Interboro Packaging Corp. v. West Whiteland Twp.

CourtCommonwealth Court of Pennsylvania
DecidedJanuary 4, 2019
Docket473 C.D. 2018
StatusUnpublished

This text of Interboro Packaging Corp. v. West Whiteland Twp. (Interboro Packaging Corp. v. West Whiteland Twp.) is published on Counsel Stack Legal Research, covering Commonwealth Court of Pennsylvania primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Interboro Packaging Corp. v. West Whiteland Twp., (Pa. Ct. App. 2019).

Opinion

IN THE COMMONWEALTH COURT OF PENNSYLVANIA

Interboro Packaging Corporation, : Appellant : : No. 473 C.D. 2018 v. : Argued: December 11, 2018 : West Whiteland Township :

BEFORE: HONORABLE ROBERT SIMPSON, Judge HONORABLE PATRICIA A. McCULLOUGH, Judge HONORABLE CHRISTINE FIZZANO CANNON, Judge

OPINION NOT REPORTED

MEMORANDUM OPINION BY JUDGE SIMPSON FILED: January 4, 2019

In this appeal involving a publicly bid contract, Interboro Packaging Corporation (Interboro) asks whether the Court of Common Pleas of Chester County (trial court) erred in denying its post-trial motions following a non-jury trial. The trial court found in favor of West Whiteland Township (Township) and against Interboro on Interboro’s breach of contract suit and in favor of the Township on its counterclaim for breach of contract. The trial court also awarded the Township attorney fees and expenses. The litigation arose out of Interboro’s failure to provide the Township with trash bags that conformed to the specifications set forth in the Township’s request for proposals (RFP). Upon review, we affirm on the trial court’s opinions.

I. Background The trial court made the following findings of fact. Interboro is a corporation engaged in the business of selling and distributing plastic liners and trash bags in 48 states. In August 2013, the Township issued an RFP, Specification Number 2013-17, for 400,000 trash bags for use in its existing “Pay as You Throw” municipal trash and recycling program. The RFP required bidders to comply with the following specifications:

(a) Size - 30" wide by 37" long, 33 gallon plastic trash bags

(b) Color - Black bag with white printed logo

(c) Resin - Linear Low Density, 100% virgin Hexene

(d) Thickness - 1.9 mils (minimum)

(e) Seal - Flat seal

(f) Printing

(i) Logo on all bags shall have printing on one side in repeating pattern.

(ii) Printing color shall be white.

(iii) Lettering 10" high x 19" wide from beginning of first W to end of T.

(iv) Each letter width is 1½" thick.

(v) 1" wide vertical stripe on both ends of bag indent 3" from center of stripe to edge of bag. Stripe shall be from top of bag to bottom of bag. See attached picture.

(g) Packaging - Bags shall be individually cut and packaged flat in quantities of 200 per case. All cases shall be made of sturdy cardboard.

(h) Twist Ties - Each case shall contain a minimum of 200 twist ties. Ties shall be wire encased in a paper covering and shall be perforated for easy separation.

2 (i) Quantity - Bid process shall be based upon 400,000 bags to meet specifications.

Tr. Ct. Dec., 8/28/17, Finding of Fact (F.F.) No. 5 (quoting Ex. P-1) (underlined emphasis added) (bolded emphasis in original).

The RFP required each bidder to submit a minimum of 20 sample bags to the Township for review and inspection prior to an award of the contract. The sample bags were required to meet the specifications and be representative of the bags the bidder would supply if awarded the contract. The RFP also stated that the Township reserved the right to require a 90-day evaluation period to determine the quality of the bags and if the bags did not meet the Township’s standards and expectations, the contract would be terminated and any unused bags would be returned to the bidder at the bidder’s expense. Further, the bidder would be required to reimburse the Township for the full cost of the unused quantity of bags.

On August 20 and 26, 2013, Interboro submitted bids in response to the RFP through PennBid (“Pennsylvania’s Electronic Document & Bid Management Program”). Ex. P-2. Interboro’s bids were for Super Hexene trash bags, as per sample #1, at a price of $22.82 per case or $45,640. The cost to Interboro to buy the bags from its supplier, Inteplast Group, LTD. (Inteplast) was $19.59 per case or $39,180. This price was for 1.5 mil trash bags, which Interboro used as the basis for its bid, intentionally ignoring the 1.9 mil minimum thickness requirement. Interboro initially requested pricing from Inteplast on 1.9 mil bags that actually satisfied the RFP’s specifications. The cost to Interboro would have been $24.82 per case or $49,640 for bags with a thickness of 1.9 mils.

3 Including Interboro, a total of four bidders responded to the RFP. Assuming all other bidders submitted bids based on bags that actually complied with the 1.9 mil minimum thickness specification, while Interboro undisputedly submitted a bid that was based on thinner and cheaper-to-manufacture bags, Interboro knowingly tainted the entire bidding process to win the contract. At no time in the bidding phase did Interboro advise the Township that the 1.9 mil specification was thicker than needed. Nor did Interboro advise the Township that it would provide a bag that was less than 1.9 mils thick. Interboro submitted at least 20 sample trash bags as part of its bid. In addition to the sample bags, Interboro sent the Township a “Sample Bag Compliance Letter” (sample letter), which stated:

All shipments made consistent with the enclosed samples will be deemed in full conformance with bid specifications. We are relying upon approval of these samples for compliance of [our] bid and will ship only such bags, in the specified size/color. Acceptance of our bid shall conclusively constitute approval of the enclosed samples as [in] conformity with bid specifications.

F.F. No. 18 (citing Ex. P-5).

Abraham Jeremias, Interboro’s President (Interboro’s President), testified he made the decision to send the Township sample bags that he knew were less than 1.9 mils thick despite knowing that the RFP specifications called for 1.9 mil thick bags.

On August 27, 2013, Denise Serino, the Township’s Purchasing Agent, wrote a memorandum to Michael Cotter, Township Manager, and Cathy

4 Kleponis, the Township’s Finance Director, recommending that the Township Board of Supervisors award the contract to Interboro, the lowest bidder. The contract covered a two-year supply of trash bags in the amount of $22,820 in 2013 and $22,820 in 2014 for a total of $45,640. Purchasing Agent’s memorandum indicated that Township staff tested all the bags submitted with the bids. Before, during, and after the testing, Purchasing Agent took great care to ensure the bags received from each bidder were kept in the envelope in which they were sent and were never mixed with others. The trial court found that the Township elicited significant, credible testimony regarding the chain of custody of the sample bags from receipt through testing and trial.

Conversely, the trial court explained, Interboro did not produce Malky Weiss, the employee who actually sent the now-contested sample bags to the Township. Interboro’s only “evidence” questioning the chain of custody of the bags was the testimony of its President and its representative, Rachel Loeb (Interboro’s representative), who simply testified in a conclusory manner that the bags in the envelope marked as Exhibit D-38 were not and could have come from Interboro. F.F. No. 24.

The Township’s Public Works Director and Assistant Public Works Director performed rudimentary testing on the sample bags, and Purchasing Agent recorded the ratings, based on the Township’s system. The purpose of the testing process was to ensure the bidder’s bags were as good as or better than the bags the Township was presently using.

5 Ultimately, the Township awarded the contract to Interboro. Interboro sent a letter to the Township dated October 1, 2013 (waiver letter), which acknowledged receipt of the contract and stated that the samples provided during the bidding process would serve as “the benchmark for all tests and future inspections of the quality and strength of the liners provided.” F.F. No. 28 (citing Ex. P-7).

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Bluebook (online)
Interboro Packaging Corp. v. West Whiteland Twp., Counsel Stack Legal Research, https://law.counselstack.com/opinion/interboro-packaging-corp-v-west-whiteland-twp-pacommwct-2019.