Statewide Bldg. Maintenance, Inc. v. Pennsylvania Convention Center Authority

• Decision Date: 16 December 1993
• Citation: 635 A.2d 691,160 Pa.Cmwlth. 544
• Parties: STATEWIDE BUILDING MAINTENANCE, INC. and Kathy McCafferty, Petitioners, v. PENNSYLVANIA CONVENTION CENTER AUTHORITY, Respondent.
• Court: Pennsylvania Commonwealth Court

Page 691

635 A.2d 691

160 Pa.Cmwlth. 544

STATEWIDE BUILDING MAINTENANCE, INC. and Kathy McCafferty, Petitioners, v. PENNSYLVANIA CONVENTION CENTER AUTHORITY, Respondent.

Commonwealth Court of Pennsylvania.

Argued Oct. 4, 1993.

Decided Dec. 16, 1993.

Bruce S. Marks, for petitioners.

Barry M. Klayman, for respondent.

Before PALLADINO and FRIEDMAN, JJ., and SILVESTRI, Senior Judge.

FRIEDMAN, Judge.

We have before us preliminary objections in the nature of a demurrer filed by the Pennsylvania Convention Center Authority (the Authority) to a petition for review in the nature of a complaint in equity and mandamus filed in our original jurisdiction by Statewide Building Maintenance, Inc. (Statewide) and Kathy McCafferty (McCafferty), (collectively, Petitioners). ¹ In the petition for review, Petitioners allege that as the lowest responsible bidder on a contract to provide custodial services at the Pennsylvania Convention Center in Philadelphia (Convention Center), Statewide should have been awarded the contract.

In a request for proposal (RFP) dated August 31, 1992, the Authority sought bids from qualified contractors to provide housekeeping and set-up services for the Convention Center. Statewide submitted a bid in response to this RFP, and in October 1992, the Authority informed Statewide that its bid had been accepted for a five year contract contingent upon approval by the City Council of Philadelphia (City Council).

On March 31, 1993, the City Council met but failed to act on the Statewide contract. ² The Authority issued a second RFP on April 22, 1993 and although Statewide submitted a second proposal, it did so under protest, claiming that it had already been awarded the contract under the first RFP. On May 20, 1993, after receiving responses to the second RFP, the Authority awarded the contract to another proposer (Successful Bidder). Statewide protested the award of the contract to Successful Bidder, believing that Statewide was the lowest responsible bidder on the second RFP but that its bid was arbitrarily rejected by the Authority. By letters dated June 7 and June 9, 1993, Statewide also requested documents from the Authority related to the competitive bid process. On June 10, 1993, the Authority revoked Successful Bidder's May 20, 1993 contract award but passed a resolution permitting negotiation and execution of a short-term contract for housekeeping and set-up services with Successful Bidder, without first providing public notice or requesting competitive bids.

On June 15, 1993, Petitioners filed a petition for review seeking relief from this court. ³ In Count I of the petition, Petitioners allege that the Authority acted illegally in awarding the short-term contract to Successful Bidder, in violation of the competitive bidding process and in an arbitrary and capricious manner. Accordingly, Petitioners request that we enjoin the Authority from negotiating and executing a contract for housekeeping services with anyone other than Statewide and that we enjoin the Authority from permitting anyone other than Statewide to perform such services. In Count II of the petition, in which Petitioners allege that the Authority awarded the contract for housekeeping services to Statewide pursuant to the first RFP, Statewide requests that we compel the Authority to execute that previously negotiated contract. Finally, in Count III of the petition, Statewide alleges that the Authority violated the Pennsylvania Freedom of Information Act, (actually known as the Pennsylvania Right to Know Act, 65 P.S. §§ 66.1-66.4), by failing to provide Statewide with the documents it requested both orally and in its letters of June 7 and June 9, 1993; therefore, Statewide requests that we compel the Authority to make the requested documents immediately available for Statewide's inspection. ⁴ On July 13, 1993, the Authority filed preliminary objections in the nature of a demurrer, requesting this court to dismiss all three counts of the petition for review on grounds that Petitioners failed to state a claim upon which relief can be granted and for lack of jurisdiction. ⁵

The foundation for Petitioners' request for relief in Count I, to enjoin the Authority from contracting with anyone other than Statewide, and Statewide's request for relief in Count II, to compel the Authority to execute a contract with Statewide, both lie in the assertion that the Authority is required under section 15(a) of the Pennsylvania Convention Center Authority Act (Act), Act of June 27, 1986, P.L. 267, 53 P.S. § 16215(a), to seek competitive bids for a contract to provide housekeeping services for the Convention Center and then to award the contract to the lowest responsible bidder. The Authority, however, maintains that it is not statutorily required to seek competitive bids for such a contract and, therefore, need not award the contract to the lowest responsible bidder.

The Act provisions dealing with the award of contracts by the Authority are found at 53 P.S. § 16215; the Authority relies on subsections (a) and (c) of 53 P.S. § 16215 to support its position. These subsections provide in relevant part as follows:

(a) Lowest Responsible Bidder.--All construction, reconstruction, repairs or work of any nature made by the authority, where the entire cost, value or amount of such construction, reconstruction, repairs or work, including labor and materials, shall exceed $4,000, ... shall be done only under contract or contracts to be entered into by the authority with the lowest responsible bidder upon proper terms, after due public notice has been given asking for competitive bids as hereinafter provided, but the authority shall have the right to reject any or all bids or select a single item from any bid.... Nothing in this section or any other law of this Commonwealth shall require the authority to competitively bid architectural design, engineering, construction management or other professional services required by the authority.

(c) Management prerogatives.--Nothing in this section or in any other law of the Commonwealth shall preclude the board, with the approval of six members, from negotiating contracts for management, operation, concession services, licensing or leasing of a convention center, or any part thereof....

Upon review of these sections, we must agree with the Authority that housekeeping services would fall under "operation" of the completed Convention Center, covered in subsection (c), rather than work involved in the Convention Center's construction, reconstruction or structural repair, covered in subsection (a). Because the Authority is required to enter contracts with the lowest responsible bidder only in the latter case, we are not dealing with a competitive bid situation here. ⁶

Petitioners argue that housekeeping services must fall within the subsection (a) phrase "work of any nature," reasoning that the limited exception to the competitive bidding requirement set forth in subsection (c) was meant to apply only to the overall management, operation and leasing of the Convention Center and not to mere janitorial services. However, because such a reading would take the questioned phrase out of context, a more reasonable interpretation would be that the phrase refers to "work of any nature" which is integral to the construction, reconstruction or repair of the Convention Center. Janitorial services do not fall into this category; rather, no matter how routine or mundane, they are properly considered part of the Convention Center's operation. ⁷

Relying on City of Philadelphia v. Department of Environmental Resources, 133 Pa.Commonwealth Ct. 565, 577 A.2d 225 (1990) and American Totalisator Co. v. Seligman, 27 Pa.Commonwealth Ct. 639, 367 A.2d 756 (1976), aff'd, 489 Pa. 568, 414 A.2d 1037 (1980), Petitioners also contend that even in the absence of a statutory requirement, a contract is required to be awarded to the lowest responsible bidder when, as here, the public authority invites bids. Accordingly, Petitioners assert that once the Authority issued the first RFP and, based on that RFP, selected Statewide to provide the Convention Center's housekeeping services, the Authority was required to award the contract to Statewide as the lowest responsible bidder under the RFP. We believe that Petitioners reliance on these cases is misplaced.

In American Totalisator, a disappointed bidder sought to enjoin the award of a public contract for computer services to the successful bidder. The disappointed bidder also sought an order directing that it be awarded the contract as the lowest responsible bidder. In preliminary objections, the successful bidder claimed that because the invitation was to bid for highly skilled professional services, which were exempt from competitive bidding, the disappointed bidder had failed to state a cause of action. However, we rejected this argument. We reasoned that where the respondents invited proposals which "they represented would be let as are contracts submitted for competitive bidding," even when not statutorily required to do so, "public policy and the economical conduct of governmental business require that the contract be awarded to the lowest responsible bidder." Id., 27 Pa.Commonwealth Ct. at 644, 367 A.2d at 758. (Emphasis added.) Indeed, the respondents in American Totalisator agreed that competitive bidding was required by their request for proposal. ⁸ That is not this case.

Like the respondents in American Totalisator, the Authority was not bound by statute to seek competitive bids for the housekeeping services contract. However, unlike the respondents in American Totalisator, the Authority did not elect or otherwise promise to use the competitive bid process. In fact, in its first RFP, the Authority disclaimed any obligation to contract with the lowest responsible bidder, stating Upon receipt of the Proposals, [the Authority] may short-list the Proposers based on...