PENNVEST Announces $115 Million In Water And Wastewater Projects

On April 25, 2012, the Pennsylvania Infrastructure Investment Authority (PENNVEST) announced the investment of $115 million in 28 non-point source, drinking water, and wastewater projects in 17 counties. In the PENNVEST press release, Governor Tom Gorbett is quoted:

“These projects will significantly contribute to improved waterways, including the Chesapeake Bay, and will also create hundreds of new jobs that are so vital to our local communities.”

“These projects serve the dual purposes of responsible environmental stewardship and steadfast economic recovery, both of which are critical to the future of Pennsylvania.”

Of the $115 million total, $82 million is for low-interest loans and $33 million is offered as grants.

The funding comes from a combination of state funds approved by voters, federal grants to PENNVEST from the Environmental Protection Agency, and recycled loan repayments from previous PENNVEST funding awards. This new funding will undoubtedly mean more work for public works contractors performing wastewater and utility work in Pennsylvania.

For the official PENNVEST press release, click here.

Posted on May 3, 2012 by Christopher I. McCabe, Esq. in General Comments Off

Public Bidding 101: Responsiveness

This post is one in a continuing series on the basics of public bidding in Pennsylvania. The topic of this post is “responsiveness.”

The term “responsiveness” refers to whether a bid is compliant with the requirements specified in the invitation to bid. For a public bid to be accepted, it must be “responsive” to the bidding instructions, meaning that it must satisfy the mandatory terms, conditions, and instructions contained in the bid invitation. If a bid fails to adhere to the mandatory bidding requirements, the bid is considered “non-responsive.”

Mandatory compliance with bidding instructions guarantees that contract awards will be made fairly and economically. First, with clear-cut ground rules for vendor competition, none of the bidders will obtain an unfair advantage from a special knowledge of the bidding requirements. Second, the principle of strict adherence to the bid instructions reduces the possibility of fraud or favoritism in favor of one bidder over another.

Examples of non-responsive bids are those that are missing critical pricing information, or an authorized signature of the bidder. A non-responsive bid may be missing a bid bond, may contain a counter-offer that deviates from the specifications of the bid, or may be missing a required form, such as a signed addendum. A determination that a bid is non-responsive is typically final and is normally not subject to any review or administrative appeal by the rejected bidder. The concept of bid responsiveness was noted and explained in Nielson v. Womer, 46 Pa. Cmwlth. 283, 406 A.2d 1169, 1171 (1979).

Whether a bid which is non-responsive can nonetheless be accepted by waiving the bid defect was addressed in my earlier post on the “Hall of Fame” decision in Gaeta v. Ridley School District.

Posted on May 2, 2012 by Christopher I. McCabe, Esq. in Bid Responsiveness, Public Bidding 101 Comments Off

OEO Changes Policy on City Contracts for Non-Stocking M/W/DSBE Suppliers

After long treating M/W/DSBE supply firms the same as M/W/DSBE subcontractors, and giving City contractors 100% credit for the use of M/W/DSBE supply firms, the City of Philadelphia Office of Economic Opportunity has now changed its tune. Apparently, the OEO will no longer give full credit for use of an M/W/DSBE supply firm, unless the firm is a “stocking” supplier, meaning that it actually has in stock the supplies which it plans to furnish to the prime contractor on the City contract.

The new policy was reported in The Philadelphia Tribune in February. Angela Dowd-Burton, Executive Director of the OEO, was quoted in the Tribune article as follows:

“They [the M/W/DSBE] don’t have the inventory, and the probability is they’re just picking up the phone and collecting a fee…So, we’ve decided that whatever commission you get from making that call, that’s the only participation we’re going to report on.”

“Contractors will ultimately have to find participation from minority- and women-owned businesses that actually hire people and use contractors that do work, as opposed to someone that is providing more of a clerical function.”

The new OEO policy will undoubtedly affect many M/W/DSBE supply firms, as it is rare that any supplier will have in stock all of the needed supplies for a construction project. Where custom or special order equipment is involved, as is the case on many public works projects, it is unlikely that any supplier will have the equipment in stock.

The OEO is reportedly encouraging the use of subcontractors for the ordering of construction supplies. It is hard to see how this makes any difference, however, as it is unlikely that a subcontractor will have in stock the supplies that the supply firm does not.

As for City contractors, they must now pay greater attention to the firms that they propose to meet the City’s M/W/DSBE contracting goals. If those firms are suppliers, and not working subcontractors, the City contractor may need to think twice before using the supply firm to avoid risking disqualification for failure to meet the City’s contracting goals, or seek clarification from the OEO before submitting a bid.

Posted on April 30, 2012 by Christopher I. McCabe, Esq. in City of Phila., DBE/MBE/WBE Comments Off

City Issues FY2012 1st Quarter Report for M/W/DSBE Contracting

In January 2012, the City’s Office of Economic Opportunity issued its First Quarter Report for Fiscal Year 2012 for contracting activity by minority, woman, and disabled-owned business enterprises (M/W/DSBEs) on City and City-related contracts. The report can be found here.

Posted on April 28, 2012 by Christopher I. McCabe, Esq. in City of Phila., DBE/MBE/WBE Comments Off

Failure to Submit Proper Consent of Surety Is Non-Waiveable Bid Defect

In a recent decision, Dragani v. Borough of Ambler, 37 A.3d 27 (2012), the Commonwealth Court of Pennsylvania has ruled that a bid for a borough waste collection contract contained a non-waiveable defect where the bidder failed to include a proper consent of surety from a surety with an at least $20 million of underwriting authority, as per the bid instructions.

While the Court in Dragani recognized that the Supreme Court’s decision in Gaeta granted municipalities more leeway in waiving apparent defects, the Court declined to find that the defect was waiveable under the Gaeta decision. Instead, the Court held that the borough’s instructions were unambiguous and removed any discretion to waive the consent of surety requirement. The Court followed its decision in Glasgow v. Pennsylvania Department of Transportation, 851 A.2d 1014 (Pa. Cmwlth. 2004), where it held that, if a defect involves the waiver of a mandatory requirement that the bid specifications treat as non-waiveable, then the defect cannot be waived.

One concern, not explored in the Court’s opnion, is whether the underwriting authority limitation could serve in future bids as a means to disqualify an otherwise qualified bidder whose surety happens not to meet the $20 million threshold, without any real benefit for the municipality. In Dragani, the bidder’s surety, Fidelity-Maryland, had $16 million in underwriting authority, but its parent had $571 million in underwriting authority.

Nonetheless, the primary lesson from Dragani is that bidders must pay careful attention to the bid instructions, especially those concerning the bid security. This lesson cannot be overstated.