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PHILADELPHIA WAREHOUSING AND COLD STORAGE v. PENROSE HALLOWELL (04/16/85)

decided: April 16, 1985.

PHILADELPHIA WAREHOUSING AND COLD STORAGE, PETITIONER
v.
PENROSE HALLOWELL, SECRETARY OF AGRICULTURE AND COMMONWEALTH OF PENNSYLVANIA, DEPARTMENT OF AGRICULTURE, RESPONDENTS



Original Jurisdiction in case of Philadelphia Warehousing and Cold Storage v. Penrose Hallowell, Secretary of Agriculture, and Department of Agriculture.

COUNSEL

Leonard J. Bucki, for petitioner.

Ellis M. Saull, Deputy Attorney General, with him, Allen C. Warshaw, Chief Deputy Attorney General, Litigation Section, John B. Hannum, Chief Counsel, Department of Agriculture, and LeRoy S. Zimmerman, Attorney General, for respondents.

Judges Craig, Colins and Palladino, sitting as a panel of three. Opinion by Judge Colins.

Author: Colins

[ 88 Pa. Commw. Page 575]

Philadelphia Warehousing and Cold Storage (petitioner), as a taxpayer, filed this motion for summary judgment asking this Court to void the third year of a three year contract for warehousing services.

On March 4, 1983, the Department of Agriculture (Department) sent an invitation to bid to warehousemen to provide storage space for up to 261 schools and institutions participating in the Government Donated Agriculture Commodities Program. Bids were due on or before April 1, 1983 and the contract was to be awarded to the lowest qualified bidder. Petitioner, along with Rosenberger's Cold Storage, Inc. (Rosenberger's) and Blue Grass Distribution Center (Blue Grass), submitted timely bids for Distribution Area 17. The invitation divided the Commonwealth into numerous distribution areas. Distribution Area 17 covers Bucks, Chester, Delaware, Montgomery and Philadelphia counties.

Although not the lowest on all three items put out for bid, petitioner's bid was the lowest overall. After an inspection by the Department on April 21, 1983, of petitioner's facilities, however, this bid was not considered to be a qualified bid and was rejected. The Department contends that it found petitioner's facility, by itself, inadequate to handle all of the requirements for Area 17.

[ 88 Pa. Commw. Page 576]

On May 7, 1983, notice was sent awarding the Area 17 contract to both Rosenberger's and Blue Grass. The Department claims that it decided to award the contract to two warehouses in order to give the recipient institutions, which had to bear transportation and storage costs, a choice of facilities.

On August 4, 1983, a reinspection of Philadelphia Warehousing's storage facility was conducted by the Department which found the warehouse to be suitable for the Program. On September 2, 1983, the Department accepted Philadelphia Warehousing's bid. Therefore, any of the three warehouses could have been used as the storage facility under the Program. On October 11, 1983, the Department sent a contract to Philadelphia Warehousing for signature. Philadelphia Warehousing notified the Department that the contract received contained incorrect price terms. The Department advised Philadelphia Warehousing to correct the price terms, initial the changes and return the amended contract. A corrected contract was not agreed upon. On June 8, 1984, the Department withdrew its offer to contract with Philadelphia Warehousing. On July 27, 1984, Philadelphia Warehousing sent a signed copy of the contract with the prices corrected and initialed. The Department refused to accept the submitted contract. The arrangement is now in its second year of operation (1984-85 school year).

Petitioner filed a complaint in August 1984, seeking to preliminarily enjoin the Department from awarding the contract.

On December 21, 1984, this Court denied preliminary relief because voiding the contract for the 1984-85 school year in progress could cause public and administrative disruptions which outweighed petitioner's ...


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