74 Pa. Commw. 435 | Pa. Commw. Ct. | 1983
Opinion bn
This is an 'appeal by John F. MoCloskey (Commissioner)
Facts’ and Procedure
In June, 1982, City Council adopted “An Ordinance Providing for the establishment within the city of Philadelphia of Cable Communication -System (CATV) service” (Ordinance). The Ordinance directed the Commissioner to solicit and initially review, subject to the competitive bidding provisions of the Philadelphia Home Rule Charter,
After preliminary review, CTIC Associates
(1) that its Area 3 proposal was submitted without a completed Form G ;6
(2) that Form G was a material and important element of the proposal;
(3) that the late submission of a completed Form G was an attempt to “substantively*438 amend” the proposal, a procedure prohibited by the RFP; and
(4) that the failure to include a completed Form G constituted a “material and nonwaivable defect” mandating the proposal’s disqualification from further consideration.
On March 22,1983, Independence filed suit in common pleas court to enjoin the 'City from holding public hearings on the other Area 3 proposals
Issues
There are two issues for resolution:
(1) whether the absence of a completed Form G from Independence’s Area 3 proposal requires the outright rejection of that proposal; and
Discussion
. We preface our discussion with an acknowledged appreciation for the complexity and uniqueness of this situation. Due to the expenditure of public funds in the execution of a government contract, the courts traditionally have respected and preserved the sanctity of the competitive bidding process. Laws requiring the competitive bidding of public contracts serve ‘ ‘the purpose of inviting competition, to guard against favoritism, improvidence, extravagance, fraud and corruption in ,the awarding of municipal contracts. . . .” Conduit and Foundation Corp. v. City of Philadelphia, 41 Pa. Commonwealth Ct. 641, 646, 401 A.2d 376, 379 (1979). On the other hand, if the public wealth is to be expended prudently and honestly, and if the integrity of the bidding process is to be maintained, the bidders must be treated fairly and cannot ibe excluded unduly from participation. Although guided by well-entrenched legal and public-policy tenets, a court must avoid the mechanical application of these principles without close reference to the underlying facts and applicable legislation, and without balancing the harm of excluding the bidder against the effects of permitting his continued participation. With this in mind, we now examine the issues.
I
The City contends that the inclusion of a completed Form G in a proposal is required by both the Ordinance and the RFP and, thus, the absence of the completed form in the original submission mandates the outright rejection of Independence’s bid.
We .disagree, however, that Independence’s failure to include the completed form in its original submission mandates the peremptory rejection of its bid. Neither the Ordinance nor the KFP affirmatively provides that a bid will be rejected for failure to include a completed Form Gr in its original submission. The EFP advises prospective bidders that “ [e]vasive, imprecise or incomplete responses can only serve to disadvantage the applicant,”
Thus, we conclude that, although the information contained on Form G- is necessary to enable the City to thoroughly and completely review Independence’s proposal, the absence of the completed form does not require that the proposal be rejected at this time.
■ The common pleas court concluded that the late submission of Form Gr would constitute a “substantive amendment,” the .acceptance of which is prohibited by the RFP.
In the area of public contracts, ibid modifications made subsequent to the designated submission date have been examined carefully by the courts since post-submission modifications may confer a competitive advantage upon one bidder to the detriment of others. See Conduit and Foundation Corp. The court then must .analyze completely the underlying circumstances to ensure that the bidders have competed on a fair and open basis, while contemporaneously preserving an individual’s right to participate freely in .the bidding of a public contract.
We 'disagree that the late submission of Form Gr constitutes :a prohibited “substantive .amendment.” Independence was not seeking to amend its bid. Rather, it was attempting simply to oorrect its ibid by providing information, previously lacking, that was critical to a fair analysis of its proposal. Moreover, based on the record before us, we are convinced that the omission was inadvertent.
Notwithstanding both the inadvertence of the omission and the mere correcting nature of a late submission, we realize that ,the opportunity for competitive
We cannot emphasize enough the unique character of this case,
Affirmed in part and reversed in part.
Order
That part of the Philadelphia .County Common Pleas Court order, No. 4019 March Term, 1983, dated April 6,1983, requiring John F. MoCloskey to rescind the rejection of Independence Oablevision Corporation’s (Cablevision) Area 3 proposal and to accept said proposal for processing is hereby affirmed. However, .that part of the .Common Pleas Court order pro
McCloskey, as the Commissioner of the Department of Public Property, was designated by Oity ordinance to solicit and review-proposals for the establishment of a cable communication system.
Section 8-201 of the Home Rule Charter, 351 Pa. Oode §8.8-201.
Form G required ¡the applicant to project capital expenditures, system growth, construction costs, annual expenses and revenues over the life of the franchise. The information supplied ¡on this form was used hy the City to evaluate the technical and financial feasibility of the applicants’ proposals.
OTIC Associates, the Oity Administration’s .technical consultant, was requested by the City to make a preliminary assessment ¡of the proposals’ responsiveness to the Ordinance and RFP.
It appears from the ¡record that Independence learned for the first time of a possible deficiency in its bid in late February through the news media.
The record indicates that this is (the first official confirmation that Independence had submitted its Area 3 proposal with a blank Form G.
The record indicates 'that at least three other bidders (Com-cast Cable Communications, Rollins Cablevision and Cox Cablevision) submitted proposals for Area 3.
At the hearing before Judge Greenberg, the City presented testimony that the information contained on Form G was necessary to allow the Gity to determine “whether there is adequate staffing [and] adequate monies being budgeted '[by the bidder] to maintain the services as proposed. . . . [T]'he ability to deliver the system, the ability to deliver on services [i.e., matters which can only be analyzed based on the Form G information] are fundamentally important to the question of whether the proposal is viable.”
(Emphasis added.)
Clearly, we are not directing the City to accept Independence’s Area 3 proposal. By today’s decision, we are merely requiring the City to rescind its peremptory rejection of Independence’s proposal and to accept the proposal for further processing.
The RFP provides that “Substantive amendments will not be considered except to acknowledge involuntary changes such as a change in ownership due to death.”
Independence submitted its original proposal on December 22, 1982, but was not notified either officially or unofficially that its application was deficient until late February, 1983, at -which time Independence attempted promptly to correct the application. All proposals, ¡however, had already .been opened and made available for public inspection. Independence, therefore, had the opportunity to inspect the other proposals before completing Form G for late submission. Although there is nothing in the record to indicate that Independence availed itself of 'this opportunity, we recognize that the opportunity for competive advantage did exist.
We note that judicial Intervention in the process is proper when competitive bidding is used and .the benefits of such bidding are questioned. Cf. American Totalisator Co. v. Seligman, 489 Pa. 568, 577, 414 A.2d 1037, 1041 (1980).
The City cites Conduit and Foundation Corp., supra, and American Totalisator Corp. v. Seligman, 34 Pa. Commonwealth Ct. 391, 384 A.2d 242 (1977), aff’d, 489 Pa. 568, 414 A.2d 1037 (1980), for the proposition that modifications occurring subsequent to the original ¡bid submission infect the competitive bidding process, thus invalidating government contracts awarded on the basis of these modifications. While we agree in principle with this .proposition, we note that these cases are factually distinguishable from the instant case.
In American Totalisator, the bid documents required that the “lowest responsible bidder” he awarded the contract; thus, the Court would not permit an applicant to lower its bid after examining a competitor’s bid. In .the instant case, however, the REP does not provide that the lowest responsible bidder will be selected. Rather, because of ¡the advanced state-of-the-art of cable television, the Ordinance and the REP stress an examination to reveal “the most qualified applicants.” Although the amount of the bid is to be considered in reviewing these proposals, it is by no means the only criterion in this particular selection process.
We are influenced by the following factors:
(1) The object of this particular bidding process is to secure the most qualified applicant, which may not necessarily be the lowest bidder. See n. 14, supra.
(2) The Commissioner is required by the Ordinance to “give favorable consideration” to certain enumerated factors, one of which is “the level and quality of commitment to Philadelphia-based minority . . . involvement with the system [including] especially ownership and/or investment opportunities as well as managerial policy-making and operational opportunities, training, employment and business opportunities.” (Emphasis in original.) Independence is a 100% minority-owned and managed cable television company.
(3) Based on the REP, the failure to include a completed Form G in Independence’s original submission was not such a deviation from the bidding specifications as to mandate its outright exclusion from the evaluation process.
*444 (4) All bidders were required ,to ¡provide a “nonrefundable filing fee in the amount of $10,000” to offset expenses incurred by the City in granting the franchises. We conclude .that a great injustice would result if Independence’s bid were rejected on the basis of a nonsubstantive omission which could readily toe corrected without prejudice to the other applicants.
(5) By giving the other Area 3 applicants the opportunity to resubmit their respective Form G documentation, any potential for competitive advantage in Independence’s favor has been vitiated.
we are not substituting our discretion for administrative discretion in .the award of the Area 3 franchise. This is clearly proscribed. See American Totalisator, 489 Pa. at 576, 414 A.2d at 1041. We are merely giving Independence the opportunity to participate in fair and open competitive bidding. The ultimate decision regarding an applicant’s overall qualification rests, of course, with the City.