PA Public Contracts Quoted In The Philadelphia Inquirer

I’m happy to report that PA Public Contracts was quoted today by business reporter Joseph N. DiStefano in his Philly Deals column in the business section of The Philadelphia Inquirer.

The column, “Is state in the clear in loan dispute?”, discusses the Telwell, Inc. v. PSERS Board of Claims decision which I blogged about here. The Inquirer article can be found here (a subscription may be required) or here.

Posted on January 27, 2014 by Christopher I. McCabe, Esq. in General Comments Off

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

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.

Posted on January 16, 2014 by Christopher I. McCabe, Esq. in Steel Products Act Comments Off

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

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.

Posted on January 14, 2014 by Christopher I. McCabe, Esq. in Court Decisions, Steel Products Act Comments Off

Bid Protests 101: Grounds For The Protest

This is the another in a series of posts on bid protests in Pennsylvania. This post covers the potential grounds for the bid protest.

Based on my experience, there are two primary potential bases for a bid protest. The first concerns a bid’s responsivesness or whether the bid is complete and responsive to the bidding instructions. The second concerns a bidder’s responsibililty or qualifications.

A challenge that a bid is non-responsive will likely be successful if the challenged bid (which has been accepted by the public entity) is materially defective in some way. Is it missing a required form? Are there prices missing? Did the bidder fail to sign its bid? If the protesting taxpayer can show that the winning bid is “defective” in some way, courts will be receptive to a challenge to the award. This type of protest is appealing as it raises the question of an unlevel playing field which is a bedrock principle of public contracting. On the other hand, if the public entity has rejected a bid because it is non-responsive, it is unlikely that a protest by the rejected bidder will be unsuccessful. A court will be extremely hesitant to overrule a finding that the bid is defective.

A challenge to a bidder’s responsibility is difficult to win. Normally, whether a bidder is qualified (responsible) to perform a contract is left to the sound discretion of the public officials. A court will normally err on the side of allowing the public entity to decide these questions on its own. On the other hand, if the public entity has excluded a bidder from the bid, either as part of a pre-qualification process, or an ad hoc basis, on grounds that the bidder is “unqualified,” the disqualified and excluded bidder will have a good chance of success if the bidder can show that it is as qualified as the other permitted bidders, or if the criteria under which the bidder is excluded are unpublished or unevenly applied. Excluding bidders from the bidding process is counter to the notion of competition. The more bidders there are, the better the price will be for the taxpayers.

Besides these two primary bases, a bid protest can raise other aspects of the bid process that were irregular or were not in conformance with the bidding instructions. Did the bid comply with minority contracting requirements? Did a bidder has some sort of advantage over other bidders?

As always, it is advisable to consult with experienced counsel before proceeding with a bid protest.

Posted on December 10, 2013 by Christopher I. McCabe, Esq. in Bid Protests Comments Off

Pennsylvania Bar Institute Sponsors CLE Primer On Mechanics’ Liens And Bond Claims

On Thursday, December 5, 2013, the Pennsylvania Bar Institute (PBI) is sponsoring a continuing legal education course entitled “Primer on Mechanics’ Liens and Bond Claims.”

I will be a presenter, and I am looking forwarding to sharing my knowledge and experiences on the topic of bonds and bond claims on public construction projects in Pennsylvania.

The flyer on the PBI CLE course can be found here.