Pennsylvania Associated Builders & Contractors, Inc. v. Commonwealth Department of General Services

932 A.2d 1271, 593 Pa. 580, 2007 Pa. LEXIS 2175
CourtSupreme Court of Pennsylvania
DecidedOctober 17, 2007
Docket71 MAP 2006
StatusPublished
Cited by47 cases

This text of 932 A.2d 1271 (Pennsylvania Associated Builders & Contractors, Inc. v. Commonwealth Department of General Services) is published on Counsel Stack Legal Research, covering Supreme Court of Pennsylvania primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Pennsylvania Associated Builders & Contractors, Inc. v. Commonwealth Department of General Services, 932 A.2d 1271, 593 Pa. 580, 2007 Pa. LEXIS 2175 (Pa. 2007).

Opinions

OPINION

Chief Justice CAPPY.

In this appeal, we review the Commonwealth Court’s Order, granting partial summary judgment to the appellee, Pennsylvania Associated Builders and Contractors, Inc. (“ABC”), and enjoining the appellant, the Commonwealth Department of General Services (“DGS”), from using the competitive sealed proposal process set forth in Section 513 of the Commonwealth Procurement Code (“Procurement Code” or “Code”), 62 Pa.C.S. § 513, for certain future construction projects. For the reasons stated below, the Order of the Commonwealth Court is reversed, and this case is remanded to the Commonwealth Court for further proceedings consistent with this opinion.

The record on summary judgment is as follows. In May of 1913, the General Assembly enacted a statute, commonly referred to as the Separations Act, which governs the letting of certain contracts for the erection, construction, and alteration of any public building. Act of May 1, 1913, P.L. 155, No. 104 § 1. Under the Separations Act, when the total cost of the project exceeds $4,000, those who secure the plumbing, heating, ventilating, and electrical work are duty-bound to prepare separate specifications, receive separate bids, and award separate contracts to the lowest responsible bidder for each of these branches. 71P.S. § 1618.1,2

[584]*584In May of 1998, the General Assembly enacted the Procurement Code, which governs the procurement of supplies, services, and construction for the public. Act of May 15 1998, P.L. 358 No. 57 § 1 (“Act 57”).3 In establishing the Code, Act 57 provides that nothing in it repeals or modifies or supplants the Separations Act, except as explicitly stated in one of the Code’s provisions, 62 Pa.C.S. § 322(6). Section 6(d) of Act 57 of 1998, P.L. 358.4

[585]*585In turn, Section 322(6) provides that DGS is not required to comply with the Separations Act for construction contracts that cost less than $25,000, but that all projects equal to or exceeding $25,000 are subject to the statute. 62 Pa.C.S. § 322(6).5

Under the Code, DGS is responsible for procuring or supervising the procurement of all supplies, services or construction needed by Commonwealth agencies for which it acts as purchasing agent. 62 Pa.C.S. § 321(a). In order to execute its responsibilities, the Code authorizes DGS to formulate policy and enter into contracts. 62 Pa.C.S. §§ 103, 301, 311-312, 322. In the Code, the word “contract” is defined as follows:

§ 103. Definitions
Subject to additional definitions contained in subsequent provisions of this part which are applicable to specific provisions of this part, the following words and phrases when used in this part shall have the meanings given to them in this section unless the context clearly indicates otherwise:
[586]*586Contract. A type of written agreement, regardless of what it may be called, for the procurement or disposal of supplies, services or construction and executed by all parties in accordance with the act of October 15, 1980 (P.L. 950, No. 164), known as the Commonwealth Attorneys Act.

62 Pa.C.S. § 103 (footnote with Purdons citation omitted).

Since Section 511 of the Code states that all Commonwealth agency contracts shall be awarded by competitive sealed bidding under Section 512, unless otherwise provided by law and except as provided for in specified Code exceptions, DGS uses the competitive sealed bidding process set forth in Section 512 to award construction contracts. 62 Pa.C.S. § 511. Under Section 512, DGS issues an invitation for bids and awards the contract to the lowest responsible bidder. 62 Pa.C.S. § 512(b),(g).6

One of the exceptions to Section 512 listed in Section 511 is Section 513. 62 Pa.C.S. §§ 511, 513.7 Under Section 513, [587]*587DGS may determine whether the use of competitive sealed bidding under Section 512 is either not practicable or advantageous to the Commonwealth. 62 Pa.C.S. § 513(a). If so, DGS solicits proposals from offerors by issuing a request for proposals [“RFP”], and selects for contract negotiation the offeror who submits the responsive proposal that is determined to be most advantageous to DGS, taking price and other evaluation factors into account. 62 Pa.C.S. § 513(b),(g).

Under a policy determination made in April of 2005, DGS considers use of Section 513 for the procurement of contracts for complex construction projects or those with allocations in excess of $5,000,000. In this regard, DGS developed a competitive sealed proposal process referred to as the “RFP process,” which is described in two documents that DGS distributed, the “Standard Request for Proposals for Multiple Prime Contractors for Construction” (“Standard RFP”) and the “Request for Proposals Guidelines” (“RFP Guidelines”).8

[588]*588ABC is an association comprised of general contractors who are incorporated in or doing business in the Commonwealth, or both. On October 11, 2005, ABC filed a Petition for Review in the Nature of a Complaint in Equity against DGS in the Commonwealth Court. In its complaint, ABC alleged that because DGS’s use of the RFP process results in the award of construction contracts to someone other than the lowest responsible bidder it is unlawful under the Pennsylvania Constitution, Pa. Const. Art. III, § 22; the Separations Act, 71 P.S. § 1618, the Procurement Code, 61 Pa.C.S. §§ 511, 513, DGS regulations, 4 Pa.Code § 69.6; and the common law.9 ABC further alleged the RFP process was implemented in a manner that violated the Commonwealth Documents Law, 45 P.S. § 1201, et seq.; conflicts with Section 513’s requirements; and thwarts the rights of meaningful protest that the Procurement Code gives to those who are not selected for contract negotiation, 62 Pa.C.S. § 1711.1. ABC requested that DGS be preliminarily and permanently enjoined from using the RFP process or any other process that does not award construction contracts to the lowest responsible bidder.

In response to ABC’s Petition for Review, DGS filed preliminary objections, raising ABC’s lack of standing, failure to exhaust administrative remedies, and failure to state a claim upon which injunctive relief can be granted. By Order dated February 23, 2006, the Commonwealth Court denied DGS’s preliminary objections, and DGS filed its Answer with New Matter.

On March 15, 2006 and March 25, 2006, ABC and DGS filed cross motions for partial summary judgment, respectively. The motions raised the same threshold issue — whether DGS may use the competitive sealed proposal process set forth in [589]*589Section 513 of the Code for the procurement of construction contracts. 62 Pa.C.S. § 513.10 The Commonwealth Court en banc addressed this threshold issue in a published opinion and order, and held that DGS may not procure construction contracts through the competitive sealed proposal process because Section 513 does not apply to construction contracts. Pennsylvania Associated Builders and Contractors, Inc. v. Commonwealth, Department of General Services,

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Bluebook (online)
932 A.2d 1271, 593 Pa. 580, 2007 Pa. LEXIS 2175, Counsel Stack Legal Research, https://law.counselstack.com/opinion/pennsylvania-associated-builders-contractors-inc-v-commonwealth-pa-2007.