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Perrotto Builders, Ltd. v. Reading Sch. Dist. & Lobar, Inc.

Commonwealth Court of Pennsylvania

January 9, 2015

Perrotto Builders, Ltd., Appellant
v.
Reading School District and Lobar, Inc

Argued December 8, 2014

Joel C. Hopkins and Cory S. Winter, Harrisburg, for appellant.

John J. Miravich, Reading, for appellee Reading School District.

Diane M. Tokarsky, Harrisburg, for appellee Lobar, Inc.

BEFORE: HONORABLE BONNIE BRIGANCE LEADBETTER, Judge, HONORABLE ROBERT SIMPSON, Judge, HONORABLE MARY HANNAH LEAVITT, Judge.

OPINION

Page 176

MARY HANNAH LEAVITT, Judge

Perrotto Builders, Ltd. (Perrotto) appeals the order of the Berks County Court of Common Pleas (trial court) that denied its request for a preliminary injunction to stop the implementation of a construction contract to renovate several school buildings in the Reading School District (School District). Perrotto contends that the School District did not adhere to the terms of its own bidding procedures because it changed the stated basis for awarding the contract after the bids were opened. The trial court refused to grant the preliminary injunction for several reasons. Chief among them was its finding that the School District did, in fact, follow the terms of its bid procedures. The gravamen of the trial court's decision was that Perrotto was not likely to prevail on the merits of its permanent injunction request and, further, that the grant of the preliminary injunction was more likely to cause harm than the harm that would be caused by its refusal. We affirm.

On October 15, 2013, the School District issued an Invitation to Bid for a " Miscellaneous Building Renovation & Repairs Project." There were two parts to the project which the School District identified as the " Group A" contract and the " Group B" contract. The Group A contract involved renovations to five elementary schools, two middle schools and one high school. It is this part of the project that generated the instant litigation.

The School District developed a 24-page form and a number of instructional documents for the submission of bids for the Group A contract.[1] The submission form required the bidder to provide a separate " base bid" and " alternate bids" for each of the eight schools. The base bid covered the work requested by the School District on a particular school building. The alternate bids were items that the School District could choose to add or deduct from the individual school project after opening the bids. The " total base bid" consisted of the sum of the eight individual bids for the Group A contract. Reproduced Record at 26a (R.R. ). The bidding document also stated that " [the School District] may cho[o]se not to proceed with construction work at one or more of the above locations

Page 177

based on the collective value of bids received." Id.

On December 17, 2013, the School District opened the bids and determined that Perrotto was the lowest bidder based on its total base bid for the Group A contract. However, the combined lowest bids for both the Group A and Group B contracts exceeded by $1.4 million the School District's budget of approximately $40 million. Accordingly, the School District had to revise the project, and its cost had to be reduced by more than $1.4 million.

John George, the executive director of the Berks County Intermediate Unit and superintendent of record for the School District,[2] testified at the preliminary injunction hearing about the School District's serious financial challenges. He explained that because of the School District's poor bond rating, it is not likely to be able to issue new bonds for the next seven to ten years. As a result, the School District needed to retain $7 million, out of the $40 million available, as a reserve for essential repairs that were expected to arise over the next seven to ten years. This reserve reduced the amount available for ...


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