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

Steel Products Act

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

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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 so-called “basis of design.” No domestic cast iron boilers were permitted under the boiler specification. Is this practice legal under the PA Steel Products Procurement Act? Can a public owner simply override the Steel Act with a proprietary specification for a name-brand product which is made outside the U.S. but which is preferred by the owner’s design team? Read more

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

DGS Issues List Of Exempt Steel Products For 2017

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The Pennsylvania Department of General Services (DGS) has finally issued the list of machinery and equipment steel products which will be exempt for calendar year 2017 under the PA Steel Products Procurement Act.  The list was published in the Pa. Bulletin on Saturday, May 13, 2017, and can be found here.  New items on the list are noted. The 30-day comment period has now expired. Read more

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

Pa. Steel Products Procurement Act, Revisited

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The Pa. Steel Products Procurement Act became law in 1978 with a stated purpose to protect the U.S. market for steel production and supply.

At its core, the Act provides that, if any steel products are to be used or supplied on a public works project in Pennsylvania, then only “steel products,” as that term is defined in the Act, can be used or supplied on the project.

The Act defines “steel products” as follows:

Products rolled, formed, shaped, drawn, extruded, forged, cast, fabricated or otherwise similarly processed, or processed by a combination of two or more of such operations, from steel made in the United States by the open hearth, basic oxygen, electric furnace, Bessemer or other steel making process and shall include cast iron products and shall include machinery and equipment listed in United States Department of Commerce Standard Industrial Classification 25 (furniture and fixture), 35 (machinery, except electrical) and 37 (transportation equipment) and made of, fabricated from, or containing steel components. If a product contains both foreign and United States steel, such product shall be determined to be a United States steel product only if at least 75% of the cost of the articles, materials and supplies have been mined, produced or manufactured, as the case may be, in the United States. Transportation equipment shall be determined to be a United States steel product if it complies with section 165 of Public Law 97-424 (96 Stat. 2136).

So, what does this mean?

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Posted on by Christopher I. McCabe, Esq. in Steel Products Act 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.

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

DGS Issues 2014 List Of Exempt Steel Products

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The Pennsylvania Department of General Services has issued its annual list of machinery and equipment steel products which are exempt under the Pa. Steel Products Procurement Act.  The list for 2014 can be found here.

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

Ryco Steel Products Procurement Act Lawsuit Settled For $429,000

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In December 2013, the Pa. Attorney General’s Office announced a settlement of the Pa. Steel Products Procurement Act lawsuit with the McKeesport-based Ryco companies and their owners.  The firm and its owners will pay $429,000 to settle the lawsuit, and must comply with a seven-year injunction to guarantee that violations of the Steel Act do not occur again.

The official AG press release can be found here.

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

Pa. Steel Products Procurement Act Applies To Work Contracted By Private Non-Profit Foundation

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Does the Pa. Steel Products Procurement Act apply to a project undertaken by a private non-profit entity for a university under the Pennsylvania State System of Higher Education?  According to a recent decision by the Commonwealth Court in the enforcement lawsuit brought by the Pa. Attorney General’s Office against various Ryco, Inc., entities (see my earlier post here about that lawsuit), the answer is yes.

In an opinion filed February 21, 2013, in the Ryco case, in response to objections raised by the Ryco entities, the Commonwealth Court (Judge Colins) has held that the Steel Act does apply to a student housing project undertaken for Indiana University of Pennsylvania (IUP) by the Foundation for the Indiana University of Pennsylvania (Foundation), a non-profit foundation affiliated with IUP.

The Ryco entities had argued that the Foundation was not a “public agency,” that the housing project was not funded with public money, and that the housing project was not bid as public contracts.  In rejecting these arguments, the Commonwealth Court noted that the Steel Act does not require the owner to be a public agency, only that the project be a public work.  Here, there was no legal question, in the Court’s view, that the student housing project was a public work.

The Commonwealth Court also noted that the Foundation itself was in fact a “public agency” under the Steel Act.  The Foundation was created to promote educational purposes, including for the construction of buildings for IUP.  The Foundation had been engaged by IUP to finance and construct the student housing project.  The Court borrowed from caselaw interpreting the Prevailing Wage Act in finding that, under these facts, the Foundation was a “public agency” for purposes of application of the Steel Act.  In the analagous Prevailing Wage Act case, the Court had held that a private, non-profit corporation created by a county for the purpose of building and operating a nursing home was a “public body.”

The lesson here for contractors working on what are potentially public works projects is to understand the full nature of project they are working on (even if they have only a small part of the project) and to think about the ultimate user/owner of the project.  Here, it seems quite obvious that student housing for a state university has all of the hallmarks of a public works project to which the Steel Act would typically apply.

The Commonwealth Court’s decision can be found here.  A later ruling by the Commonwealth Court in the same Ryco case re-affirmed that the Court’s holdings were as a matter of law, and precluded any further defense by the Ryco entities that the Steel Act did not apply to the student housing project.  That later decision can be found here.

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Posted on by Christopher I. McCabe, Esq. in Court Decisions, Steel Products Act 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

New Law Directs DGS To Prepare List Of Products Exempt Under Steel Procurement Act

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On October 25, 2012, Governor Tom Corbett signed HB 1840 which amends the Pa. Steel Products Procurement Act (first passed in 1978) and which directs the Pa. Department of General Services (DGS) to prepare a list of steel products, such as machinery and equipment, that are not produced in the United States in sufficient quantities and that are therefore exempt from the provision in the Act that local governments purchase steel products manufactured only in the United States.

Once prepared and publicly accessible via the internet, contractors, subcontractors, suppliers, bidders, and public agencies will be able to rely upon the list in preparing bids and entering into contracts. The list of exempt machinery and equipment is to be updated annually on a date selected by DGS.  In addition, prior to publication on its website, and in each subsequent year, DGS must publish the list in the Pennsylvania Bulletin and provide for a 30-day public comment period. DGS is also required, via a statement of policy, to establish a process for creating the list and resolving disputes with respect to items on the list raised during the public comment period prior to the publication on its website.

This new law is sure to be welcomed by contractors and suppliers as it will eliminate uncertainty in bidding and will reduce disputes over whether certain steel products are produced in sufficient quantities in the United States.

HB 1840 takes effect in 60 days and can be found here.

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

Pa. Attorney General Sues Public Contractor for Violation of Pa. Steel Products Procurement Act

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As I noted in my recent post on the Pa. Steel Products Procurement Act, and as evidenced by recent enforcement action by the Pennsylvania Attorney General, the Act remains as relevant today as when it was first enacted in 1978.

On August 2, 2012, the Pennsylvania Attorney General filed suit against Ryco, Inc., and related Ryco businesses, claiming that they used hundreds of fittings made with foreign steel in fire sprinkler systems installed on a pubic works project at Indiana University of Pennsylvania and a public works project at the Blairsville-Saltsburg School District.  The suit also names individual officers, owners, and directors of the Ryco businesses.

The official press release announcing the lawsuit noted that the Attorney General’s investigation into the possible use of lower-cost foreign steel products on Pennsylvania public works projects is “active and ongoing.”  The lawsuit asks the Commonwealth Court to order civil penalties of up to $1,000 for each violation and other relief, along with recovery of any payments that were made to Ryco under the contracts and the cost of the investigation.  In addition, the lawsuit seeks to prohibit Ryco and the other defendants from submitting bids or supplying materials to any public agency in Pennsylvania or on any state contract for a five year period.

The lawsuit against Ryco is proof positive that the Act is alive and well, and that public contractors supplying steel on public works projects in Pennsylvania, and the owners of these companies, must be extremely careful to know and comply with the Act’s requirements.  The failure to do so could result in drastic penalties not only for the companies but for the owners themselves.

The official press release can be found here.

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