DSBE Contracting Rules

The City of Philadelphia has yet again taken action against a City contractor – William Betz Jr. Inc., a plumbing supply firm – for violation of the City’s minority contracting program and anti-discrimination policy (now re-authorized in Executive Order No. 3-12). This is the third enforcement action taken by the City this year. My posts on the City’s earlier enforcement actions can be found here and here.

The City and the Betz firm signed a “no-fault” agreement under which the firm agreed not to participate on City contracts for two years, effective October 23, 2012, essentially a two-year debarment. The City found that the Betz firm had committed violations on at least 15 City contracts. The agreement resulted from debarment proceedings which were instituted by the City earlier this year and which stemmed from a claim by the City that the Betz firm had colluded with two other firms to make it appear that a City-certified minority vendor had provided equipment and supplies for a government-funded weatherization project when the minority vendor was paid only for the use of its name and minority certification. As part of its agreement with the City, the Betz firm also agreed to pay the City $128,000 within 90 days.

As I have stated previously, if you are a City contractor or supplier and you think you can evade the City’s M/W/DSBE contracting requirements, think again! There is very good chance that you will get caught eventually, and, when that happens, you will likely pay a hefty price. Don’t make that mistake. Get sound legal advice before you proceed down a path of no return and potential debarment and significant fines.

The City’s full press release on its agreement with the Betz firm can be found here.

Posted on October 25, 2012 by Christopher I. McCabe, Esq. in City of Phila., DBE/MBE/WBE Comments Off

City of Phila. Issues New Executive Order for M/W/DSBE Contracting Program

On September 20, 2012, Philadelphia Mayor Michael A. Nutter signed Executive Order No. 3-12 which reauthorizes the City’s Office of Economic Opportunity (formerly known as MBEC) as well as the City’s antidiscrimination policy and program for contracting and subcontracting opportunities on City contracts for minority business enterprises, woman business enterprises, and disabled business enterprises (M/W/DSBEs).

Some of the differences between Executive Order No. 3-12 and the prior Executive Orders on the same topic include the following:

the prior term “good faith efforts” is replaced by a new term “best and good faith efforts”
the prior term “commercially acceptable function” is replaced by the term “commercially useful function” which is borrowed from the regulations for the U.S. Department of Transportation DBE program
OEO no longer certifies M/W/DSBEs but accepts certifications from other certifying agencies and maintains a a M/W/DSBE registry (this has been the case since March 2010)
the two-step appeal process for bidders whose bids are rejected as non-responsive is eliminated and rejected bidders now have only a single and final appeal to the OEO Executive Director

Executive Order No. 3-12 applies to City of Phila. bids advertised and/or opened on or after September 4, 2012.

As always, contractors bidding for City contracts to which Executive Order No. 3-12 applies must carefully abide by the solicitation and commitment requirements of the City’s M/W/DSBE program, and should seek the assistance of experienced legal counsel if they believe that they will be unable to satisfy specified M/W/DSBE participation ranges, or if their bids are rejected as non-responsive for failure to satisfy the specified M/W/DSBE participation ranges and to show best and good faith efforts.

Executive Order No. 3-12 can be found here.

Posted on October 18, 2012 by Christopher I. McCabe, Esq. in City of Phila., DBE/MBE/WBE Comments Off

GBCA to Host DBE Seminar on October 25 and 26

On October 25 and 26, 2012, the General Building Contractors Association will host a two part seminar on navigating disadvantaged business enterprise programs in the public contracting realm, for both federally-funded and locally-funded contracts.

Topics to be covered will include: (1) Bidding Requirements/Concerns; (2) Post-Award Enforcement/Compliance; and (3) Best Practices.

I will be in attendance as a presenter on both days, and I am looking forwarding to sharing my knowledge and experiences on these important topics.

Information on the GBCA seminar can be found here.

Posted on October 12, 2012 by Christopher I. McCabe, Esq. in DBE/MBE/WBE Comments Off

Right-to-Know Law Requires Disclosure of Bids Submitted to Contractor Performing Government Function

In a recent decision interpreting the Pa. Right-to-Know Law, the Pennsylvania Supreme Court ruled that the Law required the disclosure of public bids received by a private contractor standing in the shoes of a public entity.

In SWB Yankees, LLC v. Wintermantel, 45 A.3d 1029 (2012), the Supreme Court held that documents in the possession of a private entity serving as the management agent for a municipal authority in the operation of a minor league baseball stadium were subject to disclosure under the newly enacted Right-to-Know Law.

In 2008, the Multi-Purpose Stadium Authority of Lackawanna County entered into a management agreement with a private entity, which vested the private entity with the overall management and control of the day-to-day operations of a municipal-owned baseball club, the Scranton/Wilkes-Barre Yankees, and a municipal-owned minor league stadium.

When the SWB Yankees awarded a new contract for concessionaire operations at the stadium, a newspaper reporter for sought copies of the concessionaire bids from the Stadium Authority. The Authority’s solicitor denied the Right-to-Know request, stating that the Authority did not possess such information. While the Right-to-Know Law applies to certain records in the possession of third parties, like the SWB Yankees, the solicitor claimed that the SWB Yankees was not performing a governmental function on behalf of the Authority and refused to disclose the bids.

The section of the Right-to-Know Law that cover public records in the hands of private parties states as follows:

A public record that is not in the possession of an agency but is in the possession of a party with whom the agency has contracted to perform a governmental function on behalf of the agency, and which directly relates to the governmental function and is not exempt under this act, shall be considered a public record of the agency for purposes of this act.

The Supreme Court rejected the solicitor’s interpretation of the Right-to-Know Law, and held that the Authority was required to disclose any written concessionaire bids for the stadium.

This decision could have far-reaching consequences for public contractors across the Commonwealth. If you are a contractor performing a core and traditional government function – as opposed to simply doing work for the government – then the records of bidding and your performance will likely be subject to disclosure under the Right-to-Know Law. On the other hand, if you are a contractor performing services or work for a public entity, there is still the chance that the records of your work will be subject to disclosure.

A full copy of the Supreme Court’s decision can be found here.

Posted on October 2, 2012 by Christopher I. McCabe, Esq. in General Comments Off

Public Bidding 101: Contract Award

This post is one in a continuing series on the basic tenets of public bidding in Pennsylvania. The subject of today’s post is the contract award – when it must be made and who is entitled to the award.

Under the Pa. Procurement Code, 62 Pa.C.S. § 3911, the award of a public contract must occur within 60 days of the bid opening. This deadline can be extended by written consent signed by the bidder and the public entity. Thereafter, under 62 Pa.C.S. § 3912, once the contract is awarded, it must be executed by the public entity within 60 days of the award. The failure of the public entity to meet these deadlines, absent a written waiver by the successful bidder, will release the successful bidder from any liability on its bid and will entitle all bidders to the return of any posted bid security.

Who is entitled to the contract award? Ordinarily, the lowest responsive and responsible bidder is entitled to the award of the contract. For my post on bid responsiveness, click here. For my post on bidder responsibility, click here. Where the lowest bidder is either non-responsive or non-qualified, the contract may be awarded to a bidder whose price is not the lowest. In Pearlman v. City of Pittsburgh, 304 Pa. 24, 155 A. 118 (1931), the Supreme Court of Pennsylvania observed that, once the pubic entity has determined the lowest responsible bidder, discretion ends, and the contract, if it is to be awarded, must be given to that bidder.