Is The Separations Act In Danger Of Repeal?

In Pennsylvania, public construction projects are nearly always governed by the Separations Act, a law that was passed in 1913, more than 100 years ago. The Separations Act (variations of which also appear in statutes governing Boroughs, Townships, and other Read more

Philadelphia Voters Approve Best Value Contracting

It's official! Philadelphia voters have voted in favor of the best value ballot question. The Philadelphia City Charter will now be amended to add the following new subsection at section 8-200: (5) In lieu of awarding a contract to the lowest responsible bidder, the Read more

Committee of Seventy Throws Its Weight Behind City Of Philadelphia Best Value Initiative

On Tuesday, May 16, Philadelphia voters will be asked to vote YES or NO to the following ballot question: “Shall The Philadelphia Home Rule Charter be amended to allow for the award of certain contracts based on best value to the City?" The Read more

Best Value Contracting Question On Philadelphia Primary Election Ballot

Is "best value" the next, best thing in City of Philadelphia procurement? We will all know soon enough.  The best value initiative is on the official election ballot for the upcoming Philadelphia primary election. On May 16, 2017, voters in Philadelphia Read more

E-Verify, Revisited

The Pennsylvania Public Works Employment Verification - Act 127 of 2012 but better known as E-verify - has now been the law in Pennsylvania for more than four years, since January 1, 2013. E-verify requires that all public works contractors and subcontractors must utilize the Read more

DGS

E-Verify, Revisited

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The Pennsylvania Public Works Employment Verification – Act 127 of 2012 but better known as E-verify – has now been the law in Pennsylvania for more than four years, since January 1, 2013.

E-verify requires that all public works contractors and subcontractors must utilize the federal government’s E-Verify system to ensure that all employees performing work on public works projects are authorized to work in the United States.

Prime contractors are cautioned that the Pa. Department of General Services continues to enforce the requirements of E-verify, as is evident from the formal notices posted on the DGS E-verify webpage.  For example, in 2016, more than 50 contractors received warning letters concerning violations of E-verify.

Prime contractors are also cautioned that they must inform their subcontractors of their duty to comply with E-verify.  If they do this, then prime contractors will not liable for a subcontractor’s failure to comply with E-verify.

DGS has also posted an FAQ for E-verify. This can be found here.  My original post on E-verify can be found here.

If you need assistance on an E-verify issue, 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 DGS, E-Verify Leave a comment

Commonwealth Court Affirms Dismissal Of Late-Filed Claim With The Board Of Claims

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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

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Posted on by Christopher I. McCabe, Esq. in Board of Claims, DGS Leave a comment

Executive Order Prohibits Discrimination On The Basis Of Sexual Orientation Or Gender Identity Or Expression By Contractors Doing Business With State

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On April 7, 2016, Pa. Governor Tom Wolf signed a new Executive Order establishing that future Commonwealth of Pennsylvania contracts must ensure that contractors doing business with the state will not discriminate in the award of subcontracts or supply contracts, or in hiring, promotion, or other labor matters, on the basis of sexual orientation, or gender identity or expression. The Executive Order also mandates that contractors receiving state funds must have, as a condition of payment, a written sexual harassment policy and that employees of the contractor are aware of the policy. Read more

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

DGS Issues Preliminary List Of Exempt Steel Products For 2016

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The Pennsylvania Department of General Services (DGS) has issued a preliminary and updated list of machinery and equipment steel products which will be exempt under the Pa. Steel Products Procurement Act for 2016.  The list was published in the Pa. Bulletin on Saturday, February 6, 2016, and can be found here.

Read more

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

Gov. Tom Wolf Signs Executive Order To Improve Participation Of Small & Diverse Businesses

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On September 23, 2015, Pennsylvania Governor Tom Wolf signed an Executive Order solidifying his commitment to improving the participation of minority-owned, women-owned, LGBT-owned, veteran-owned, and disabled-owned businesses in state government contracting.

According to the official press release, Executive Order 2015-11, entitled “Diversity, Inclusion, and Small Business Opportunities in State Contracting and Pennsylvania’s Economy,”

directs a consistent and coordinated effort to ensure diversity and inclusion in all contracting opportunities for small and diverse businesses throughout agencies under the governor’s jurisdiction and promotes the creation of programs to better prepare those businesses to compete and succeed in Pennsylvania’s economy.

Read more

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

Continuing Pa. Budget Impasse Affects Payments To Contractors

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The current Pennsylvania budget impasse is now entering its fifth month.  How does the impasse and the lack of a state budget affect vendors and contractors holding contracts with the Commonwealth of Pennsylvania and its departments, boards and agencies?

According to the FAQ webpage of the Office of the Budget, the following questions and answers address payments to vendors and contractors and future contracts:

Question 9: Will Commonwealth agencies process invoices from vendors?

Answer: Yes. Vendors with state contracts who continue to provide goods and services to commonwealth agencies can submit invoices and Commonwealth agencies will process all invoices received. All invoices held during the budget impasse will be sent promptly to the State Treasury for processing after the FY15-16 budget is enacted.

Question 10: How will the budget impasse affect existing contracts?

Answer: Most state contracts include language addressing this situation, which states that the commonwealth’s obligation to make payments shall be subject to the availability and appropriation of funds and that contractors may not stop work or refuse to make delivery because of non-payment. If the Commonwealth’s untimely payment results in a default situation, the contractor may pursue the remedies set forth in the contract.

Question 11: Can Commonwealth agencies enter into new contracts for 2015-16?

Answer: Agencies may enter into new contracts for FY 2015-16. The contracts will clearly state that payment is subject to appropriation.

The takeaway here is that vendors and contractors doing business with a public entity like the Commonwealth of Pennsylvania should never forget that public contracts are unlike private contracts in many ways, not the least of which is that the payment obligations of the public entity are nearly always subject to legislative appropriation of the funds necessary for payment. So, while payment may be delayed due to non-appropriation, the obligation to perform the work covered by the contract continues even in the face of non-payment.

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Posted on by Christopher I. McCabe, Esq. in DGS, General Leave a comment

Disappointed Bidder On State Contract Has No Due Process Rights

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In a recent, unreported decision concerning a bid protest for a state contract, the Pa. Commonwealth Court reaffirmed its position that a disappointed bidder for a state contract has no due process rights in connection with the award of the contract.  Therefore, the bidder has no right to a hearing on its bid protest.  Instead, the bidder has only those protest rights enumerated in the Pa. Procurement Code.  The Court ruled that a prior decision finding due process rights was expressly overruled by later enacted legislative amendments to the Procurement Code.

The Commonwealth Court also held that it was proper for the winning bidder to participate in the bid protest.

The Court’s full decision, in Corizon Health, Inc. v. Department of General Services, can be found here.

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

DGS Publishes List of Exempt Steel Products

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On February 9, 2013, the Pa. Department of General Services finally published in the Pa. Bulletin a list of exempt machinery and equipment steel products, as authorized under section 4(b) of the Steel Products Procurement Act (73 P. S. § 1884(b)).

The DGS notice listing the exempt steel products can be found here.  The DGS statement of policy relating to its notice can be found here.

According to the DGS notice, the public has 30 days to submit comments regarding the list.  Comments can be submitted in writing to: Deputy Secretary for Public Works, Department of General Services, 18th and Herr Streets, Harrisburg, PA 17125. Comments can also be submitted by e-mail to: ra-steel@pa.gov.

My prior post on the amendment to the Steel Products Procurement Act mandating a list of exempt products can be found here.

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

Commonwealth Court Can Hear State Contract Claims For Non-Monetary Relief

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[UPDATE: The case discussed in this post is no longer valid.  The Supreme Court has overruled the Commonwealth Court.]

Despite common misperception, the Pa. Board of Claims is not the exclusive forum for all state contract claims.

In a decision from December 2011, Scientific Games International Inc. v. Commonwealth of Pa., Department of Revenue, the Pa. Commonwealth Court held that it has jurisdiction to hear state contract claims seeking non-monetary relief.  The decision concerned an RFP issued by the Department of General Services (DGS), on which there were two bidders, GTECH, the incumbent contractor, and its competitor, Scientific Games.  Scientific Games was awarded the contract, which it executed (DGS did not execute contract).  GTECH then protested.  The protest was rejected by DGS and was also found to be in bad faith.  Nevertheless, DGS canceled the RFP, stating that the cancelation was in its best interests.

Scientific Games then filed a complaint in the Commonwealth Court, claiming that it had a contract with the state and seeking specific performance of the contract and other non-monetary relief.  DGS filed objections to the complaint, arguing that the Board of Claims had exclusive jurisdiction over state contract claims and that Scientific Games had an adequate administrative remedy.

The Commonwealth Court rejected the arguments of DGS that the Board of Claims has exclusive jurisdiction of all claims arising out of state-issued contracts. The Commonwealth Court relied upon a provision in the Pa. Procurement Code concerning the jurisdiction of the Board of Claims which states: “Nothing in this section shall preclude a party from seeking nonmonetary relief in another forum as provided by law.”  The Commonwealth Court also held that the administrative remedies did not apply as the relief being sought by Scientific Games was non-monetary in nature.

This decision allows state contractors another potential forum for determination of their contract disputes with the state, provided, of course, that the disputes do not seek a monetary payment from the state.

The full court decision can be found here.

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

When A Claim Is Not A Claim

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When is a claim not a claim?  When it’s not.

In K-B Offset Printing, Inc. v. Department of General Services, a not-so-recent unreported decision, the Pa. Commonwealth Court held that a letter sent by a contractor to the Pa. Department of General Services and asserting entitlement to more than $1 million in contract underpayments did not constitute a “claim,” as that term is defined in the Pa. Procurement Code.  As a result, the contractor was barred from pursuing its claim before the Pa. Board of Claims due to its failure to exhaust administrative remedies. (Under the Procurement Code, a contractor must first file a claim with the contracting officer before it can proceed before the Board of Claims, and the claim must be filed within six months of the date it accrues.)

A five-year contract between K-B Offset Printing and the state had expired in May 2011.  An audit by K-B discovered that K-B was entitled to additional compensation, due to contractual price adjustments that were to occur every six months but were never implemented.  In June 2011, K-B sent a letter to DGS demanding the underpayments.  While DGS conceded that it had not made the necessary price adjustments, DGS refused to recognize the K-B claim to additional payments, basing its decision on its belief that K-B’s claims were barred by a six-month statute of limitations.

K-B then filed a claim with the Board of Claims.  DGS objected, claiming that the Board lacked jurisdiction because K-B did not first exhaust its administrative remedies by filing a claim with the contracting officer.  The claim was then dismissed by the Board of Claims.  On appeal, the Commonwealth Court accepted DGS’s argument that K-B’s claim was not ripe because K-B did not first file a claim with the contracting officer before it proceeded with filing its claim with the Board of Claims.  The Commonwealth Court held that K-B’s June 2011 letter was not a “claim,” and that K-B’s claim for the additional payments did not accrue until DGS sent the July 2011 letter which stated that DGS would not make any further payments.  The Court rested its holding on a rule of the Supreme Court that a “claim” does not accrue until a claimant is affirmatively notified that it will not be paid by the Commonwealth.

At first blush, the court’s reasoning appears to be a monumental splitting of hairs. K-B sends a letter to DGS demanding more than $1 million as a matter of right under a contract.  That looks and sounds like a claim.  DGS then sends a letter conceding that it goofed on the pricing adjustments, but refusing to pay any more money to K-B due to a legal technicality.  That looks and sounds like a denial of a claim.  Nonetheless, the Commonwealth Court holds that a “claim” must still be filed with the contracting officer, even if such a claim is identical to the first letter and is doomed to ultimate failure.  However, the first letter was not a claim because at that time DGS had not yet stated that would not pay K-B the underpayments. Until that statement was made by DGS, there was no “claim” that could be filed and pursued.

The moral of the story?  File the paperwork, and dot your i’s and cross your t’s, even if the claim is pre-destined to be rejected and doomed to failure.  The Commonwealth Court has now made it abundently clear that even a pointless gesture must be pursued in order to perfect a claim before the Board of Claims.

The K-B Offset court decision can be found here.  Read it and be forewarned.

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Posted on by Christopher I. McCabe, Esq. in Board of Claims, Court Decisions, DGS, Procurement Code Leave a comment