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

Public Bidding 101: Responsiveness

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This post is one in a continuing series on the basics of public bidding in Pennsylvania.  The topic of this post is “responsiveness.”

The term “responsiveness” refers to whether a bid is compliant with the requirements specified in the invitation to bid.  For a public bid to be accepted, it must be “responsive” to the bidding instructions, meaning that it must satisfy the mandatory terms, conditions, and instructions contained in the bid invitation.  If a bid fails to adhere to the mandatory bidding requirements, the bid is considered “non-responsive.”

Mandatory compliance with bidding instructions guarantees that contract awards will be made fairly and economically.   First, with clear-cut ground rules for vendor competition, none of the bidders will obtain an unfair advantage from a special knowledge of the bidding requirements.  Second, the principle of strict adherence to the bid instructions reduces the possibility of fraud or favoritism in favor of one bidder over another.

Examples of non-responsive bids are those that are missing critical pricing information, or an authorized signature of the bidder.  A non-responsive bid may be missing a bid bond, may contain a counter-offer that deviates from the specifications of the bid, or may be missing a required form, such as a signed addendum.  A determination that a bid is non-responsive is typically final and is normally not subject to any review or administrative appeal by the rejected bidder.  The concept of bid responsiveness was noted and explained in Nielson v. Womer, 46 Pa. Cmwlth. 283, 406 A.2d 1169, 1171 (1979).

Whether a bid which is non-responsive can nonetheless be accepted by waiving the bid defect was addressed in my earlier post on the “Hall of Fame” decision in Gaeta v. Ridley School District.

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Posted on by Christopher I. McCabe, Esq. in Bid Responsiveness, Public Bidding 101 Leave a comment

OEO Changes Policy on City Contracts for Non-Stocking M/W/DSBE Suppliers

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After long treating M/W/DSBE supply firms the same as M/W/DSBE subcontractors, and giving City contractors 100% credit for the use of M/W/DSBE supply firms, the City of Philadelphia Office of Economic Opportunity has now changed its tune.  Apparently, the OEO will no longer give full credit for use of an M/W/DSBE supply firm, unless the firm is a “stocking” supplier, meaning that it actually has in stock the supplies which it plans to furnish to the prime contractor on the City contract.

The new policy was reported in The Philadelphia Tribune in February.  Angela Dowd-Burton, Executive Director of the OEO, was quoted in the Tribune article as follows:

“They [the M/W/DSBE] don’t have the inventory, and the probability is they’re just picking up the phone and collecting a fee…So, we’ve decided that whatever commission you get from making that call, that’s the only participation we’re going to report on.”

“Contractors will ultimately have to find participation from minority- and women-owned businesses that actually hire people and use contractors that do work, as opposed to someone that is providing more of a clerical function.”

The new OEO policy will undoubtedly affect many M/W/DSBE supply firms, as it is rare that any supplier will have in stock all of the needed supplies for a construction project.  Where custom or special order equipment is involved, as is the case on many public works projects, it is unlikely that any supplier will have the equipment in stock.

The OEO is reportedly encouraging the use of subcontractors for the ordering of construction supplies.  It is hard to see how this makes any difference, however, as it is unlikely that a subcontractor will have in stock the supplies that the supply firm does not.

As for City contractors, they must now pay greater attention to the firms that they propose to meet the City’s M/W/DSBE contracting goals. If those firms are suppliers, and not working subcontractors, the City contractor may need to think twice before using the supply firm to avoid risking disqualification for failure to meet the City’s contracting goals, or seek clarification from the OEO before submitting a bid.

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

City Issues FY2012 1st Quarter Report for M/W/DSBE Contracting

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In January 2012, the City’s Office of Economic Opportunity issued its First Quarter Report for Fiscal Year 2012 for contracting activity by minority, woman, and disabled-owned business enterprises (M/W/DSBEs) on City and City-related contracts.  The report can be found here.

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

Failure to Submit Proper Consent of Surety Is Non-Waiveable Bid Defect

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In a recent decision, Dragani v. Borough of Ambler, 37 A.3d 27 (2012), the Commonwealth Court of Pennsylvania has ruled that a bid for a borough waste collection contract contained a non-waiveable defect where the bidder failed to include a proper consent of surety from a surety with an at least $20 million of underwriting authority, as per the bid instructions.

While the Court in Dragani recognized that the Supreme Court’s decision in Gaeta granted municipalities more leeway in waiving apparent defects, the Court declined to find that the defect was waiveable under the Gaeta decision.  Instead, the Court held that the borough’s instructions were unambiguous and removed any discretion to waive the consent of surety requirement.  The Court followed its decision in Glasgow v. Pennsylvania Department of Transportation, 851 A.2d 1014 (Pa. Cmwlth. 2004), where it held that, if a defect involves the waiver of a mandatory requirement that the bid specifications treat as non-waiveable, then the defect cannot be waived.

One concern, not explored in the Court’s opnion, is whether the underwriting authority limitation could serve in future bids as a means to disqualify an otherwise qualified bidder whose surety happens not to meet the $20 million threshold, without any real benefit for the municipality.  In Dragani, the bidder’s surety, Fidelity-Maryland, had $16 million in underwriting authority, but its parent had $571 million in underwriting authority.

Nonetheless, the primary lesson from Dragani is that bidders must pay careful attention to the bid instructions, especially those concerning the bid security.  This lesson cannot be overstated.

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

Public Bidding Hall of Fame: Gaeta v. Ridley School District

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This is one in a series of posts which will highlight significant Pennsylvania court decisions in the area of public bidding and contracts.  The first decision highlighted concerns waiver of bid defects.

In Gaeta v. Ridley School District, 567 Pa. 500, 788 A.2d 363 (2002), the low bidder submitted as bid security a B-rated bid bond, whereas the bid instructions had required an “A-rated” bid bond.  However, the school district waived the apparent bid defect and allowed the bidder to substitute an A-rated bid bond for the B-rated bid bond. The school district’s decision was challenged as a violation of the basic rules of public bidding.

On appeal, the issue was whether the school district could waive the defect in the low bidder’s bid.  The Supreme Court of Pennsylvania rejected the taxpayer challenge, and upheld the bid bond substitution because no competitive advantage was conferred on the low bidder and because the bid bond did not affect the performance of the contract as the bid bond would ultimately be replaced by a performance bond.

In Gaeta, the Supreme Court announced a new test for waiver of bid defects.  Under the test announced in Gaeta, a municipality is permitted to waive a bid defect where the waiver will not deprive the municipality of an assurance that the contract would be entered into, performed, and guaranteed according to its specified requirements, and where the waiver will not place one bidder in a position of advantage over the other bidders or will not otherwise undermine the necessary standard of competition.

The waiver test in Gaeta has been applied in numerous case since Gaeta was decided.

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Posted on by Christopher I. McCabe, Esq. in Court Decisions, Hall of Fame Decisions Leave a comment