Philadelphia LBE Bidder Must Include Subcontractor LBE Compliance With Its Bid

A recent Commonwealth Court decision has clarified what is required from a bidder for a City of Philadelphia (City) contract in order to be afforded the 5% bid preference for a certified local business entity (LBE) under the City’s local bidding preference ordinance.

Under the City of Philadelphia local bidding preference ordinance, an LBE receives a 5% reduction/preference from its bid price for purposes of determining the lowest bidder for award. According to the ordinance, and the City’s local bidding preference regulations, the LBE is entitled to the LBE 5% preference so long as it will perform at least 51% of the work with its own forces, or with the forces of its certified LBE subcontractors. Pursuant to the local bidding preference ordinance, and the regulations, the bidder is required to submit with its bid its LBE certification and annual affidavit, as well as the LBE certification and annual affidavit of any LBE subcontractors it intends to use to satisfy the 51% requirement.

However, notwithstanding the plain language in the ordinance and regulations, the City’s standard bid instructions normally required only submission of the bidder’s own LBE certification, even where the bidder intended to use LBE subcontractors to satisfy the requirement that the bidder will perform at least a majority of the work under the contract.

In April 2019, the City awarded a Water Department contract to Thomas P. Carney, Inc. (Carney), an LBE whose bid price was the second lowest, but was the lowest after the local preference was applied. Carney included with its bid its own LBE certification and affidavit, but did not include any LBE paperwork for its subcontractors, even though the work involved would have been performed by Carney’s LBE subcontractors.

C. Abbonizio Contractors, Inc. (Abbonizio), the low bidder, filed for a preliminary injunction to stop the contract award to Carney, claiming that Carney’s bid was defective because it failed to include a current LBE certification and affidavit for its subcontractors. The trial court refused to enter an injunction. On appeal, the Commonwealth Court reversed, finding that:

Based upon this Court’s strict reading of Section 17-109(5)(a) of the Philadelphia Code, Carney had to fulfill the requirements in Section 17-109(5)(a)(.1), (.2), (.3) and (.4) of the Philadelphia Code when it submitted its bid in order to receive the LBE preference in accordance with the Philadelphia Code. It being undisputed that Carney did not satisfy the specific LBE preference requirements, Carney should not have received the benefit thereof. Without the LBE preference, Carney was not the lowest bidder. Rather, Appellants submitted the Project’s lowest bid. Accordingly, Appellants are likely to prevail on the merits and their right to relief is clear.

Posted on June 10, 2020 by Christopher I. McCabe, Esq. in City of Phila., Local Bidding Preference Comments Off

Philadelphia Voters Approve Amendment To Charter Allowing Award Of Non-Competitive Contracts Of Less Than $100k To Local Businesses

At the last general election in November, Philadelphia voters approved an amendment of the City of Philadelphia Home Rule Charter to allow for the award of contracts to, or purchases from, Philadelphia-based businesses where the contract or purchase is for less than $100,000 (which is to be adjusted annually for inflation). This local business exception does not apply, however, to contracts “for the erection, remodeling or alteration of, or addition to, any building or structure.”

According to a City Council press release, the City Charter amendment favoring local businesses “would expand access to more small businesses – especially for minority- and woman-owned establishments – and incentivize diversity and competition.”

The voters also approved an amendment to the City Charter which will increase the competitive bidding threshold from $34,000 to $75,000 (to be adjusted annually for inflation) for the award of contracts to, or purchases from, businesses not based in Philadelphia.

These amendments will take effect in January 2020.

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

Posted on December 30, 2019 by Christopher I. McCabe, Esq. in City of Phila., General 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

Regulations Issued For City of Philadelphia Best Value Contracting

On July 27, the regulations governing the City of Philadelphia’s purchase of goods and non-professional services under the “best value” standard became official.

Under the regulations, the Procurement Commissioner can permit a contract to be awarded under the “best value” standard only after a City department has made a detailed recommendation to the Commissioner. The regulations also cover issues such as the technical scoring criteria, makeup of the selection committee, and the evaluation and scoring of bidder proposals. For example, price must receive at least 30% of the total score and non-price attributes must receive at least 50% of the total score.

Posted on August 3, 2017 by Christopher I. McCabe, Esq. in Best Value Contracting, City of Phila. Comments Off

Philadelphia Voters Approve Best Value Contracting

It’s official! Philadelphia voters have voted in favor of the best value ballot question. Read more

Posted on May 18, 2017 by Christopher I. McCabe, Esq. in Best Value Contracting, City of Phila. Comments Off

Committee of Seventy Throws Its Weight Behind City Of Philadelphia Best Value Initiative

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

Posted on May 9, 2017 by Christopher I. McCabe, Esq. in Best Value Contracting, City of Phila. Comments Off

Best Value Contracting Question On Philadelphia Primary Election Ballot

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.

Posted on May 2, 2017 by Christopher I. McCabe, Esq. in Best Value Contracting, City of Phila. Comments Off

Is Best Value Contracting The Future For The City Of Philadelphia?

Is “best value” contracting the next, new thing for the City of Philadelphia?

The Philadelphia City Council recently passed a resolution proposing an amendment to the Philadelphia Home Rule Charter that would give the Procurement Department the option to award contracts, which are normally awarded to the lowest, responsible bidder, to “the responsible bidder whose proposal provides the City with the best value.” This amendment would radically alter a provision in Article VIII, Chapter 2, of the Charter that has been in place since the Charter was first enacted in 1952. Read more

Posted on December 13, 2016 by Christopher I. McCabe, Esq. in Best Value Contracting, City of Phila. Comments Off

City Of Philadelphia Will Accept E-Bids Starting Fall 2016

Starting this fall, in a move to make bidding more efficient and competitive, the City of Philadelphia will begin to accept electronic bids and contract proposals. Philadelphia officials hope to make all aspects of City contracting electronic-based – from vendor registration to bids and even contract signatures. The change will affect contracts for public works, contracts for non-professional services, and contracts for goods and equipment. Contracts for professional services contracts are already subject to e-bidding. Contractors who wish to bid for City contracts must register for the new program.

The new PHLContracts website can be found here.

Contractors can find registration information here.

An FAQ on the new program can be found here.

An article in The Philadelphia Inquirer on the new program can be found here.

Posted on September 12, 2016 by Christopher I. McCabe, Esq. in City of Phila., Electronic Bidding Comments Off

What Rules Govern The Award Of Public Contracts By The Philadelphia Gas Works?

Have you ever wondered what rules govern the award of public contracts by the Philadelphia Gas Works (PGW)? Believe it or not, the answer to this question requires analysis of an ancient Philadelphia Gas Commission document that is more than 50 years old!

PGW is a collection of assets owned by the City of Philadelphia (City) that are used to manufacture and deliver natural gas to citizens residing within the City’s borders. PGW is managed by a non-profit entity, the Philadelphia Facilities Management Corporation (PFMC), pursuant to a 1972 agreement between the City and PFMC. The agreement is itself is authorized by Ordinance No. 455, enacted by the Philadelphia City Council in 1972. The Gas Commission has general oversight over the management and operation of PGW by PFMC.