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CRIMINAL
LIABILITY FOR EVASION OF BIDDING REQUIREMENTS
ON
PUBLIC CONTRACTS
Jack W. Plowman*
A most unusual case relative to bidding on public contracts was
recently decided by the Commonwealth Court. The case, Commonwealth v.
Martz, 824 A.2d 403 (2003), concerned the criminal liability of public
officials for attempting to evade the requirement of bidding on public
contracts.
In the Martz case, the supervisors of a township were convicted of
evading the advertising and bidding requirements imposed by the Second
Class Township Code, and appealed. It appeared that the supervisors
desired to purchase a chipper for the township, the price of which was
$14,500. To evade the bidding requirements, the township made six (6)
payments of $1,800, traded in a snowplow of a value of $700, and made
a “buyout” payment of $3,000, thus totaling the $14,500 purchase
price.
The Second Class Township Code mandates bidding on purchases of
$10,000, or more, not including the value of any trade-in. Due notice
of the solicitation of bids must be made in one newspaper of general
circulation in the township on at least two occasions.
Under the arrangement, apparently the township purported to enter into
a lease, with rental payments of $1,800 each, and a “buyout” payment
of $700 at the end of the lease. On appeal, the supervisors contended
that the public bidding requirements were inapplicable because the
amount paid was less than $10,000.000, since the trade in value of the
snowplow should be disregarded. The Commonwealth Court rejected this
argument and affirmed the decision of the trial court.
A search for other cases in which public officials have seen charged
with a crime for failing to comply with the bidding requirements, has
turned up none other. In this instance, the proceeding was initiated
by a private complaint by an unidentified person.
Section 5432(d) of the General Municipal Law classifies the knowing
failure to seek bids as a misdemeanor of the third degree, and a
similar provision is to be found in Section 68102 of the Second Class
Township Code. Title 18, Pa. C.S.A. §1101, dealing with crimes,
provides that a fine of as much as $2,500 can be imposed on conviction
of a misdemeanor of the third degree and Section 1104 provides for
imprisonment of as much as one (1) year. The report of this decision
does not disclose the punishment imposed, sentencing not occurring
until exhaustion of appeal.
Certainly municipal officials will want to avoid prosecution for
evasion of the bidding requirements, and any one doing business with
the municipality should be aware of the dangers inherent in such an
unlawful act, lest one be charged as an accessory.
*Of counsel, Bentz Law Firm, P.C.; fellow, American
College of Trial Lawyers; member, American Bar Association Forum on
the Construction Industry; member, American Bar Association Fidelity
and Surety Committee; Member, National Bond Claims Association;
Adjunct Professor, Emeritus, Duquesne University School of Law,
Author, Pennsylvania Mechanics’ Liens (Professional Education Systems,
1989); Author, with K.W. Lee, Construction Contracting for Public
Entities in Pennsylvania (Lorman Education Services, 2002).
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