Allan Myers, L.P. v. Department of Transportation, 011119 PACCA, 314 C.D. 2018

Docket Nº:314 C.D. 2018
Opinion Judge:MARY HANNAH LEAVITT, PRESIDENT JUDGE
Party Name:Allan Myers, L.P., Petitioner v. Department of Transportation, Respondent
Judge Panel:BEFORE: HONORABLE MARY HANNAH LEAVITT, President Judge, HONORABLE RENÉE COHN JUBELIRER, Judge, HONORABLE ROBERT SIMPSON, Judge, HONORABLE P. KEVIN BROBSON, Judge, HONORABLE PATRICIA A. McCULLOUGH, Judge, HONORABLE MICHAEL H. WOJCIK, Judge, HONORABLE ELLEN CEISLER, Judge. Judge Fizzano Cannon did ...
Case Date:January 11, 2019
Court:Commonwealth Court of Pennsylvania
 
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Allan Myers, L.P., Petitioner

v.

Department of Transportation, Respondent

No. 314 C.D. 2018

Commonwealth Court of Pennsylvania

January 11, 2019

Argued: October 17, 2018

BEFORE: HONORABLE MARY HANNAH LEAVITT, President Judge, HONORABLE RENÉE COHN JUBELIRER, Judge, HONORABLE ROBERT SIMPSON, Judge, HONORABLE P. KEVIN BROBSON, Judge, HONORABLE PATRICIA A. McCULLOUGH, Judge, HONORABLE MICHAEL H. WOJCIK, Judge, HONORABLE ELLEN CEISLER, Judge.

OPINION

MARY HANNAH LEAVITT, PRESIDENT JUDGE

At issue in this appeal is the Department of Transportation's (PennDOT) inclusion of a requirement in a bid solicitation for a highway construction project that the winning bidder execute a project labor agreement (PLA). Allan Myers, L.P., a nonunion construction company, petitions for review of the order of the Secretary of Transportation dismissing its protest to the PLA requirement in the bid solicitation. The Secretary held, inter alia, that the PLA did not violate Pennsylvania's competitive bidding laws. For the following reasons, we reverse.

Background

For some time, PennDOT has been making improvements to Markley Street, which is State Route 202 in Montgomery County (Markley Street Project). A nonunion contractor, J.D. Eckman, Inc., won the bid for the first phase of the Markley Street Project and completed it a year ahead of schedule and on budget.

Reproduced Record at 349a (R.R.___). In August 2017, PennDOT issued a bid solicitation for the second phase of the Markley Street Project. The solicitation provided that all contractors were required to sign a PLA with the Building and Construction Council of Philadelphia and Vicinity (Building and Construction Council), which represents 11 local unions identified in the PLA (Local Unions).1The PLA obligated bidding contractors to hire craft labor personnel through the Local Unions and to be bound by the Local Unions' collective bargaining agreements. In response, multiple contractors, both union and nonunion, filed taxpayer lawsuits, bid protests, and petitions for preliminary injunction. PennDOT withdrew its August bid solicitation.

On December 20, 2017, PennDOT issued another bid solicitation, which also required contractors to sign a PLA with the Building and Construction Council. The PLA again obligated contractors to hire through the Local Unions in accordance with the terms of their collective bargaining agreements. The December bid solicitation differed from the August bid solicitation in one key respect: the PLA provides that if the successful bidder already has a collective bargaining agreement with United Steelworkers, that bidder was not subject to the hiring requirements under the PLA and permitted to use its United Steelworkers workforce.2

Specifically, the PLA states in pertinent part:

Article I: SOURCING RELIABLE CRAFT LABOR

[Section 3-E]. Unless otherwise specified in this Agreement, the Project Contractor shall be bound by the terms of the Local Union Collective Bargaining Agreements included as Appendix B hereto ("Local Agreements"), and any successor agreements or amendments thereto….

[Section 3-F]. All craft labor personnel employed on the Project, whether by the Project Contractor or other entities, shall be hired through the Local Unions identified in this Agreement, and in accordance with the hiring procedures of Local Agreements, included as Appendix B hereto.

[Section 3-G]. All Parties shall respect the sanctity of Local Agreements, which shall control wages, benefits, hiring procedures and other terms and conditions of employment, unless otherwise specified in this Agreement.

[Section 3-H]. In the event that a contractor bound by a Collective Bargaining Agreement (CBA) with the United Steelworkers (USW) is the successful bidder, the contractors will be permitted to utilize its USW workforce and its USW CBA3provided that the contractor adheres to the conditions and economic terms of the Agreement excluding any hiring hall obligations or union security provisions. And provided further that the USW contractor is either a protected contractor, under the terms of the Harmony Agreement of February 24, 1994 or has been organized by USW pursuant to paragraph 3(b) of the Harmony Agreement for at least 120 days prior to the issuance of any bid specification for the Project and provided that it normally performs the type of work being let in the geographical area of the project.

Article VI: CONFLICT AVOIDANCE PROCEDURES

Section 1: No Strikes-No Lock Outs. The Parties recognize that the timely planning and execution of this Project is critical and, therefore, agree that there shall be no lock-outs by Project Owner or the Project Contractor. The Unions agree that there will be no strikes or other work stoppages, provided that in the event a Local Union collective bargaining agreement expires during the course of this Project, the Project Contractor agrees to retroactive application of the terms of the new collective bargaining agreement entered between the affected Local Union and its signatory contractors.

R.R. 25a, 27a-28a, 32a (emphasis omitted). The PLA states that "[t]ime is of the essence for the Project" and that "any qualified contractors may bid or perform work on this Project, regardless of whether or not they are affiliated with the [Building and Construction Council] or its Local Unions." R.R. 25a-26a.

On December 27, 2017, Allan Myers filed a bid protest, asserting that the PLA was "unlawful and arbitrary," and it requested PennDOT to reissue the bid solicitation without the PLA requirement. R.R. 2a. The bid protest challenged the PLA as discriminatory because it effectively precludes nonunion contractors from bidding and unduly favors contractors affiliated with United Steelworkers. A report prepared for PennDOT by Keystone Research Center (Keystone Report) recommended the use of the PLA. The bid protest challenged the Keystone Report because it did not use "objective data" and was "inherently biased." R.R. 6a-7a. Finally, the bid protest asserted that the use of the PLA violates Section 404.1 of the State Highway Law, 4 which requires PennDOT to qualify bidders using statutory criteria. A bidder's union affiliation, or its willingness to sign a PLA, is not a qualifying factor under Section 404.1 of the State Highway Law.

PennDOT filed a response, asserting that case law precedent has authorized the use of a PLA in bids for public construction projects. Because the PLA provides that "any qualified contractors may bid or perform work on this Project" regardless of their union affiliation or lack thereof, PennDOT contended that Allan Myers could bid on the Markley Street Project. R.R. 26a. PennDOT relied on the Keystone Report, which stated that a PLA is a useful way to address labor shortages. PennDOT argued that the PLA did not violate Section 404.1 of the State Highway Law because PennDOT has discretion to decide "the particular contractual terms and conditions under which PennDOT is to purchase the labor, materials and services[.]" PennDOT Response at 12; R.R. 459a.

By a final determination dated February 26, 2018, the Secretary of Transportation dismissed Allan Myers' bid protest. Relying on this Court's decisions in A. Pickett Construction, Inc. v. Luzerne County Convention Center Authority, 738 A.2d 20 (Pa. Cmwlth. 1999) (Pickett); Sossong v. Shaler Area School District, 945 A.2d 788 (Pa. Cmwlth. 2008) (Sossong); and Glenn O. Hawbaker, Inc. v. Department of General Services (Pa. Cmwlth., No. 405 M.D. 2009, filed December 1, 2009) (unreported single judge opinion) (Hawbaker), the Secretary held that the PLA was not discriminatory because nonunion contractors are free to bid on the Markley Street Project. The Secretary concluded that the PLA does not favor United Steelworkers contractors because they are bound by the same terms and conditions of the PLA as all other contractors. The Secretary observed that the purpose of Section 3-H of Article I of the PLA is not to "limit the pool of workers" but, rather, to "remove[] a barrier to entry by certain contractors who [sic] would have been contractually unable to enter the PLA." Final Determination, 2/26/2018, at 12. The Secretary rejected Allan Myers' legal claims that PennDOT's imposition of the PLA requirement violates the prequalification provisions set forth in the State Highway Law and is arbitrary and capricious.

Allan Myers petitioned for this Court's review.[5]

Appeal

On appeal, Allan Myers raises four issues for...

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