulated base bid price is $100,000, but the bidder writes out $100,001? Which is the controlling bid price? Why, for that matter, would any public owner require two forms of bid pricing which only invites confusion and the possibility of conflicting prices?
In a recent, unreported decision, the Commonwealth Court of Pennsylvania affirmed the dismissal by the Board of Claims (Board) of a late-filed contractor claim. Under the Board’s jurisdictional statute, 62 Pa. C.S. § 1712.1(e), a formal statement of claim must be filed with the Board, either within 15 days of the mailing date of a final determination denying a claim, or within 135 days of the filing of a claim, whichever occurs first. Read more
In a departure from the usual rule, but not surprising given the facts of the case, the Commonwealth Court of Pennsylvania recently enforced a subcontractor’s claim for payment against a public owner.
In 2009, West Allegheny School District terminated Flaherty Mechanical Contractors, LLC, the prime contractor on a school alterations project, for failure to pay various subcontractors. After the termination, to prevent further delay, the school district asked F. Zacherl, Inc., the sheet metal subcontractor, to return to the project and complete the work remaining under its subcontract with Flaherty.
Zacherl orally agreed with school district, provided it was paid its then outstanding invoices. These invoices were paid, and Zacherl completed its work, but the school district made no further payments for either the work Zacherl had performed for Flaherty or the work Zacherl performed for the school district. Zacherl sued Flaherty’s surety and the school district for payment. The trial found in favor of Zacherl, with the surety liable for payment for Zacherl’s work for Flaherty, and the school district liable for Zacherl’s work for the school district. The school district appealed. Read more
According to recent audits conducted by the Pa. Department of the Auditor General, Pennsylvania school districts spent at least $53.7 million in excess of the state’s transportation reimbursement formula through the use of no-bid busing contracts.
The conclusion of the Auditor General was based on audits of about 450 of the state’s 500 public school districts. As a result, Auditor General Eugene DePasquale called on the Pa. General Assembly to mandate competitive bidding for such transportation services, saying:
To get the best possible price and ensure transparency for taxpayers, student transportation contracts should be re-bid every time they are up for renewal. I’m calling on the General Assembly to enact legislation to ensure school districts are getting the best possible price by requiring them to seek competitive bids for transportation services. Amending the Public School Code to require schools to competitively bid transportation services will improve transparency and could put more money in our classrooms.
The Auditor General press release issued on May 12, 2016, can be found here. A PennLive story on the Auditor General’s findings can be found here.