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

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 Read more

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

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 Read more

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

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 Read more

Are RFQs Immune From Protest Under The Procurement Code?

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. Read more

Pennsylvania Initiates Disparity Study For Small Diverse Business Program

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 Read more

Bid Responsiveness

Federal Judge Criticizes Mystery Procurement Practices Of Delaware River Port Authority

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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

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

Was Bid Non-Conforming Where Use Of PennBid Was Mandatory?

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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?

Read more

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

Commonwealth Court Finds Ambiguity In Bid Spec Creates Bidding Defect Requiring A Re-Bid

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Does an ambiguous bid specification create an unlevel playing field?  The answer has almost always been yes, and a recent Pennsylvania Commonwealth Court decision reiterates that long-standing principle of public bidding law.

In 2011, Allegheny County and the City of Pittsburgh sought bids for a contract to process recyclable materials.  Greenstar Pittsburgh, LLC (Greenstar), a disappointed bidder, brought suit, along with an individual taxpayer, to enjoin the contract award to Pittsburgh Recycling Services (PRS) and to compel issuance of a new bid.  Greenstar argued that language in the bidding specifications was open to more than one reasonable interpretation and provided PRS with an unfair advantage in the bidding process.  The trial court agreed, and determined that the following language in the bid specification was ambiguous:

3.3 QUALIFICATIONS OF BIDDERS

The Contractor’s facility shall be located within a fifteen (15) mile radius from the City’s Department of Public Works . . . located at 30th and A.V.R.R.

The bidding specifications included numerous references to the Contractor’s “processing facility” and a “receiving site.”  As a result, the trial court concluded that Section 3.3 was ambiguous because the word “facility” could reasonably be used to denote either “other receiving site” or the “Contractor’s processing facility.”

On appeal, the Commonwealth Court affirmed the trial court’s decision.  In affirming the trial court, the Commonwealth Court first noted the law governing ambiguity in public bidding specifications:

Our Supreme Court has also recognized that the common standard required to ensure free and fair competition among bidders extends to the form as well as the substance of an invitation to bid for a public contract. In Guthrie v. Armstrong, 303 Pa. 11, 154 A. 33 (1931), the Court concluded that: “The form of the contract is often as vital as anything involved in the transaction, and, unless bidders are on an equality as to knowledge of its proposed provisions, there may be a great advantage to a bidder who has a certain understanding with which the public authorities may agree, over a bidder whose understanding is otherwise.” 303 Pa. at 18, 154 A. at 35. Where a public authority has issued an invitation to bid with provisions subject to more than one reasonable interpretation, while the authority may not have acted in bad faith, the effect may be the same: the common standard is eroded and the public authority can no longer ensure that the public has gained the benefit of fair and just competition among bidders. … As with an ambiguous contract provision, if a provision in bidding specifications is subject to more than one reasonable interpretation, the ambiguous provision must be interpreted against the drafter.

In affirming, the Commonwealth Court agreed that it was reasonable to interpret Section 3.3 to mandate the contractor’s processing facility or the contractor’s other receiving site to be located within the specified 15 mile radius, and concluded that Section 3.3 was ambiguous on its face. Because of this ambiguity, the Commonwealth Court recognized that the pool of bidders interested in participating in the bidding process could be impacted:

We are left to speculate how many potential bidders failed to participate in the bidding process because they did not have the interpretation shared by [Allegheny County and Pittsburgh] and PRS and instead shared the same reasonable interpretation of Section 3.3 made by Greenstar.

The hallmark of public bidding is a level playing field, and ambiguous bid specifications are an inherently unleveling force.  Greenstar recognizes this.  So, if you are a bidder encountering an ambiguous bid specification which can affect, e.g., how you compute your bid price, or whether you are qualified to bid, you have encountered an unlevel playing field.  In such case, it is extremely likely that your bid protest will be successful.

The decision in Greenstar Pittsburgh LLC v. Allegheny County can be found here.

A hat tip to my friend and former colleague Wally Zimolong, Esq., who brought this case to my attention and who also blogged about it at his blog Supplemental Conditions.

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Posted on by Christopher I. McCabe, Esq. in Bid Protests, Bid Responsiveness, Bid Specifications, Court Decisions Leave a comment

Commonwealth Court: Offer to Negotiate Renders Proposal Non-Responsive

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Recently, the Commonwealth Court of Pennsylvania had occasion to reiterate a long-standing rule of public bidding that offering counter-terms in a bid will render the bid non-responsive and will result in rejection of the bid.

In 2011, the Pa. Department of General Services issued an RFP for a design build contract for a power plant to serve a new State Correctional Facility.  The RFP sought competitive, sealed proposals.  Pepco Energy Services, Inc., submitted a proposal in response to the RFP, but stated that it expected to be afforded an opportunity to negotiate the terms of the contract documents.  DGS sought clarification from Pepco regarding its expectation of contract negotiations and further informed Pepco that the contract terms were non-negotiable.  Nonetheless, Pepco restated that it expected to negotiate contract terms.  In response, DGS rejected Pepco’s bid as non-responsive on grounds that it contained “conditional” language.

Pepco filed a protest with DGS asserting that, because contract negotiations were contemplated as part of the RFP process, DGS erred in finding that its proposal was non-responsive.  DGS rejected the protest and Pepco filed an appeal with the Commonwealth Court.

On appeal, DGS argued, in part, that Pepco’s alternate language would have allowed it to negotiate the contract terms, whereas the other prospective proposers submitted their proposals based on an understanding that the contract terms were non-negotiable, thus giving Pepco an unfair advantage, and violating long-standing case law requiring all bidders to be treated equally under a common standard.  The Commonwealth Court upheld the DGS decision, and found that Pepco had no right to negotiate the terms of the contract documents, either before DGS found it to be a responsible bidder, or before DGS made a decision as to which proposal was most advantageous.

The lessons here?  First, in a competitive sealed bidding situation, the contract forms are set in stone and are not subject to further negotiation.  They are issued on a “take it or leave it” basis.  To hold otherwise would undermine the basic rule of a level playing field in public bidding.  Second, read the RFP! If it states that the contract documents are non-negotiable, then they are non-negotiable, no ifs, ands, or buts.  Including a statement that the bidder would like to negotiate the contract terms is only an invitation to be rejected as non-responsive.

The decision in PepcoEnergy Services, Inc. v. Department of General Services can be found here.

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

Public Bidding 101: Responsiveness

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This post is one in a continuing series on the basics of public bidding in Pennsylvania.  The topic of this post is “responsiveness.”

The term “responsiveness” refers to whether a bid is compliant with the requirements specified in the invitation to bid.  For a public bid to be accepted, it must be “responsive” to the bidding instructions, meaning that it must satisfy the mandatory terms, conditions, and instructions contained in the bid invitation.  If a bid fails to adhere to the mandatory bidding requirements, the bid is considered “non-responsive.”

Mandatory compliance with bidding instructions guarantees that contract awards will be made fairly and economically.   First, with clear-cut ground rules for vendor competition, none of the bidders will obtain an unfair advantage from a special knowledge of the bidding requirements.  Second, the principle of strict adherence to the bid instructions reduces the possibility of fraud or favoritism in favor of one bidder over another.

Examples of non-responsive bids are those that are missing critical pricing information, or an authorized signature of the bidder.  A non-responsive bid may be missing a bid bond, may contain a counter-offer that deviates from the specifications of the bid, or may be missing a required form, such as a signed addendum.  A determination that a bid is non-responsive is typically final and is normally not subject to any review or administrative appeal by the rejected bidder.  The concept of bid responsiveness was noted and explained in Nielson v. Womer, 46 Pa. Cmwlth. 283, 406 A.2d 1169, 1171 (1979).

Whether a bid which is non-responsive can nonetheless be accepted by waiving the bid defect was addressed in my earlier post on the “Hall of Fame” decision in Gaeta v. Ridley School District.

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Posted on by Christopher I. McCabe, Esq. in Bid Responsiveness, Public Bidding 101 Leave a comment