Recent Commonwealth Court Decision Affirms Core Bidding Principles

A recent decision concerning a bid protest filed on a PennDOT contract re-affirmed core principles of public bidding and bid protests on Commonwealth contracts.

In Sidelines Tree Service, LLC v. Department of Transportation, the Commonwealth Court considered an appeal from a denial of a bid protest filed on a contract for line-clearance tree-trimming services. The hearing officer determined that the disappointed bidder was non-responsible due to its poor performance on prior PennDOT contracts, and denied the protest. On appeal, the Commonwealth Court affirmed. Read more

Posted on February 3, 2022 by Christopher I. McCabe, Esq. in Bid Protests, Bidder Responsibility, Com. of Pa., Court Decisions, PennDOT, Public Bidding 101, Responsibility Comments Off

PA Supreme Court Clarifies The Meaning Of “Cost” Under the PA Steel Products Procurement Act

The PA Steel Products Procurement Act was first enacted in 1978. At its core, the Act provides that any steel products used or supplied on a public works project in Pennsylvania must be U.S. steel products. Under the Act, a product that contains both foreign and U.S. steel qualifies as U.S. steel product “only if at least 75% of the cost of the articles, materials and supplies have been mined, produced or manufactured, as the case may be, in the United States.”

The Act does not define the word “cost,” and it has been somewhat of a mystery as to what can be included as a “cost” for purposes of satisfying the 75% rule. It has always been my view of the 75% rule, and my advice to clients, that whatever cost was incurred as part of the mining, production, or manufacturing process to obtain and produce the materials that are incorporated into the finished product should count as a “cost” in determining whether the 75% rule has been satisfied.

Since its enactment, there have been few cases interpreting the Act, leading to great uncertainty and confusion among all affected parties. Now, in a case of first impression, the Pennsylvania Supreme Court has offered much needed guidance on this issue. In United Blower, Inc. v. Lycoming County Water and Sewer Authority, 259 A.3d 960 (Pa. 2021), the question concerned whether air blowers supplied on a public project for the Lycoming County Water and Sewer Authority qualified as U.S. steel products. During the project, the prime contractor provided the Authority with an ST-3 form, attesting that more than 75% of the cost of the air blowers – which contained both foreign and domestic steel – was attributable to U.S.-produced “articles, materials and supplies.” However, the Authority disputed compliance with the Act. Subsequently, a hearing was held before an independent hearing officer to decide whether the air blowers complied with the Act. Read more

Posted on January 13, 2022 by Christopher I. McCabe, Esq. in Court Decisions, Steel Products Act Comments Off

Commonwealth Court Strikes Down Use Of Project Labor Agreements Except In Extraordinary Circumstances

A project labor agreement (PLA) is a “pre-hire” collective bargaining agreement with one or more labor unions that establishes the working conditions on a specific, usually public, construction project. PLAs are controversial, not least because they typically restrict nonunion contractors from using their own workforce and require them instead to hire their workforce from the local unions’ labor pool, but their previous use on public projects in Pennsylvania has been upheld. However, in a recent case brought by two nonunion contractors, the Commonwealth Court has now invalidated the use of a PLA on a public highway project as a violation of Pennsylvania’s strict competitive bidding requirements for public contracts.

In December 2017, the Pennsylvania Department of Transportation (PennDOT) issued a bid for a highway improvement project for US Route 202 in Norristown. The bid required the winning contractor to sign a PLA with the Building and Construction Council of Philadelphia and Vicinity, which represented 11 local unions. The PLA required the winning contractor to hire their workforce through the local unions and to be bound by the local unions’ collective bargaining agreements. However, the PLA also specified that, if the winning contractor had a collective bargaining agreement with the United Steelworkers union, which was not one of the 11 local unions, then the contractor was permitted to use its own workforce.

Allan Myers, L.P. (Myers) and J.D. Eckman, Inc. (Eckman), two nonunion contractors, filed protests with PennDOT, challenging the use of the PLA. Myers and Eckman argued that the PLA was unlawful, arbitrary and discriminatory, as it disfavored nonunion contractors and unduly favored contractors affiliated with United Steelworkers. PennDOT disagreed, arguing that case law supported the use of a PLA on a public works project. The protests were denied, and Myers and Eckman then appealed to the Commonwealth Court. Read more

Posted on January 17, 2019 by Christopher I. McCabe, Esq. in Bid Protests, Com. of Pa., Court Decisions, PennDOT, Procurement Code, Project Labor Agreements Comments Off

Bid Submitted By Email Was Properly Rejected

Bidding instructions are for the most part mandatory. The failure to follow bid instructions can easily result in the rejection of a bid. That is exactly what happened to one unfortunate bidder who submitted its bid by email instead of through the online portal specified by the bid instructions.

In January 2017, the PA Department of Environment Protection (DEP) advertised a bid solicitation on the PA eMarketplace website for a contract to provide services in support of the development of a climate change action plan. The bid advertisement specified, in bold print, that potential contractors were required to complete their bids via an online portal and further stated, also in bold print, that bid responses “will only be accepted electronically.”

Center for Climate Strategies, Inc. (CCS) was unable to submit its bid via the specified online portal. Instead, CCS emailed its bid to three DEP employees as a “failsafe” measure prior to the bid deadline. Because CCS’s bid was not submitted via the online portal, DEP rejected the bid as “non-responsive.” CCS protested the rejection on grounds that its bid submission was timely and complete in all respects and that the online portal was unavailable to CCS through no fault of its own. The protest was denied, and CCS then appealed to the Commonwealth Court. Read more

Posted on January 10, 2019 by Christopher I. McCabe, Esq. in Bid Protests, Bid Responsiveness, Court Decisions Comments Off

Employees Of Nonunion Contractor Lack Standing To Challenge PennDOT Bid Solicitation

A challenge to a public bid or contract ultimately depends on the “standing” of the challenger to bring the challenge. Standing means that the party initiating legal action must show that it has been “aggrieved” – i.e., that it has a “substantial, direct, and immediate interest in the outcome of the matter. A recent decision by the Commonwealth Court squarely addressed the issue of standing in the context of a public bid solicitation and found it lacking.

In December 2017, the Pennsylvania Department of Transportation (PennDOT) issued a bid solicitation for a contract to perform highway improvements to US Route 202 in Norristown. The bid required contractors to sign a project labor agreement (PLA) with the Building and Construction Council of Philadelphia and Vicinity.

Two employees of a nonunion contractor, Allen Myers LP (Meyers), filed an action in the Commonwealth Court seeking to enjoin PennDOT from requiring contractors to sign the PLA as a condition for bidding and performing work on the Route 202 project. They alleged that the PLA precluded nonunion contractors from bidding on the project and applied different standards to different bidders, and alleged that the PLA requirement violated the Commonwealth Procurement Code and the State Highway Law. Read more

Posted on December 27, 2018 by Christopher I. McCabe, Esq. in Court Decisions, PennDOT Comments Off

Commonwealth Court Directs Municipal Authority To Execute Public Contract With Highest Scoring Bidder

How many votes are needed for a municipal authority board to award a public contract? The Commonwealth Court recently held, in Seda-Cog Joint Rail Authority v. Carload Express, Inc., 185 A.2d 1232 (2018), that a majority vote of board members present and voting is sufficient and effective to award the contract and that abstaining board members are not counted as “present” even if they are physically present.

The Seda-Cog Joint Rail Authority (Authority), is governed by a 16-member board of directors and owns rail lines in several Pennsylvania counties, which are operated by a private railroad operator. In 2014, the Authority issued an RFP for a new operating agreement. The RFP contemplated that the highest scoring operator would receive the new agreement. Because of abstentions by board members, it was clear throughout the RFP selection process that no more than 10 board members would vote to decide the contract award. The Authority also informed candidates that it would require “yes” votes from at least nine board members to award a contract. However, this voting requirement was not included in the RFP or the Authority’s bylaws.

At the end of the evaluation process, Carload Express, Inc. (Carload) received the highest score. A meeting of all 16 board members was held, with seven votes in favor of Carload, three votes against, and six abstaining. The Authority declined to award the contract to Carload, and filed an action seeking a declaration that the 7-3 vote was ineffective. Carload filed a counterclaim seeking a contrary declaration, and an order requiring the Authority to execute a contract with Carload. The trial court ruled in favor of the Authority and Carload appealed to the Commonwealth Court. Read more

Posted on August 2, 2018 by Christopher I. McCabe, Esq. in Court Decisions, Municipal Authorities 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

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

Posted on September 19, 2017 by Christopher I. McCabe, Esq. in Court Decisions Comments Off

Commonwealth Court: Laches Requires Reversal Of Injunction Issued For Violation Of Separations Act

A recent decision by the Commonwealth Court of Pennsylvania illustrates the extreme perils of waiting too long to challenge a violation of the public bidding laws.

In December 2015, the West Jefferson Hill School District solicited bids for a new high school project. All sanitary, storm, and water line installations inside and up to five feet outside the building were included in the scope of the prime plumbing contract. All site sanitary, storm, and water line installations more than five feet from the building were included in the scope of the prime general contract as “site utility” work. In January 2016, the school district awarded the prime plumbing contract to Wheels Mechanical Contracting (Wheels). Read more