CLEARWATER CONSTRUCTION, INC. and Northampton County Bridge Partners, LLC, Appellants v. NORTHAMPTON COUNTY GENERAL PURPOSE AUTHORITY, Northampton County Department of Community and Economic Development, and Kriger Construction, Inc.
No. 1658 C.D. 2016
Commonwealth Court of Pennsylvania.
Argued June 8, 2017 Decided July 10, 2017
513
3. The Majority suggests that Claimant has not raised the question of Employer‘s bad faith,
David A. Levine, Pittsburgh, for appellants.
Steven E. Hoffman, Allentown, for appellee Northampton County General Purpose Authority.
James W. Kutz, Harrisburg, for appellee Kriger Construction, Inc.
BEFORE: HONORABLE RENÉE COHN JUBELIRER, Judge, HONORABLE JULIA K. HEARTHWAY, Judge, HONORABLE DAN PELLEGRINI, Senior Judge
OPINION BY JUDGE COHN JUBELIRER
Clearwater Construction, Inc. and Northampton County Bridge Partners, LLC (Clearwater, collectively) appeal from an October 3, 2016 Order of the Court of Common Pleas of Northampton County (common pleas), which found Clearwater lacked standing to challenge a contract awarded under the Public-Private Transportation Partnership Act (P3 Act),
In April 2016, the Northampton County General Purpose Authority (Authority), on behalf of the Northampton County Department of Community and Economic Development (County), issued a Request for Proposals (RFP) for the Northampton County Bridge Renewal Program (Bridge Program), which called for replacement, rehabilitation, and/or maintenance of 33 bridges located in Northampton County. The RFP was issued under the P3 Act. Clearwater1 and Kriger Construction, Inc. (Kriger) were among four offerors who responded to the RFP and submitted pro-
On September 19, 2016, Clearwater commenced this action by filing a Petition and Claim Pursuant to
A hearing on the preliminary injunction request was scheduled for September 29, 2016, but common pleas initially heard argument on the preliminary objections because they raised a jurisdictional issue. Following oral argument and briefing, common pleas issued an Order on October 3, 2016, finding Clearwater lаcked standing, denying Clearwater‘s motion for injunctive relief, and dismissing the action. This appeal followed.
Whether a party that bids on a municipal project governed by the P3 Act but is ultimately not chosen for the project has standing to challenge the propriety of the selection process is a matter of first impression. The P3 Act is a lesser known and used procurement process, which our Court has only once before had occasion to addrеss, albeit in the context of the Right-to-Know Law (RTKL).2 See Dep‘t of Transp. v. Walsh/Granite JV, 149 A.3d 425 (Pa. Cmwlth. 2016). There, we compared the P3 Act with the better known Procurement Code (Code),
Under the Procurement Code, contracts are output-based, where the public sector owner identifies the exact outputs required through detailed specifications. Each phase of the project is procured separately and multiple contracts pertaining to that phase may be awarded. Contracts arе awarded in stages: companies bid on the design; once the design is completed, a contract is awarded for construction; once construction is completed, it becomes the public entity‘s maintenance responsibility. Because the Procurement Code process is output-based, most of the risks associated with normal procurement contracts are assumed by the public sector entity. Usually, each project is financed directly by government through capital contributions or debt. . . .
The P3 [Act] presents an alternative method to [that] set forth in the Procurement Code to build or maintain public infrastructure. Under the P3 [Act], procurement of two or more of the project delivery phases can be integrated and those methods may involve anything from designing and constructing to operating, maintaining and financing the project. Moreover, P3 contracts have outcome-based specificаtions, meaning that the public sector owner specifies its requirements and the private sector partner determines the best way to meet them. Typically, in a P3 contract, the public sector partner would be responsible for securing its own financing, with the private sector partner financing the upfront capital costs and then recovering its investment over the term of the P3 agreement. Also, the private sector party assumes substantial financial, tеchnical and operational risk, and a Public-Private Transportation Partner-
ship Board was created to oversee the process and select P3 projects.
Id. at 430 (citations omitted).
Under
Clearwater maintains
If a development entity is aggrieved by a selection under this section and the proprietary public entity in the contract is an entity other than the Commonwealth, a development entity may file a claim with the court of common pleas where the proprietary public entity is located. The process for the filing and resolution of claims, including rights, contents, timing, evaluation, determination and remedies, which are established in
62 Pa. C.S. Ch. 17 , shall apply insofar as they are practicable.
“The core concept of standing is that ‘a party who is not negatively affected by the matter he seeks to challenge is not aggrieved, and thus, has no right to obtain judicial resolution of his challenge.‘” In re Milton Hershey School, 590 Pa. 35, 911 A.2d 1258, 1261 (2006) (quoting City of Phila. v. Commonwealth, 575 Pa. 542, 838 A.2d 566, 577 (2003)). Absent a statutory provision, a disappointed bidder lacks standing because he has no property interest in a public contract and, therefore, has suffered no injury that would entitle him to redress in court. Black Ash Servs., Inc. v. DuBois Area Sch. Dist., 764 A.2d 672, 674 (Pa. Cmwlth. 2000); James T. O‘Hara, Inc. v. Borough of Moosic, 148 Pa.Cmwlth. 535, 611 A.2d 1332, 1333 (1992); J.P. Mascaro & Sons, Inc. v. Bristol Twp., 95 Pa. Cmwlth. 376, 505 A.2d 1071, 1073 (1986). A bidder that is an aggrieved taxpayer of the municipality awarding the contract has standing, however. Black Ash, 764 A.2d at 674.
On appeal,3 both parties argue the plain language of the P3 Act controls, but disagree as to what the plain language means and focus on different terms in
As stated above, disappointed bidders on municipal projects generally lack standing to challenge the selection process unless a statutory provision provides them with a private cause of action. Black Ash, 764 A.2d at 674; O‘Hara, 611 A.2d at 1333; Mascaro, 505 A.2d at 1073. We, therefore, must examine the P3 Act to determine whether it confers such a right оn Clearwater. Because this matter involves an issue of statutory interpretation, our analysis is guided by the principles of the Statutory Construction Act of 1972,
With these principles in mind, we begin with the plain language of the P3 Act. Clearwater filed its Petition pursuant to
The Authority and Kriger argue that Clearwater does not meet that statutory definition. Clearwater acknowledges it is not a party to such an agreement but counters that the introduсtion to the definition section indicates that the definition controls “unless the context clearly indicates otherwise.” See
We agree with Clearwater that context is important. Our Supreme Court has cautioned against interpreting statutory words in isolation, urging instead that we read them in reference to the context in which they appear. Roethlein, 81 A.3d at 822. Therefore, it is necessary to examine the context in which “development entity” is used in
However, when intеrpreting a statute, we must give effect to all of the words of a statute. Governor‘s Office of Admin. v. Purcell, 35 A.3d 811, 820-21 (Pa. Cmwlth. 2011). Here,
When the language of a statute is ambiguous, such as here, the Court may consider, among other matters: (1) the occasion and necessity for the statute; (2) the circumstances under which it was enacted; (3) the mischief to be remedied; (4) the object to be attained; (5) the former law, if any, including other statutes upon the same or similar subjects; (6) the consequences of a particular interpretation; (7) the contemporaneous legislative history; and (8) legislative and administrative interpretations of the statute.
Here, Clearwater argues that, even if the Court detеrmines the language of the P3 Act is ambiguous, it still must prevail when these extrinsic factors are considered. First, it once again argues potential development entities would be otherwise foreclosed from challenging the selection process, which the “occasion and necessity” of the statute requires. Second, given the magnitude of public-private partnership agreements, both in terms of cost and time, the circumstances under which the P3 Act was enаcted requires entities, like itself, to be permitted to scrutinize the selection process. Third, mischief would result if offerors who are not selected could not challenge the fairness, openness, and transparency of the selection process. Fourth, it argues the legislative history is of limited assistance because lawmakers held no substantive discussions regarding amendments to pertinent provisions of the P3 Act. Finally, Clearwater argues that
According to the Authority and Kriger, if the statute is found to be ambiguous, several factors demonstrate the General Assembly‘s intent to limit standing in
When extrinsic fаctors are taken into consideration, it becomes clear that the General Assembly intended the statutory definition of “development entity” to control in
If a prospective offeror, offeror or development entity is aggrieved by a selection under this section and the public entity or proprietary public entity in the invitation or contract is a Common-
wealth agency, the prospective offeror, offeror or development entity may file a protest or a claim, as appropriate, in accordance with 62 Pa.C.S. Ch. 17 (relating to legal and contractual remedies).
It is apparent from this terminology that the General Assembly intended this section to be broader than
This conclusion is reinforced by an examination of the P3 Act‘s legislative history. In November 2011, the House of Representatives amended the then-proposed bill to replace thе original definition of “development entity,” which was broader and included those bidding or responding to a solicitation, to the current, enacted definition. H.R. 3, 159th Gen. Assemb. (Pa. 2011), Supplemental Reproduced Record (S.R.R.) at 21b-22b.
At that time, Section 9110(n),5 governing controversies not involving the Commonwealth, provided as follows:
If a prospective offeror, offeror or development entity is aggrieved by a selection under this section and the public entity or proprietary public entity in the invitation or contract is аn entity other than the Commonwealth, a prospective offeror, offeror or development entity may file a protest or a claim, as appropriate, with the court of common pleas where the public entity or proprietary public entity is located.
Id., S.R.R. at 42b (emphasis added). However, by February 2012, the House amended the section, striking the above language, in its entirety, and replacing it with the current language of
Clearwater argues that the legislative history is of limited value as there is no substantive discussion regarding the change in language. We agree that it would have been ideal to have discussion so we cоuld understand the logic behind the changes, but disagree that the changes are meaningless. “A change in the language of a statute ordinarily indicates a change in legislative intent.” Meier v. Ma-leski, 670 A.2d 755, 759 (Pa. Cmwlth. 1996). We have held that “the legislature‘s deletion of statutory language renders the language inoperative and indicates that the legislature has admitted a different intent.” Id. Here, the General Assembly‘s conscious decision to amend the bill to exclude offerors from bringing a claim against a non-Commonwealth entity, while allowing them to pursue protests against the Commonwealth, is strong evidence of its intent to distinguish the two. It also is evidence that if the legislature wanted to include offerors in
Clearwater urges that its construction of the P3 Act must be given effect because the General Assembly could not have intended this result. We note, however, that under the common law, disappointed bidders similarly lacked standing to challenge the propriety of the bid process, unless they were taxpayers. Black Ash, 764 A.2d at 674; O‘Hara, 611 A.2d at 1333; Mascaro, 505 A.2d at 1073. It is also consistent with the Procurement Code. Although there are differences between the procurement processes found in the P3 Act and Procuremеnt Code, the differences are not so great as to override the plain language of the P3 Act or the legislature‘s intent.
Absent a statutory provision to the contrary, generally disappointed bidders lack standing to challenge the award of a government contract.
ORDER
NOW, July 10, 2017, the Order of the Court of Common Pleas of Northampton County, dated October 3, 2016, is AFFIRMED.
RENÉE COHN JUBELIRER, Judge
Ronald Harrison BURNETT, III, Petitioner v. SCHOOL DISTRICT OF PHILADELPHIA, Respondent
No. 1559 C.D. 2016
Commonwealth Court of Pennsylvania.
Argued May 1, 2017 Decided July 12, 2017