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PA Associated Builders and Contractors, Inc. v. Commonwealth Dep't of General Services

May 19, 2010

PA ASSOCIATED BUILDERS AND CONTRACTORS, INC., PETITIONER
v.
COMMONWEALTH DEPARTMENT OF GENERAL SERVICES, RESPONDENT



The opinion of the court was delivered by: Judge Pellegrini

Argued: April 21, 2010

BEFORE: HONORABLE BONNIE BRIGANCE LEADBETTER, President Judge, HONORABLE BERNARD L. McGINLEY, Judge, HONORABLE DAN PELLEGRINI, Judge, HONORABLE RENÉE COHN JUBELIRER, Judge, HONORABLE MARY HANNAH LEAVITT, Judge, HONORABLE P. KEVIN BROBSON, Judge, HONORABLE PATRICIA A. McCULLOUGH, Judge.

OPINION

Before this Court is a motion for summary relief*fn1 filed by PA Associated Builders and Contractors, Inc. (ABC) requesting us to find the Department of General Services' (DGS) use of competitive sealed proposals also known as requests for proposals (RFPs) rather than competitive sealed bids for complex construction projects or projects with allocations in excess of $5,000,000 in violation of the Pennsylvania Procurement Code.*fn2 DGS has filed a cross-motion for summary relief requesting us to dismiss all of the issues raised in ABC's motion as moot with the exception of the constitutional argument raised and then requests this Court to find that its use of the RFPs is constitutional.

I.

Before 2005, when a building or facility needed to be constructed in Pennsylvania, the process that was followed to award construction contracts was competitive sealed bidding pursuant to Section 511 of the Procurement Code, 62 Pa. C.S. §511.*fn3 This process provided that the award of the contract went to the lowest responsible bidder in order to ensure fairness while also guarding against fraud and favoritism to all those bidding. Section 512(g) of the Procurement Code, 62 Pa. C.S. §512(g).*fn4 After the bids were received and opened, all of the bidding documents were considered public records. Vartan v. Department of General Services, 550 A.2d 1375 (Pa. Cmwlth. 1988).*fn5 While not widely used, Section 513 of the Procurement Code, 62 Pa. C.S. §513,*fn6 allowed for competitive sealed proposals or RFPs when competitive sealed bidding was either not "practicable or advantageous" to the Commonwealth.

On April 7, 2005, DGS issued the "Best Value Policy" which authorized the use of RFPs "to accomplish the Department's goal of improving upon timely delivery of quality multiple-prime construction projects by qualified contractors. The process should be considered for use on complex projects or projects with allocations exceeding $5,000,000." The Policy Determination went on to state:

The Deputy Secretary shall make a written determination, as required by §513(a) of the Commonwealth Procurement Code, to use the competitive sealed proposal process, if, in his or her opinion, the use of competitive sealed bidding is either not practicable or advantageous to the Commonwealth. The Department will create a standard Request for Proposal for Multiple Prime Contractors for Construction, along with standard Request for Proposal Guidelines. These documents may be modified with the approval of the Deputy Secretary for Public Works to address the unique circumstances of each project.

Under the Policy Determination, on or before the time identified in the RFP, each contractor submits its project proposal package to DGS. The proposal is to contain three sealed submissions. Contractors have to submit a sealed "cost" submission which includes a lump sum amount for which the contractor proposes to perform the work. Then, the contractors have to submit a "technical" submission which has the requirements set forth in the RFP. Finally, the contractors have to submit a sealed Disadvantaged Business Enterprise submission that includes the minority, women-owned or small disadvantaged business subcontractor participation with each contractor. The proposal is then reviewed by a DGS representative from the Office of Chief Counsel, a member of DGS' bidding unit and a representative for the Comptroller's Office to verify the proposal's compliance with the mandatory requirements of the RFP. Then the technical submission is reviewed by a Proposal Evaluation Committee consisting of five voting members appointed by DGS. Points are awarded to each element of each contractor's technical proposal. The contract is then awarded based on the cost (60%), a technical score on the competency of the contractor to perform the work (30%), and a disadvantaged business score (10%).

Unsuccessful proposers who wish to challenge the award are required to request a debriefing session within two business days of the notice of elimination or notice of selection, whichever is received first. Debriefings are then scheduled within five business days of receipt of the written request for a debriefing, but no later than seven days from the date of the notice of selection. Unsuccessful proposers are debriefed as to their own proposal, their "relative rank and the final scoring process," and the successful proposer's total cost. DGS does not disclose any information under the policy regarding the evaluation of the contract awardee's proposal.

If a prospective bidder desires to challenge the use of the RFP process rather than the use of the competitive sealed bids to award the contract, it can bring a challenge under Section 1711(a) of the Procurement Code which provides:

(a) Right to protest. -- A bidder or offeror, a prospective bidder or offeror or a prospective contractor that is aggrieved in connection with the solicitation or award of a contract, except as provided in section 521 (relating to cancellation of invitations for bids or requests for proposals), may protest to the head of the purchasing agency in writing.

(b) Filing of protest. -- If the protestant is a bidder or offeror or a prospective contractor, the protest shall be filed with the head of the purchasing agency within seven days after the aggrieved bidder or offeror or prospective contractor knew or should have know of the facts giving rise to the protest except that in no event may a protest be filed later than seven days after the date the contract was awarded..If a bidder or offeror, a prospective bidder or offeror or a prospective contractor fails to file a protest or files an untimely protest, the bidder or offeror, the prospective bidder or offeror or the prospective contractor shall be deemed to have waived its right to protest the solicitation or award of the contract in any forum. Untimely filed protests shall be disregarded by the purchasing agency.

However, under the Procurement Code, a bid protestor is not automatically entitled to a hearing. Section 1711.1(e) of the Procurement Code*fn7 specifies:

The head of the purchasing agency or his designee shall review the bid protest and any response or reply and may request and review such additional documents or information he deems necessary to render a decision and may, at his sole discretion, conduct a hearing. (Emphasis added.)

II.

Prompted by DGS' determination to use the RFP process for the renovation of the Foster Union Building at Cheyney University (Cheyney Project), ABC filed in its representative capacity in this court's original jurisdiction a petition for review alleging that the Request for Proposal method of awarding contracts set forth in Section 513 could not be used for construction contracts because those contracts could only be awarded through the competitive sealed bidding process under Section 511. ABC also alleged:

* Article III, Section 22 of the Pennsylvania Constitution required the use of competitive sealed bids for construction contracts;

* Even if the RFP procedure for construction contracts is permitted, it argues that the Department did not offer sufficient reasons for using that procedure rather than the default competitive bidding process;

* The "best value" policy statement was not promulgated in accordance with the Commonwealth Documents Law, Act of July 31, 1968, P.L. 769, ...


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