I planned a course for the Philadelphia Bar Association today called “Public Bidding and Bid Protest – A Primer on Pennsylvania Law.” A special thanks to my friend Chris McCabe – who has been mentioned before on this blog – for a thorough and interesting presentation. Chris is a “Dean” on public contracting law. Here are few takeaways from the course.
1. Pennsylvania law requires public contracts to be awarded to the lowest responsive, responsible bidder.
First, a bidder must ensure that it has complied with all material terms of the bid specifications and instructions. Second, a bidder must be qualified to perform the work – i.e. having performed work on similar projects, be financial sound, and otherwise capable of handling the work contracted.
2. A Local Contracting Authority Has the Right to Waiver Certain Non-Material Bid Defects.
Under Pennsylvania law, an authority may waive non-material defects. Some examples of “material” defects include, missing signatures, missing bid bonds, or prices. Some examples of “non-material” defects include missing forms or attaching bid bonds with the wrong ratings.
In Gaetna v. Ridley School District, 788 A.2d 363 (Pa.2002) the Pennsylvania Supreme Court articulated a test for determining whether a bid defect is material or non-material. First, the Court must consider whether the defect deprived the government of assurance that the contract would be performed. Second, the Court must consider whether the waiver will give one bidder a competitive advantage over another bidder.
On close calls, Courts are apt to side with the local authorities and give them the discretion to waive defects in bids.
3. Challenges to Bids.
Taxpayers have standing to challenge the responsiveness of a bid or whether the winning bidder is a qualified bidder. Disapointed bidders to not have standing to challenge bids unless they are also taxpayers. A bid may be challenged by filing suit in Common Pleas Court asking the Court to issue an injunction preventing the contract from being awarded. In the case of a contract award that has already occured, a taxpayer can ask that the Court to void the award.