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 In November 2016, after bids were received, the DHS issued a selection memo which was subsequently rescinded due to a scoring error.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Separations Act Not Superseded By Guaranteed Energy Savings Act

In a recent, unreported opinion, the Commonwealth Court held that the Separations Act is not superseded by the Guaranteed Energy Savings Act (GESA), 62 Pa.C.S. §§ 3751-3758, which allows a public entity to award a single contract to implement an “energy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