*1 reversal) (“there no way anyone J., support opinion measures instituting disciplinary can determine whether and efficiency econo- promote greater against appellant will has appellant it proven at DER until has been my to the agency. in conduct detrimental actually engaged allegations judicial inquiry into Administrative disruptive as against nearly would be appellant allegations disciplinary of misconduct would unfounded undeserving at employes____”). sanctions leveled to ability place Finally, majority aрpellants’ views files as recourse to “genuine their counter-statements I agree. At 260. cannot reputation[s].” protect [their] only superior each counter-statements would invite Such file personnel looks into the subsequently employee’s who I think that just himself the truth lies. judge for where single of a appellants certainty should be afforded impartial hearing, arbiter after judgment, rendered each time their having judged rather than anew is considered. employment status I would reverse the order of the Commonwealth Court pleas case court of common and remand this to the Local Law. proceedings Agency further under the A.2d 452 Leo J. Division of the WILLMAN and Jaden Electric Appellants, Company,
Farfield PITTSBURGH, Mellon-Stuart CHILDREN’S HOSPITAL OF Development Company, County Hospital Allegheny Authority, Appellees.
Supreme Pennsylvania. Court
Argued March 1984.
Decided June *3 Mather, Cushman, Eleanor N. M. Barbara W. Kenneth Scheetz, Bozzo, E. Hamilton & Ewing, Stephen Pepper, Philadelphia, appellants. for Lockhart, Beard, III, Johnson & Kirkpatrick, E.
John Hutchinson, Pittsburgh, Company. for Mellon-Stuart Booker, Reed, Smith, Pitts- McClay,
Daniel I. Shaw & burgh, Hosp. Pgh. for Children’s Pittsburgh, Allegheny County Joseph Cоnway, W. Development Authority. Hospital FLAHERTY, C.J., LARSEN, McDER- NIX,
Before ZAPPALA, MOTT and JJ.
OPINION LARSEN, Justice.
In (Children’s), Children’s Hospital Pittsburgh a private non-profit corporation initiated charitable an exten- sive construction and project. plans renovation includ- ed the erection of a main hospital facility. new proceeded implement project by renovation into a entering Management Agreement Construction with private Mellon-Stuart Company, corporation. business agreement, Under the terms of the obligat- Mellon-Stuart perform ed itself to all management construction services alia, inter including, bids, the solicitation of development interest, receiving bidder of competi- evaluation contracts, tive bids for all trade and the entering into trade with various trade contractors and material sup- Further, pliers. the agreement stipulated that no contract for trade services or supplies could be made Mellon- Stuart prior approval without Children’s. Additional- ly, when the actual phase construction start- ed, Mellon-Stuart provide was all necessary construction site supervisory administrative services for complete construction and time budget within sched- agreement ule. The provided further that Mellon-Stuart complete would guaran- entire construction for a price.1 teed maximum
The guaranteed price provisions maximum meant that if the actual cost of completing project was less than the *4 price, then maximum Children’s would Mellon-Stuart pay however, If, the actual cost. only the actual cost exceeded price, the maximum Mellon-Stuart solely would be liable for the excess. no event liable for any would guaranteed costs over and above the maximum price. Figgins, 1. The of David F. affidavit President of Mellon-Stuart sets guaranteed forth that Mellon-Stuart the of construction cost $55,160,060.00, subject qualifications would exceed to the guaranteed price set exclusions forth in the maximum amendment to Agreement. Management the Construction accom- to be of the renovation was Financing Bonds, Revenue large part by Hospital in the sale plished Hospital W, through Allegheny County the issuеd Series is a Authority (Authority). Development Authority the laws of existing under corporate” “body politic Authorities Act Municipality to the pursuant Pennsylvania funds provide created in 1971 to of 1945.2 It was hospi- non-profit and notes to assist the issuance of bonds construction. to finance County hospital in Allegheny tals for the established financing arrangements the Under to a pursuant the issued Series W bonds Authority project, Bank, and Mellon Authority the agreement trust between the A entered into between trustee.3 lease was N.A. as leased the under which Children’s Authority and Children’s the lease The terms of Authority. to the hospital premises fixed rental for lump to sum Authority pay called for the the realized from equal proceeds to the net premises the the W bonds. Simultaneous issuance and sale of Series lease, executed execution of the a sublease was with the Authority under the and Children’s which Authority the is a to The sublease premises the back Children’s. sublet Children’s, and as rent Children’s obligation of general full Authority the agreed payments to make premi- interest and principal, amount nеcessary pay Further, Authority ums, if on the Series W bonds. any, trustee, Bank, N.A. executed an indenture and the Mellon amended, 2,May seq. P.S. 301 et 1 et as 2. Act of seq. published with the bond issue The official statement in connection Authority obligations W Bonds are limited states: "The Series and neither the Authority general general nor the credit credit of the Pennsylvania any politi- or taxing power Commonwealth of or payment W pledged of the Series subdivision thereof is cal Bonds, deemed to be an will Series W Bonds be or be nor any political Pennsylvaniа obligation or of of the Commonwealth Authority taxing power. Series has subdivision thereof. The no Indenture, the provisions of the W will be secured under the Bonds herein, Sublease, and will be each is referred to Lease and the Receipts de- ratably payable solely and Revenues equally and from with, additionally its Sublease rived under Pittsburgh.” guaranty Hospital of Children’s secured *5 the which all of its assigned right, title and interest in to the and sublease to the trustee and to pledged the trustee the and receipts payable revenues to the Authоr- under the ity sublease. obligations
Pursuant to its under the Construction Man- agement Agreement, proceeded Mellon-Stuart to solicit bids from trade qualified contractors so that the construction could accomplished be the most economical man- ner. For the portion electrical of the job, Mellon-Stuart solicited from seven electrical and privately bids contractors received from six. Appellant bids Jaden Electric Division of (Jaden), the Fairfield one of Company being contractors solicitеd, sought to a set of the bidding obtain documents electrical construction contract so that it could a submit bid. Mellon-Stuart refused to furnish Jaden with appropriate indicating documents that it did not towish entertain a bid from Jaden.4 and in equity against
Jaden Leo J. Willman5 filed suit Children’s, Authority seeking, Mellon-Stuart and the inter alia, injunction defendants from enjoining opening bids awarding executing or or contracts for the construction any project, along directing with an Order that Jaden provid- documents, ed all bidding with and to permitting Jaden a submit bid for the electrical construction work. appellants’ petition trial court denied for a prelimi- nary injunction ruling that the defendants were not re- to quired employ public competitive bidding letting affidavit, Figgins, In his David President of Mellon-Stuart stated: Project vitally ability "Overall cost can be affected a contractor's Thus, perform particular project particular pre-qualifi- at a time. cation, experience Mellon-Stuart the trade considers contractor’s on work, projects, present strength, ability similar volume of finаncial work, force, timely complete quality its available skilled work of work ability cooperate to coordinate and with other contractors. Mel- competitive bidding lon-Stuart invited from those trade contractors which, professional judgment, qualified in Mellon-Stuart’s are on all specific package.” criteria for their bid Willman, Jaden, taxpayer 5. Leo J. Vice-President of avers that he is a Pennsylvania brings of the Commonwealth this action on taxpayers. behalf of himself and all other thus, Jaden was in the of сontracts *6 a bid. The submitting of privilege denied the properly court’s order.6 We affirmed the trial Court Commonwealth of appeal. for allowance petition granted appellants’ grant from the appeal on The standard of review repeatedly has been injunction of a preliminary or denial stated: consideration, that on an recognize a we preliminary
As
injunc-
of a preliminary
or denial
grant
from the
appeal
the controversy,
the merits of
tion,
inquire
do not
into
we
if there were
record to determine
examine the
only
but
action of the
grounds
reasonable
any apparently
if
that no
exist to
plain
grounds
it is
Only
court below.
upon
relied
or that the rule
law
the decree
support
of
will we interfere
misapplied
or
was
erroneous
palpably
Inc. v.
of the Chancellor.
Intraworld
with the decision
343,
(1975);
Bank,
Bell v.
(1982);
A.2d 928
Larson,
Pa.
454
v.
499
Ezy Parks
Health,
v.
Osteopathic Hospital Dept.
Shenango Valley
(1982);
Public
Singzon Dept.
499 Pa.
6. 74 Pa.Cmwlth. bidding open competitive appellants argue con- Authorities Act for all Municipality mandatеd It is assert- an Authority. struction which involve projects appel- from accept refusal to a bid ed that defendants’ of this lant is a violation act. palpable Jaden in pertinent part, the Act provides, Section 10 of follows: reconstruction, construction, repairs any
All or work cost, the entire any Authority, nature where made construction, reconstruction, or of such value amount materials, ex- work, shall repairs including or labor ($2,500), dollars ... shall ceed two thousand five hundred contract or contracts to be entered done under only responsible into with the lowest bidder *7 terms, given after notice has been upon public due proper (em- hereinafter asking competitive provided, for bids as phasis supplied) amended, 312(A).7 1945, as 53 P.S. May
Act of as used in appellants argue phrase by The that the made broadly construed to 10 above should be quoted Section interest any tax-free bonds or financing by property include in a Authority project. of an The trial court found that the Children’s Construction or involving public public is a funds private рroject Plan restrictively interpreted made was to phrase credit. The is a public competitive only Authority bids when the require Since, in in this to a contract as described Section 10. party case, to construction party any the not a of actual the contract nor is it involved in the construction enter into may the court concluded that owners project, affirming choose. they whomever with court, “public trial the Commonwealth Court held here, where, bidding is not competitive construct the manage not undertаken to or Authority has question.” provides competitive where the the Act now bids 7. This section of ($4,000.00) Four Dollars. cost or value exceeds Thousand 8. 74 A.2d at 858. Pa.Cmwlth. at appeal this is whether presented by issue principal financing channel providing role in Authority’s “Construction, reconstruction, constitutes (53 authority”, nature made any or work repairs [an] material contracts trade and 312(A)) requiring thus all P.S. public on a responsible to the bidder only to let lowest deciding 10. In Section specified by basis as competitive bid open reasons for an useful to consider the this it is question requirement. competitive bid public contracts for public letting important
In the that the interests work, it is considered generally open contracts to submitting such are best served public § 34, p. bidding. 64 Am.Jur.2nd competitive that contracts requiring purposes provisions bid- only authorities be let after public with public construction of economy in the ding are to secure funds for materials expenditures public works and bodies; protect by public needed supplies favoritism, contracts; prevent from collusive public in the fraud, procure- extravagance, improvidence state and its local things for the use of the ment of these actual, hon- subdivisions; promote and to self-governing each propos- to the end that est, competition and effective for the construction of a and considered al or bid received for public of materials improvement, supplying etc., upon all other bids use, competition with may be *8 basis, may contracts be public so that all such the same taxpayers. сost to secured at the lowest PP. 981-82. 81 A.L.R.3rd project, the entire in indeed question,
The contract
public
funds or
public
the use or risk of
does not involve
by
is borne
of the costs of construction
credit. None
intended
legislature
do
that the
We
not believe
taxpayers.
bidding
authority
where an
require open
to
private
an entirely
conduit for
financing
serves as a
merely
Housing Corp.
Area
Compare:
project.
Clearfied
(1974). “The
96,
ascertain and effectuate the intention of the General As- Act, 1972, Construction Statutory sembly”. Dec. 3(a), 1921(a). 1 No. 290 Pa.C.S.A. The obvious intention of a public competitive bidding requirement is to secure for government the use of the or a governmental body at the lowest cost to the taxpayers. dealing private this case we are with a undertaking at no cost to the The reasons for taxpayers. open competitive noted, bids do not exist. As the Commonwealth Court have, not, legislature could but did state in 10 Section “[t]he of the Act that all projects by authority are financed subject public competitive bidding requirements.” to private is a project, by private backed property private funds and is to managed constructed by private parties. Authority’s role is limited to providing financing vehicle to assist the private in parties hospital the construction of a new facility. Under circumstances, public competitive such bidding require- ment of Section 10 does not apply.
Next, the appellants argue open competitive required by the “General Guidelines obtain bidding for Term ing Long Financing Hospital Facilities ” the Allegheny County Hospital Development Authority adopted Guidelines, and issued in by Authority. The pertinent part, provide:
(a) Competitive Bids: construction is initially Where undertaken ACHDA De- [Allegheny County Hospital velopment Authority], by assignment ACHDA will take all plans specifications and will com- petitively bid the construction work as Act [Pennsylvania Municipality 1945], Authorities Act of However, where it is to the economic advantage hospital proceed stages with the construction pro- gram, participate program by per- ACHDA will such mitting hospital award contracts with initially All subsequent assignments thereof to ACHDA. con- hospital tracts so awarded must have been first at A.2d at Id. Pa.Cmwlth. 858-59. *9 competitive bidding made the of accordance subject with the Act. properly
Guaranteed maximum contracts bonded are all managers permissible, provided with construction guaranteed under such maxi- sub-contract work done mum contracts is awarded on a basis. competitive (R. 30a, VI(a)); added). (emphasis Article are appellants urge Authority’s
The Guidelines regulations binding official of force and under them the appellees open competitive bidding are bound to invite contracts, the one for electrical work. including all trade hand, argue The on the other that the Guidelines appellees, infor- general policy only constitute a statement are nature; continues, thusly, appellees argument mational binding regulations are not and have never been treat- they Authority. ed as such regulations, are binding
Whether or not Guidelines we this believe that under the circumstances of case is not here in- competitive bidding required. guaranteed volves a maximum contract with Mellon-Stuart serving manager agreement as construction under with arrangement specifi- Children’s. This kind of contractual VI(a) authorized the second cally paragraph Section the Guidelines. VI(a) distinguishes
Section construction projects between where the is involved in the construction and those in opts proceed guaran- which owner under a manager. teed maximum cоntract with a construction cases construction is initially where undertaken or subse- quently Authority, explicitly assumed the Guidelines required state that all work shall be bid “as competitively Act,” “in by the and all contracts shall be awarded accord- ance with the Act.” Authorities Act of (Municipality § 312(A), bids). public competitive 53 P.S. which calls for VI(a) paragraph dealing projects Section with involv- ing guaranteed maximum contracts sets forth that all sub- contract work is to on a basis. be awarded no “as qualifying phrase Inasmuch as form of *10 in by pertaining the Act” is included the paragraph maximum contracts that as guaranteed private we conclude public competitive permitted. well as bids are In the case Mellon-Stuart awarded the con- judice, sub soliciting receiving tract in after question privately from contractors. competitive pre-qualified bids several Authority’s relating This is within the Guidelines procedure find in maximum contracts. We no error guaranteed for a denying appellants’ request preliminary injunction, therefore, the order the Commonwealth Court affirmed.
McDERMOTT, J., NIX, a Dissenting Opinion filed which C.J., joins. PAPADAKOS, JJ., did not partici-
HUTCHINSON and in or of this case. pate the consideration decision McDERMOTT, Justice, dissenting. a municipal authority may
The issue here is whether dodge statutorily competitive bidding procedures mandated financing plan scheme. The imaginative management the of a the hands question placed the financed in agent great part by of an when was tax-free municipal authority’s the revenue bonds.1 the majority strategy employed by holds that (“Au- County Hospital Development Authority Allegheny and the Mellon thority”) Hospital, Mellon-Stuart bidding since the con- Bank survives without parties engaged tracts made private here were itself did not make the agents, result, or construction. To reach this language construes the “made majority strictly by” 312(A) Act:2 Municipal Authority section provided by project was the sale of $54.5 $74.3 million of the million Authority's bonds. amended, 18, 1982, February No. 2 as 53 P.S. 2. Act of 312(A). construction, reconstruction, any All or work of repairs cost, the entire any Authority, nature made where reconstruction, construction, such or аmount of value materials, work, shall ex- including or labor and repairs ($4,000), done only four thousand dollars ... shall be ceed contracts to be entered into under contract or responsible upon proper the lowest bidder Authority with terms, given asking after due notice has been provided. (Emphasis sup- hereinafter competitive bids as plied.) § 312(A).
53 P.S. *11 ambigui- resolution of this disagree majority’s I with the language broadly I of the statute must be ty. believe important public policies sought construed to effectuate the when, 1945, it of legislature systеm mandated for contracts au- competitive bidding involving municipal thorities.
Cutting complex case, financial minutiae of this away simple problem statutory we have a of construc- relatively However, tion. has turned the traditional majority down, statutory upside rules of construction al- recklessly of a of the lowing component Municipal evisceration vital Authorities Act.
“The of all object interpretation and construction of stat utes is to ascertain and effectuate the intention of the § 1921(a);3 1 Assembly.” Casey Gеneral Pa.C.S. v. Penn 606, 615, 695, 463 Pa. 345 A.2d sylvania University, State (1975); 700 v. Properties, Commonwealth Monumental 450, 467, 812, (1974). Further, Inc., 459 Pa. 329 A.2d 820 statutory language liberally should be construed to effectu § 1928(c). ascertaining 1 legislative ate intent. Pa.C.S. intent, legislative the court should look to the mischief § 1921(c)(3).4 1 sought to be remedied. Pa.C.S. 1972, 290, Act, 6, 3, Statutory Act of December No. 1 § Construction seq. Pa.C.S. 1501 et § statutory rule construction directs that we ascertain
4. Another of interpretations. legislative 1 Pa.C.S. intent administrative MacLeod, 1921(c)(8); Pennsylvania Hospital Association v. 487 of 276
This
has
stated the еnd
previously
sought
Court
to be
gained by competitive bidding: “guarding against favorit
ism,
fraud,
improvidence,
corruption
awarding
of
contracts."
v.
437 Pa.
public
City
Philadelphia,
Weber
of
179,
(1970);
Burrell,
been
See, McQuillin,
Corporations
29.29
Municipal
tions.
*12
(1979); Note,
Competitive Bidding
“The
of
Necessity
523,
731,
also,
Ruiz,
516,
(1980);
v.
Pa.
410 A.2d
734
See
Morton
415
1055,
Here,
199,
(1974).
U.S.
S.Ct.
Article 5, 1947, 458, 11, 53 P.S. 5. Act of June
277
117,
(1965); An
Contracts,” 27
123
U.Pitt.L.Rev.
Municipal
Construction,
Istari
979,
(1972);
not.,
981-82
81 A.L.R.3d
Muscatine, 330
(Iowa 1983);
798
City
Inc. v.
N.W.2d
of
Shelton, 187
v. City
Brennan Construction Co.
John J.
of
Dilling
v.
Libby City
695,
(1982);
Additionally,
munici-
against a
must be construed
bidding requirements
the
When
requirements:
to avoid
pal authority seeking
Cabe v. Union Carbide
bid. See
ambiguity,
there is an
City
v.
Cosentino
(Tenn.1983);
Corp.,
644 S.W.2d
(1971).
Omaha,
If we were to endorse exemption competi- this from the bidding process, nothing prevent tive would other Common- skirting competitive wealth authorities from re- bidding quirements: the the merely employ majority provides device for them. authority Rather than have the itself construct and contract for a funnel the tax-free project, funding through the to an authority agent, private company, which would in turn manage and make all the perceived contracts for the With the project. annoyance competitive bidding out of the or the way, agent official appointed who could his friends agent award political allies lucrative contracts. The concerns of favoritism, improvidence, corruption, fraud and while not case, hinted at implicated this are when bidding procedures are avoided a scheme like the one here. employed
Appellees might complain competitive bidding is an onerous Hospital burden. The Children’s is certain- However, ly important one. it cannot be said that competitive bidding handicap would such a unduly project. Competitive bidding successfully passed has the test of time, governing municipal authority award in the Commonwealth since and other governmental contracts since the century. turn of the It is not so much to that, in exchange ask for the million of tax-free financ- $54 ing, parties competitively bid out contracts as statute. Further, are not inflexi- competitive bidding requirements requires go ble and The statute contracts to unyielding. bidder, giving lowest some discretion to the responsible § 312(A), If, agent. and/or its supra. P.S. here, alleged their appellants qualified job, were bids could have been under the Act. rejected Hospital project possible by was made should public Authority. Competitive bidding procedures *14 under the operating Authority, when an adhered to for a Act, financing provides Authorities Municipal construction, and other work. repair project’s of the statute was construction the lower courts’ Since the order of the one, I reverse would not a reasonable Court. Commonwealth C.J., dissenting opinion.
NIX, this joins
479 A.2d Pennsylvania, Appellee, COMMONWEALTH BEASLEY, Appellant. Leslie C. Pennsylvania.
Supreme Court Argued April 28, 1984.
Decided June