Pa. Board of Claims Retains Exclusive Jurisdiction For State Contract Claims

I recently posted about a not-so-recent December 2011 decision in Scientific Games International Inc. v. Commonwealth of Pa., Department of Revenue, where the Pa. Commonwealth Court held that it had original jurisdiction to hear state contract claims seeking non-monetary relief. Well, it turns out that the Commonwealth Court was wrong. So, forget everything I wrote.

In a decision issued on March 25, 2013, the Supreme Court of Pennsylvania reversed the Commonwealth Court and held that claims arising from state contracts can be brought only in the Pa. Board of Claims. In its decision, the Supreme Court wrote that:

… we conclude that the Commonwealth Court erred in interpreting Section 1724(d) [of the Procurement Code] so broadly as to sanction original-jurisdiction actions in a judicial tribunal over nonmonetary claims against the Commonwealth.

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On account of the doctrine of sovereign immunity, however, contractors, bidders, and offerors have limited recourse and remedies. Relative to controversies in matters arising from procurement contracts with Commonwealth agencies, the Board of Claims retains exclusive jurisdiction (subject to all jurisdictional prerequisites), which is not to be supplanted by a court of law through an exercise of original jurisdiction.

The full Supreme Court decision can be found here. The factual background for the Court’s decision can be found in my earlier post.

Posted on April 2, 2013 by Christopher I. McCabe, Esq. in Board of Claims, Court Decisions, Procurement Code Comments Off

Bid Protests 101: Standing and Timing

This is the first in a series of posts on bid protests in Pennsylvania. This post covers standing – who can file a bid protest – and when the protest must be filed.

For contracts awarded by a local entity, such as a township or a school district, a bid protest can be filed in Common Pleas Court only by a taxpayer of the entity awarding the contract. A disappointed bidder, who is not also a taxpayer, cannot file a bid protest with the Common Pleas Court. This rule of standing stems from the bedrock principle that the bidding laws are for the benefit of the public and taxpayers at large, and are not for the benefit of individual bidders. A bid protest on a local contract should be filed as soon as possible after the basis for the protest becomes known. If the contract has been awarded by the local entity, the bidder receiving an award of the contract must be named in the bid protest lawsuit.

For state contracts, the Pa. Procurement Code, at 62 Pa.C.S. § 1711.1, specifies that a bidder or prospective bidder who is “aggrieved in connection with the solicitation or award of a contract” may protest to the head of the purchasing agency in writing. A bid protest on a state contract must be filed within seven days after the bidder knew or should have known of the facts giving rise to the protest. If the protestant is a prospective bidder, the protest must be filed prior to the bid opening. In no event can a protest be filed later than seven days after the date the contract has been awarded. If a taxpayer wants to file a bid protest on a state contract, it can do so, but only by filing suit in the Commonwealth Court.

Bid protests can cover all aspects of the bidding process. Some of my later posts will cover potential areas for bid protests.

Posted on March 28, 2013 by Christopher I. McCabe, Esq. in Bid Protests Comments Off

Disappointed Bidder On State Contract Has No Due Process Rights

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.

Posted on March 5, 2013 by Christopher I. McCabe, Esq. in Bid Protests, Court Decisions, DGS Comments Off

DGS Publishes List of Exempt Steel Products

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.

Posted on February 19, 2013 by Christopher I. McCabe, Esq. in DGS, Steel Products Act Comments Off

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

[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.