Bid Protests Upheld Due To Unauthorized Meeting With Bidder

In three recent, unreported decisions arising out of the same procurement, the Commonwealth Court has held that a meeting between the public entity and a bidder, after bids had been received in response to an RFP, but before the bidder was determined to be responsible and before its proposal was deemed to be responsive or the most advantageous, was unauthorized and improper.

In July 2016, the Pa. Department of Human Services (DHS) issued an RFP seeking proposals from managed care organizations to provide health care services in five different “zones” to medical assistance beneficiaries. In November 2016, after bids were received, the DHS issued a selection memo which was subsequently rescinded due to a scoring error. In December 2016, after rescission of the November selection memo but before a new selection of bidders was made, DHS and its counsel met with representatives of a bidder, Pennsylvania Health & Wellness, Inc. (PHW), to discuss PHW’s “operational readiness to operate as an MCO on a statewide basis.” Read more

Posted on June 7, 2018 by Christopher I. McCabe, Esq. in Bid Protests, Procurement Code Comments Off

Separations Act Not Superseded By Guaranteed Energy Savings Act

In a recent, unreported opinion, the Commonwealth Court held that the Separations Act is not superseded by the Guaranteed Energy Savings Act (GESA), 62 Pa.C.S. §§ 3751-3758, which allows a public entity to award a single contract to implement an “energy conservation measure.”

In May 2017, James P. Wescott, the owner of Wescott Electric Company, filed a taxpayer lawsuit to enjoin the Delaware County Intermediate Unit (IU) from awarding a single $38 million contract for the construction of two new additions to an existing structure, the removal of a boiler system, and installation of a new centralized HVAC system to serve all three connected structures. Wescott challenged the award based on the IU’s failure to follow the Separations Act which requires separate bids for plumbing, HVAC, and electrical work. The IU argued that GESA specifically permitted the award of a single contract because the project, which included replacement of an existing boiler and installation of a new centralized HVAC system, qualified as an “energy conservation measure” under 62 Pa.C.S. § 3752. The trial court agreed with the IU and denied the injunction, ruling that a guaranteed energy savings contract did not have to comply with the Separations Act. Read more

Posted on May 24, 2018 by Christopher I. McCabe, Esq. in Guaranteed Energy Savings Act, Separations Act Comments Off

List Of Exempt Steel Products For 2018 Is Unchanged From 2017

The Pennsylvania Department of General Services (DGS) has finally issued the list of machinery and equipment steel products which will be exempt for calendar year 2018 under the PA Steel Products Procurement Act. The list was published in the Pa. Bulletin on Saturday, April 14, 2018, and can be found here. There were no new steel products added to the list. The 30-day comment period expires on May 14, 2018. Read more

Posted on May 2, 2018 by Christopher I. McCabe, Esq. in DGS, Steel Products Act Comments Off

Can Retainage Be Held Until Final Completion Of The Project?

On public projects, an owner typically withholds retainage of 10%. Can the owner hold this 10% retainage until final completion? The short answer is, No!

Section 3921 of the PA Procurement Code mandates that, when the contract is 50% completed, retainage “shall not exceed 5% of the value of completed work” and can then be withheld only until substantial completion. The only condition is that the contractor must be making “satisfactory progress,” and there must be no cause for a “greater withholding.” Read more

Posted on February 6, 2018 by Christopher I. McCabe, Esq. in Procurement Code, Retainage Comments Off

Can A Public Owner Ever Seek Clarification Of Ambiguous Pricing?

Recently, a public owner solicited bids for a university construction project. The bid form sought pricing for base bid work and alternate work. One of the bidders included ambiguous pricing for an alternate item, in that the pricing was neither an “add” nor a “deduct” to the base bid price. Instead, it appeared to be a “total” price for all of the work combined. This “total” price, if accepted, would have been the lowest if award was made on the basis of the alternate. The problem with this bid pricing was soon apparent. The bid instructions had informed bidders that alternate pricing was to be added to the base bid pricing to arrive at a total bid price for use in determining the ranking of the bids. The owner was understandably confused by the pricing which did not conform to the bidding instructions.

Under these circumstances, the owner did not reject the bid as ambiguous, but instead actually called the bidder to seek clarification of the pricing. Having received a “clarification,” the owner then expressed an intent to award a contract to the bidder. A protest was soon filed by another bidder, and the protest was later sustained for obvious reasons. Read more

Posted on January 18, 2018 by Christopher I. McCabe, Esq. in Bid Protests Comments Off

Debriefing After Non-Selection Does Not Toll 7-Day Deadline For Bid Protest

The Pa. Procurement Code sets a strict deadline for bid protests – the protest must be filed within seven days after the protestant knew or should have known of the facts giving rise to the protest. If the protest is untimely, it will be rejected. The impact of this brightline rule was shown in a recent Commonwealth Court decision involving a late-filed protest.

In 2016, the Pa. Department of Human Services issued an RFP seeking proposals from managed care organizations to implement a managed care program for physical health and long-term services for the elderly and disabled. After evaluation of proposals, the Department notified one of the bidders, UnitedHealthcare of Pennsylvania, Inc., that it was not selected. Thereafter, the Department conducted a debriefing with UnitedHealthcare where it provided information concerning the strengths and weaknesses of UnitedHealthcare’s proposal. Unhappy with the outcome, UnitedHealthcare filed a protest, more than seven days after it was notified that it was not selected, but within seven days of the debriefing. The Department denied the protest as untimely, and UnitedHealthcare filed an appeal with the Commonwealth Court. Read more

Posted on December 12, 2017 by Christopher I. McCabe, Esq. in Bid Protests, Com. of Pa., Court Decisions, Procurement Code Comments Off

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 value contracting for contracts for the construction of public buildings.

The Separations Act provides that, for public building construction in Pennsylvania in excess of $4,000, all public owners must prepare separate specifications, solicit separate bids, and award separate contracts for general construction, plumbing, heating and ventilating, and electrical work, with the additional requirement that the award must be made to the “lowest responsible bidder.”

The Separations Act unquestionably applies to the City. With a mandate to award the contract to “the lowest responsible bidder,” the Separations Act would appear to prohibit the City from using a “best value” standard to award construction contracts for a City public building project. Of course, time will tell whether City officials and the courts will agree with this viewpoint.

If you need assistance on a Separations Act issue, feel free to call or email me for a no-cost consultation. I’ll be happy to assist in anyway possible.

Posted on November 21, 2017 by Christopher I. McCabe, Esq. in Best Value Contracting, City of Phila., Separations Act Comments Off

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 so-called “basis of design.” No domestic cast iron boilers were permitted under the boiler specification. Is this practice legal under the PA Steel Products Procurement Act? Can a public owner simply override the Steel Act with a proprietary specification for a name-brand product which is made outside the U.S. but which is preferred by the owner’s design team? Read more

Posted on October 24, 2017 by Christopher I. McCabe, Esq. in Steel Products Act Comments Off

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 April 2016, the Northampton County General Purpose Authority issued a Request for Proposals under the P3 Act for the Northampton County Bridge Renewal Program for the replacement, rehabilitation, and maintenance of 33 bridges in Northampton County. Four bidders responded, including Clearwater Construction, Inc./Northampton County Bridge Partners LLC and Kriger Construction, Inc. Ultimately, the Authority selected Kriger to negotiate a public-private partnership agreement to develop the bridge renewal program. Read more

Posted on September 28, 2017 by Christopher I. McCabe, Esq. in Bid Protests, Court Decisions, Public Private Partnership Comments Off

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 long-term solid waste and recyclables contract. Previously, Allentown had used an Invitation to Bid (ITB) process for the same contract. When a contract award was ultimately made to Waste Management of Pennsylvania, Inc., two bidders filed for an injunction, arguing that Allentown’s use of the RFP process was contrary to law. The trial court denied the injunction and an appeal was taken. Read more