If a public owner breaches its payment obligations to a public contractor and acts in bad faith in doing so, is the public contractor automatically entitled to an award of its attorney’s fees and a 1% penalty under section 3935 of the Procurement Code?
In a recently published opinion, the Supreme Court of Pennsylvania has ruled that such an award is discretionary, not automatic, reversing a 2014 Commonwealth Court decision which had held that a bad faith finding entitled the contractor to recover its attorney’s fees and the 1% penalty. Read more
If a public owner mandates that all bidders use PennBid, an electronic bidding system used by public owners in Pennsylvania, for receipt and tabulation of their bid prices, but also inexplicably requires each bidder to write out its base bid price in words and numbers, what bid form controls? The PennBid tabulation, or the handwritten bid form?
Suppose the PennBid tabulated base bid price is $100,000, but the bidder writes out $100,001? Which is the controlling bid price? Why, for that matter, would any public owner require two forms of bid pricing which only invites confusion and the possibility of conflicting prices?
In a recent, unreported decision, the Commonwealth Court of Pennsylvania affirmed the dismissal by the Board of Claims (Board) of a late-filed contractor claim. Under the Board’s jurisdictional statute, 62 Pa. C.S. § 1712.1(e), a formal statement of claim must be filed with the Board, either within 15 days of the mailing date of a final determination denying a claim, or within 135 days of the filing of a claim, whichever occurs first. Read more
In a departure from the usual rule, but not surprising given the facts of the case, the Commonwealth Court of Pennsylvania recently enforced a subcontractor’s claim for payment against a public owner.
In 2009, West Allegheny School District terminated Flaherty Mechanical Contractors, LLC, the prime contractor on a school alterations project, for failure to pay various subcontractors. After the termination, to prevent further delay, the school district asked F. Zacherl, Inc., the sheet metal subcontractor, to return to the project and complete the work remaining under its subcontract with Flaherty.
Zacherl orally agreed with school district, provided it was paid its then outstanding invoices. These invoices were paid, and Zacherl completed its work, but the school district made no further payments for either the work Zacherl had performed for Flaherty or the work Zacherl performed for the school district. Zacherl sued Flaherty’s surety and the school district for payment. The trial found in favor of Zacherl, with the surety liable for payment for Zacherl’s work for Flaherty, and the school district liable for Zacherl’s work for the school district. The school district appealed. Read more
According to recent audits conducted by the Pa. Department of the Auditor General, Pennsylvania school districts spent at least $53.7 million in excess of the state’s transportation reimbursement formula through the use of no-bid busing contracts.
The conclusion of the Auditor General was based on audits of about 450 of the state’s 500 public school districts. As a result, Auditor General Eugene DePasquale called on the Pa. General Assembly to mandate competitive bidding for such transportation services, saying:
To get the best possible price and ensure transparency for taxpayers, student transportation contracts should be re-bid every time they are up for renewal. I’m calling on the General Assembly to enact legislation to ensure school districts are getting the best possible price by requiring them to seek competitive bids for transportation services. Amending the Public School Code to require schools to competitively bid transportation services will improve transparency and could put more money in our classrooms.
The Auditor General press release issued on May 12, 2016, can be found here. A PennLive story on the Auditor General’s findings can be found here.