106 A.3d 810
Pa. Commw. Ct.2014Background
- The Department of Community and Economic Development issued an RFQ to contract a third party to design, market, and implement the sale of up to $100 million in insurance-premium tax credits under the Innovate in PA Tax Credit Act.
- RFQ required three sealed submittals (technical, small diverse business, cost) and stated an offeror must score at least 70% on the technical submittal to be considered a "responsible" offeror eligible for selection or negotiations.
- Three proposals were submitted (Grant Street, Atex Petros, Tax Credit Brokerage). Only Atex Petros scored above 70% on the technical submittal; Grant Street scored 62.1%.
- The Department did not review cost submittals for Grant Street or Tax Credit Brokerage and awarded the contract to Atex Petros as the sole responsible offeror. Grant Street protested and the Department issued a Final Determination denying the protest.
- Grant Street sought judicial review, arguing the Department violated 62 Pa.C.S. § 513(g) by failing to take price into account when the 70% threshold eliminated all but one bidder. The Court considered timeliness/waiver and the merits.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Timeliness of bid protest | Grant Street filed within seven days after it learned Department only reviewed one cost submittal; protest thus timely | Department argued protest was untimely and should have been filed earlier | Protest was timely: Grant Street filed within seven days of learning the relevant facts and within seven days after award |
| Waiver of argument that 70% threshold improperly eliminated bidders | Grant Street argued Department improperly applied the threshold to avoid considering price; effectively preserved by protest statements | Department argued Grant Street failed to raise this specific threshold argument below and thus waived it | Court ruled the threshold argument was subsumed in Grant Street's broader protest about failure to consider cost and was not waived |
| Whether Section 513(g) required comparing prices of all bidders even if only one deemed responsible | Grant Street argued § 513(g) requires taking price into account among responsible bidders and Department improperly avoided price comparison by eliminating other bidders via the 70% rule | Department argued only responsible offerors’ prices must be compared; RFQ legitimately defined responsibility by a 70% technical cutoff | Court held § 513(g) requires considering price among responsible offerors but does not force reconsideration of an offeror deemed non-responsible; applying the announced 70% responsibility threshold and considering only Atex Petros’ cost was permissible |
| Validity of using a 70% technical threshold to define "responsible offeror" | Grant Street contended applying the threshold to eliminate competition here was improper (but did not argue threshold per se unlawful) | Department maintained agencies may set criteria to determine responsibility and RFQ clearly stated the 70% rule | Court held procurement law does not prohibit using announced responsibility criteria; the RFQ’s 70% cutoff was an acceptable, disclosed criterion and Grant Street bid subject to it |
Key Cases Cited
- Cummins v. Department of Transportation, 877 A.2d 550 (Pa. Cmwlth.) (timeliness depends on when protestant knew or should have known protest facts)
- Omnicare, Inc. v. Department of Public Welfare, 68 A.3d 20 (Pa. Cmwlth.) (post-award protest timely when factual basis arose at debriefing)
- Common Sense Adoption Servs. v. Department of Public Welfare, 799 A.2d 225 (Pa. Cmwlth.) (protest of RFP terms must be raised promptly or is waived)