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PA Public Contracts provides legal commentary and insight on issues of public bidding and contracting in Pennsylvania, including topics ranging from the basics of public bidding, bid protests and challenges, to prompt payment rights and remedies, contract awards, and bid withdrawals, and including surety claims, release of retainage, and questions concerning the PA Prevailing Wage Act and the PA Steel Products Procurement Act.
October 2017 S M T W T F S « Sep 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31
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 ballot question is vague and confusing, and fails to inform voters that the City of Philadelphia now awards contracts on the basis of “lowest responsible bid,” a method that many believe already results in “best value” contracting for the City.
Nonetheless, the nonpartisan Committee of Seventy recently announced its support for the ballot question. The Committee of Seventy is not typically thought of as proficient on matters of public procurement, so it formed a task force comprised of Board members “with contracting experience in the public- and private-sector” to study the issue. Read more
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 will be asked to answer “yes” or “no” to the following question: “Shall The Philadelphia Home Rule Charter be amended to allow for the award of certain contracts based on best value to the City?”
If passed by the voters, best value will certainly prove to be a momentous change for Philadelphia procurement, though it remains to be seen just how momentous. Only time will tell.
My original post and thinking on the best value initiative can be found here.
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.
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.
Payment issues dominate the world of the public works contractor in Pennsylvania. When must progress payments be made? When can the government withhold payment? Is interest due on late payments? When is final payment due? How much retainage can be withheld and when must retainage be reduced and fully released?
Generally, payment obligations on public works contracts are set forth in Part II, Chapter 39, of the Pa. Procurement Code, 62 Pa.C.S. § 3901, et seq. These provisions control the public owner’s payment obligations, as well as contractors’ obligations for payment to its subcontractors.
This post is the first in a planned series on the payment requirements for public works contracts in Pennsylvania. Under the Commonwealth Procurement Code, 62 Pa.C.S. § 3941, the public owner’s obligations for final payment are strict.
When retainage is withheld, the public contract must require the architect or engineer to make final inspection within 30 days of receipt of the contractor’s request for final inspection and final payment. If the work is substantially completed, then
the architect or engineer shall issue a certificate of completion and a final certificate for payment, and the government agency shall make payment in full within 45 days except as provided in section 3921, less only one and one-half times the amount required to complete any then-remaining uncompleted minor items, which amount shall be certified by the architect or engineer and, upon receipt by the government agency of any guarantee bonds which may be required, in accordance with the contract, to insure proper workmanship for a designated period of time. [Emphasis added]
Under the terms of the section 3941, once the punch list items are completed, the public owner must make final payment of the amount that was withheld for completion of the punch list .
What does all of this mean in plain English?
Once “substantial completion” is achieved, (1) an inspection must be performed within 30 days after a contractor’s request, (2) the architect must issue a certificate of completion and for payment, (3) the architect must prepare a punch list and assign a value for the punch list items, and (4) payment, less one and a half times the punch list value, must be made to the contractor within 45 days. Final payment must then be made once all of the punch list items are completed.
If you are public works contractor, it is imperative that you request a final inspection after substantial completion. This request triggers the final payment obligations of the public owner. This request also triggers the public owner’s obligation to release retainage. Contrary to popular practice, a public owner is not permitted to hold 5% retainage (or more) until the literal final completion of the work.
If you need assistance on a public works payment issue, call or email me for a no-cost consultation. I’ll be happy to assist in anyway possible.