103 A.3d 1091
Md. Ct. Spec. App.2014Background
- DGS issued an RFP (CM at Risk) for a new Cheltenham juvenile detention facility that listed a Project Labor Agreement (PLA) as the 6th of seven technical evaluation factors.
- Several large contractors (Appellants) filed a pre-award protest arguing the PLA factor (1) created a new procurement preference requiring APA rulemaking and (2) unlawfully restricted competition against non‑union contractors.
- DGS amended the RFP by addenda: removed prior-PLA‑experience requirement, clarified PLA was not mandatory, required PLAs to prohibit discrimination based on union membership, and softened consequences for failing to furnish a PLA.
- The procurement officer denied the protest; the Maryland State Board of Contract Appeals (MSBCA) affirmed, finding the PLA factor was a one‑time pilot (not a regulation) and was reasonably related to State needs; the circuit court affirmed; appellants appealed.
- The Court of Special Appeals held de novo that a novel specification in a single RFP is not a “regulation” under the Maryland APA and that substantial evidence supported MSBCA’s conclusion that the PLA factor did not unduly restrict competition and encouraged maximum practicable competition.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether adding a PLA evaluation factor to the RFP required formal rulemaking under the Maryland APA | Inclusion of PLA is an unprecedented procurement policy with general application/future effect and thus a "regulation" that required notice‑and‑comment rulemaking | Single, project‑specific use of a PLA is a pilot/one‑off that lacks general application or future effect and therefore is not a regulation | Court: Single RFP specification is not a regulation; no APA rulemaking was required |
| Whether the PLA factor unlawfully restricted competition in violation of procurement law (maximizing practicable competition) | PLA factor coerces offerors to adopt PLAs, discriminates against non‑union contractors, and unduly limits competition | PLA was non‑mandatory, low‑weighted (6th factor), required anti‑discrimination language, and reasonably related to State needs for project stability, safety, and labor predictability | Court: Substantial evidence supports MSBCA’s finding that PLA factor did not unduly restrict competition and was reasonably related to agency needs |
Key Cases Cited
- Schwartz v. Maryland Dep’t of Natural Resources, 385 Md. 534 (agency conclusions of law reviewed de novo)
- Consumer Publ’g v. Consumer Protection Div., 304 Md. 731 (agencies may proceed case‑by‑case without rulemaking in some contexts)
- Md. Ass’n of Health Maint. Orgs. v. Health Servs. Cost Review Comm’n, 356 Md. 581 (pilot/experimental agency policies need not be promulgated as regulations)
- Balt. Gas & Elec. v. Pub. Serv. Comm’n, 305 Md. 145 (agency explanation of standards not always subject to rulemaking)
- CBS, Inc. v. Comptroller, 319 Md. 687 (contrast: agency adoption of substantially new, generally applicable policy requires rulemaking)
- Bldg. & Const. Trades Council v. Associated Builders & Contractors (Boston Harbor), 507 U.S. 218 (PLAs are permissible in public construction procurements)
- Dep’t of Health & Mental Hygiene v. Chimes, 343 Md. 336 (APA notice‑and‑comment requirements and principles)