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

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 Read more

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

Bid Protests

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

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

Third Circuit Affirms Decision On DRPA Bridge Contract But Reverses Judicial Award Of Contract To Low Bidder

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The U.S. Court of Appeals for the Third Circuit recently affirmed a N.J. federal district court decision which found that that the Delaware River Port Authority (DRPA) had acted improperly in rejecting the low bidder for a painting contract for the Commodore Barry Bridge. My original post on the DRPA case can be found here.

In 2016, the DRPA rejected Alpha Painting & Construction Company, Inc.’s low bid and awarded the contract to Corcon, Inc., the second low bidder.  After its protest was denied, Alpha sued the DRPA to rescind the award to Corcon. The district court found that the DRPA’s actions were arbitrary and capricious, and ordered the DRPA to award the contract to Alpha. The DRPA appealed.

On appeal, the Third Circuit agreed with the district court, finding in a lengthy opinion that the DRPA’s decision to reject the low bidder was irrational, arbitrary, and capricious.  However, the Third Circuit held that district court went too far in directing the DRPA to award the contract to Alpha. Instead, the Third Circuit remanded the case for entry of a more limited injunction, stating:

Here, DRPA arbitrarily removed Alpha from contention for the Phase 2 contract. Accordingly, Alpha should be restored to competition and DRPA should evaluate Alpha’s bid and affirmatively determine, per its guidelines, whether Alpha, the lowest bidder, is a “responsible” contractor.

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

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

Bad Faith Finding Does Not Mandate Award Of Attorney Fees And 1% Penalty

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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

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Posted on by Christopher I. McCabe, Esq. in Court Decisions, Procurement Code, Public Works Payment Rules Leave a comment

Oral Promise To Pay Subcontractor Ruled Enforceable Against School District

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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

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

Procurement Code Protest Allowed Where Late Filing Was Due To Extraordinary Circumstances

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Under the Pa. Procurement Code, a 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. Recently, in a published opinion and in a departure from the usual rule, the Commonwealth Court decided that equitable principles would allow a late-filed protest to be considered.

The case concerned Pa. Department of Transportation (PennDOT) inspection contracts on which Bureau Veritas (BV), the protestant, had submitted a statement of interest.  PennDOT ranked BV fifth in its statement of rankings.  BV learned of the rankings on November 13, 2014.  Seven days later, on November 20, 2014, BV filed a protest, but the email of its protest was rejected by PennDOT’s computer server due to improper formatting of the file attachment.  On November 21, 2014, BV learned of the email rejection and promptly re-sent the email with the proper formatting of the file attachment, eight days after the publication of the rankings.  PennDOT rejected BV’s protest as untimely and on the merits.  BV then argued that it should be allowed to file its protest nunc pro tunc (literally, “now for then”). PennDOT issued a final determination rejecting the protest, as well as the request that the protest be considered nunc pro tunc.  BV appealed to the Commonwealth Court. Read more

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

Contractor & Subcontractor Payment Act Does Not Apply To Public Projects In Pennsylvania

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In a recent decision, the Supreme Court of Pennsylvania has held that the Pa. Contractor and Subcontractor Payment Act (“CASPA”) does not apply to a construction project where the owner is a governmental entity.  CASPA is a Pennsylvania statute governing payments to contractors and subcontractors on construction projects located in Pennsylvania.  CASPA typically applies to private development projects, whereas the Pa. Procurement Code’s Prompt Pay Schedules apply to state or local public works projects.

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Posted on by Christopher I. McCabe, Esq. in Court Decisions, Public Works Payment Rules Leave a comment

Participation By Awardee In Bid Protest Hearing Not Improper Under Procurement Code

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In two, not-so-recent decisions involving bid protests filed under the Pa. Procurement Code, the Commonwealth Court of Pennsylvania has held that it was not improper to allow the awarded vendor to actively participate in the protests.

In the two cases, the aggrieved bidders filed protests with the Pa. Department of Corrections challenging awards for a contract for a secure telephone system for inmates housed at Department facilities.  In each case, the Secretary permitted the contract awardee to participate in the bid protest.  In one protest, the awardee was permitted to file a reply to the bid protest.

On appeal, the bidders argued in each case that the contract awardee’s participation in the protest and hearing was unlawful because, under section 1711.1 of the Procurement Code, the only proper parties to a protest are the protestant and the contracting officer, and the awardee may not participate because, under the statute, it is not an enumerated party to a protest.

The Commonwealth Court flatly rejected this argument, finding that there was no abuse of discretion in allowing the contract awardee to participate in the protest. This decision makes perfect sense.  The Procurement Code itself, at section 1711.1(e), provides that the person deciding the protest “may request and review such additional documents or information he deems necessary to render a decision and may, at his sole discretion, conduct a hearing.”  This could certainly include information from the vendor who has been awarded the contract.  In addition, as the Court noted, the Department of General Service’s Procurement Handbook permits such participation where “substantial issues are raised by the protest.”  Furthermore, by comparison, in an equity action filed to protest and enjoin a local contract award, the contract awardee is deemed to be an indispensable party and must be included in the proceeding.

So, if you intend to protest a bid or contract award under the Procurement Code, you are hereby forewarned: be prepared to fend off arguments by both the agency soliciting your bid and the entity who has been awarded the contract.

The two Commonwealth Court decisions can be found here and here.

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