On his blog PhillyDeals, Joe Distefano reports that the non-profit Center City District has hired Gilbane to review bids for the taxpayer funded $50 million plan to renovate Dilworth Plaza from a concrete jungle to a place you actually want to go.  So far so good.  However, although taxpayer funds are being used to renovate public property Joe pointed out this tidbit:

“By using the nonprofit District to run the process, the project avoids public bid procedures.”

Jump back.  Sensing this did not pass the smell test I ran this by my friend and public contracts lawyer Chris McCabe.  Chris, a former City attorney, suggested I check out the City Charter on public bid procedures.

Section 8-200 clearly states that any construction contract for construction work rendered to the City be competitively bid.  Moreover, Section 17 of the City Charter sets forth various requirements that contractors working on City projects must abide by, such as, bonding requirements, minority participation requirements, conflicts and ethics requirements, and prevailing wage laws.

The Charter does not define the terms “public works” or “services to the City.”  However, one does not have to strain the statutory construction of the City Charter to conclude that the Charter’s public bid and public contractor requirements apply to a project being developed using taxpayer funds on City owned land.  Furthermore, if all the City had to do to avoid its public works contracting requirements is have a non-profit run the job, then what is the purpose of having public works contracting laws to being with?

Because the Dilworth Plaza is City owned property and the project will certainly be for a purely public purpose subcontractors working on the job will have no mechanics lien rights.  Moreover, if the public works contracting procedures do not apply, then neither does the requirement that the general contractor for the project post a labor and material payment bond, the purpose of which is to guaranty payment to subcontractors in the absence of mechanics lien rights.  Thus, subcontractors working on the Dilworth Plaza project will be left with no payment security although taxpayer funds are being used to pay for it.

Any contractor interested in working on this job should be wary of the bid process the City is employing.  Subcontractors in particular should be concerned with the potential lack of any payment security.  General contractors bidding to be the lead contractor on the project should consider a challenge to the bid procedures.   Heck, as an aggrieved City of Philadelphia taxpayer, who’s money will be used to pay for the project, maybe I will.


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