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
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
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
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
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.
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
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
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
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
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.