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Challenge Of Bids And Awards
Under The Procurement Code
Jack W. Plowman*
Prior to the adoption of the Procurement Code, 62 Pa. C.S.A., only a
taxpayer could challenge an award. This was changed by section 1711
of the Procurement Code, which permits disappointed bidders to
challenge an award.
The case of Balsbaugh v. Commonwealth Department of General Services,
815 A.2d 36 (Com. Ct. 2003) again considered the matter of standing
and also other interesting issues in respect to procedure.
In Balsbaugh, it appeared that employees of subcontractors to the
second low bidder filed a Petition for Review with the Commonwealth
Court relative to an award of a contract to a bidder who had failed to
sign the bid, although the bid was accompanied by a duly executed bid
bond.
After the bids were opened, the second low bidder (there were but two)
asked to see the low bid, but DGS improperly refused the request,
contrary to 4 Pa Code §69.4(d), which requires bids to be opened
publicly and to be available for examination. DGS issued a Notice of
Award and entered into a contract for performance of the work. A
Notice to Proceed was issued. The second bidder again requested to
see the bid, and this time DGS sent the requested information. Three
days later, the second low bidder protested the Award of Conduct,
which had already been entered into by DGS with the low bidder. The
objection was rejected and the second low bidder did not appeal. The
protestants (employees of a subcontractor) filed with the Commonwealth
Court a Petition for Review in the nature of a Complaint in Equity,
invoking the Court’s original jurisdiction. The Petition sought to
enjoin the award and the contract, and seeking to require the
rejection of the bid.
The Court held, in response to DGS’s challenge, that the Plaintiffs
had standing to bring the action. The Court pointed out that the
Procurement Code changed prior law by dispensing with the necessity
that, to have standing, the plaintiff must be a taxpayer. Now, under
Section 1711 of the Procurement Code, an aggrieved contractor or
bidder may challenge the solicitation or award of a contract.
Taxpayers still have relief available, as before.
In Balsbaugh, the bidder did not sign the bid, although a properly
executed bid bond accompanied the bid. The Court held, citing
Gaeta
v. Ridley School District, 567 Pa. 500, 788 A.2d 363 (2002), that a
defect cannot be waived where to do so would deprive the agency of its
assurance that the contract would be entered into. Here, the
signature was a vital part of the bid, and the submission of the
required bid bond did not cure the defect. The Court stated:
“…it makes no difference that the bid bond was signed because that is
an obligation on the part of the surety that the bidder will honor the
bid, but without the signatures on the bid, there’s no bid to honor.”
815 A.2d at 42.
A disappointed second low bidder is always well advised to review the
low bid to determine if it complies with the bidding instructions,
because errors in the bid documents are not uncommon, and a prompt
protest may well result in the rejection of an improper bid.
*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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