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REGIONAL SCAFFOLDING & HOISTING CO. v. CITY OF PHI

May 25, 1984

REGIONAL SCAFFOLDING & HOISTING CO., INC.
v.
CITY OF PHILADELPHIA et al.



The opinion of the court was delivered by: BRODERICK

 RAYMOND J. BRODERICK, District Judge.

 Plaintiff Regional Scaffolding & Hoisting Co., Inc. ("Regional"), a New York corporation, seeks a preliminary injunction pursuant to Fed.R.Civ.P. 65 preventing the defendants (the City of Philadelphia; the City's Director of Finance, Richard Gilmore; the Minority Business Enterprise Council of the City of Philadelphia (MBEC); Albert Childs, Deputy Director of Finance and Staff Director of the MBEC; and Warren Eisenberg, Commissioner of the Department of Procurement) from commencing to rebid, rebidding, and awarding the City contract for the scaffolding work on the City Hall restoration project (Project No. 20-001-2-231) until the issues resolved in this action between the plaintiff and the defendants are finally determined by the Court. Regional has filed this diversity action challenging the City's decision to reject all the bids for the scaffolding work on the City Hall restoration project. At the time the suit was filed Regional sought a temporary restraining order enjoining the City defendants from rebidding or otherwise awarding the contract for the project at issue. The parties entered into a stipulation in connection with Regional's application for a temporary restraining order agreeing to maintain the status quo by not advertising for new bids or otherwise awarding the contract until the plaintiff's motion for a preliminary injunction is determined. In addition to its motion for a preliminary injunction, Regional's complaint seeks permanent injunctive relief in the form of an order compelling the City to accept an amendment to Regional's bid in the form of a substitution of "certifiable" minority-owned and female-owned subcontractors in lieu of those originally included in Regional's bid. On Friday, April 27, 1984, a hearing was held before this Court on Regional's motion for a preliminary injunction. For the reasons set forth below, Regional's motion for a preliminary injunction will be denied.

 The Court makes the following findings of fact based upon the evidence presented at the preliminary injunction hearing. Regional is a New York corporation which installs, maintains, and constructs scaffolding, personnel and equipment hoists. Regional is authorized to do business in the Commonwealth of Pennsylvania, and was engaged in contracting or subcontracting work in the City of Philadelphia during the years 1981, 1982, and 1983. Regional filed tax returns with the Commonwealth of Pennsylvania for the years ending in June of 1982 and June of 1983. As a result of the work which Regional performed in Philadelphia in 1981-1983, it incurred tax obligations to the City of Philadelphia for those periods. Regional has directed the payment of the taxes due and owing to the City of Philadelphia.

 Regional first submitted a bid for the scaffolding and hoist work on the City Hall restoration project in the late winter or early spring of 1983. For reasons not relevant here the City rejected all the bids submitted and advertised for new bids. Regional submitted a new bid in the fall of 1983 on the City Hall project (Bid No. 4781), which is the bid at issue in this case. Regional was one of four bidders on the project. When the bids were opened on October 20, 1983, Regional was the low bidder on the project. No award was made pending "certification" by the MBEC of the proposed minority subcontractors submitted by Regional and the other bidders.

 With respect to such minority subcontractors, all bidders were required to submit a "Schedule for Participation" listing sub-contractors with whom the bidder intended to contract in order to comply with Chapter 17-500 of the Philadelphia Code, which became effective August 12, 1983. Chapter 17-500 requires, inter alia, that all construction contracts of the City of Philadelphia reflect participation of at least fifteen percent minority-owned businesses (hereinafter referred to as "MBEC's," i.e., "minority business enterprises") and ten percent female-owned businesses (hereinafter referred to as "WBE's"). The instructions in the bid package for prospective bidders contained the following pertinent language in connection with MBE and WBE participation:

 
(1) YOU ARE COVERED BY THE PROVISIONS OF CHAPTER 17-500 AND THE REGULATIONS PROMULGATED THEREUNDER, AND ARE REQUIRED TO MEET THE GOALS OF FIFTEEN PERCENT (15%) PARTICIPATION BY MINORITY OWNED BUSINESSES AND TEN PERCENT (10%) PARTICIPATION BY FEMALE OWNED BUSINESSES IN THIS CONTRACT, AS THOSE ITEMS ARE DEFINED IN CHAPTER 17-500 AND THE REGULATIONS UNLESS YOU ARE GRANTED A WAIVER.
 
(c) ANY FIRM THAT IS LISTED IN THE SCHEDULE FOR PARTICIPATION MUST BE CERTIFIED IN ACCORDANCE WITH CHAPTER 17-500 AND THE REGULATIONS BEFORE THE TIME OF AWARD IN ORDER TO BE CONSIDERED AS MEETING THE REQUIREMENTS OF THIS CONTRACT FOR MINORITY AND FEMALE OWNED BUSINESS PARTICIPATION.
 
(e) THE SUBMISSION OF A SCHEDULE FOR PARTICIPATION OR A REQUEST FOR WAIVER WITH THIS BID IS AN ELEMENT OF RESPONSIVENESS TO THE BID, FAILURE TO SUBMIT A COMPLETED SCHEDULE OF PARTICIPATION OR REQUEST FOR WAIVER WILL RESULT IN REJECTION IN YOUR BID.
 
Schedule for Participation
 
1. Only minority and female owned businesses certified pursuant to Part 4 § 4.1 of the Regulations may be counted for participation pursuant to this program. If you are a certified minority or female owned business, you may be listed on the Schedule for Participation to obtain the required contract goals. All certifications must be completed prior to award of the contract. Listing a minority or female owned business on the Schedule For Participation shall constitute a representation that such certified minority or female owned business is available and capable of completing the work with its own work force. Such a listing is also a commitment by the bidder that, if it is awarded the contract, it will enter into a subcontract with the firm for the portion of the work listed at the price set forth in this bid submission.
 
(4) Notwithstanding compliance with these requirements set forth in this section, the Procurement Commissioner reserves the right to reject any or all bids as he may deem for the best interest of the City.

 Regional was aware of all of the instructions quoted above at the time it submitted its bid package.

 The above-noted instructions regarding the Chapter 17-500 requirements were contained in a section of the bid package captioned "MBEC PROGRAM -- CONTRACT LANGUAGE FOR PUBLICLY BID CITY CONTRACTS". Also contained in the bid materials (but not included within the MBEC Program section) was the ...


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