Dally: Disappointed Bidder Lacks Standing to Complain About Bridge Bundling Project

A lawsuit challenging Northampton County's innovative bridge bundling project has been rejected in an Opinion handed down today by Judge Craig Dally. He ruled that the suing Plaintiffs, Clearwater Construction and Northampton County Bridge Partners, LLC, lacked standing. As a result, they failed to even make it to first base.

This lawsuit involves the county's use of a "private-public partnership" contract, called P3, to repair or replace 33 structurally deficient bridges, all in one shot. The bridges were conveyed to the county's General Purpose Authority, which then sought bids from one set of experts for the entire $40 million project. This is expected to both save money and create efficiencies.

The contract had been awarded to Kriger Construction, although approval from Northampton County Council was needed. This was on the agenda for September 15, but was pulled.

In the Complaint, Clearwater and NorCo Bridge Partners contend that Kriger failed to satisfy the prerequisite requirements for a responsible bidder, and lacks bridge experience. In addition, they claim that the General Purpose Authority and department of Community and Economic Development gave undue weight to Kriger. They claimed that there had been improper influence, which they contended they could prove through discovery.

Under Pennsylvania law, a disappointed bidder ordinarily holds no property interest in a lost contract. Judge Dally was asked to interpret the Public-Private Transportation Partnership Act in the context of the bidding process for a contract with the county, which is a matter of first impression. Judge Dally concluded that, if the Plaintiffs were a "development entity" or the Defendants a Commonwealth agency, there would be statutory standing. But he concluded that no such conclusion is warranted.

Because this is a matter of first impression, an appeal appears to be likely.

Blogger's Note: Originally published 10/3 at 2:40 pm.

Bethlehem Tp Rejects $32k Bill by Ex-Comm'r For Carport

Over a year ago Bethlehem Township's Board of Commissioners awarded a $139,024 contract for an 18-vehicle carport for the Township police patrol cars. A few eyebrows went up when the contract was awarded to Weiss Construction. Owner Paul Weiss was himself a Commissioner for eight years before being defeated by Pat Breslin in the 2013 election. But he was the low bidder. In fact, his bid was $20,000 below the next highest bid.

Work was supposed to be finished in August 2015, but Weiss was instead granted two extensions.

When he started, he hit rock 18' below the surface while drilling for the posts. Instead of stopping work and seeking approval for an extra expense with what is known as a "change order," he continued, and went $32,070 over budget. Of that sum, $27,000 is what is owed to the drilling subcontractor. The rest is profit to Weiss.

On January 19, Weiss submitted his change order, seeking an extra $32,070. But his contract with the Township contained no "rock clause," entitling a contractor to seek additional compensation if excavation is difficult.

"You are not contractually required to accept the change order," Conflicts Solicitor Stanley Margle advised Commissioners in March. "It is entirely discretionary with the Board."

Commissioners took no action until their August 1 meeting, then they voted 4-1 to reject the change order. The sole No vote came from Michael Hudak, who in March had advocated paying Weiss $27,000, the sum he had to pay for a drilling subcontractor.

"This is a cost of doing business," said resident Marcie Hedrick."Mr. Weiss is a professional. He knew how to do this. He didn't do it the right way. It happens. Please don't throw this money away. We have children to support." Resident Barry Roth suggested that Weiss knew he'd hit rock.

Calling the change order "legitimate," Hudak described Weiss as a "very good contractor." He predicted that "until all is said and done, we're going to end up spending more in legal fees than if we just paid the damn change order."

Weiss was absent at this meeting, as he was in March.

The Disgruntled Bidder

Northampton County recently decided to have an outside firm assess Bethlehem's Sands Casino. Calling it "the most important decision in assessment that the county has ever made," Finance Director Vic Mazziotti recommended California firm HVS, which has experience appraising hundreds of casinos, to county council. They unanimously agreed, and the firm will be paid around $100,000 for this job. Sounds fairly straightforward, right? Unfortunately, there's another story, and it reveals a local businessman who used political contacts, instead of qualifications, to pressure county officials.

In competitive bidding, the low price usually wins. But for the casino appraisal, the county went the RFP (Request for Proposal) route. Cheaper is not always better, especially when professional services are involved. Proposals are opened at the same time and assigned to a committee, which evaluates and recommends an ideal vendor. County Council must accept this recommendation, and only then is the County Executive free to sign a contract. In this case, there were four proposals, and one of them came from Allentown appraiser John Ingram, who has absolutely no experience with casinos.

Purchasing Officer Kathryn Anderson tells me that, once a proposal is received, county officials adopt a "cone of silence" until the contract is awarded. This avoids undue influence by any one bidder, who may seek to get a leg up on other prospective vendors. But Ingram made a point of calling numerous county officials anyway. He actually met Northampton Controller Steve Baron, and made a point of mentioning his ties to Allentown Mayor Ed Pawlowski. In fact, in his proposal, Ingram lists Pawlowski as his first reference, including the mayor's personal cell phone number. The other three vendors list banks. Ingram also bragged that he was a member of King Edwin's blue ribbon panel. You know, that's the one that has failed to solve the Queen City's financial woes.

Ingram amazingly wanted the county to stop the RFP process and just award the contract to him.

Ingram did not stop with Controller Barron. He called Finance Director Vic Mazziotti, Purchasing Officer Kathryn Anderson and Director of Administration John Conklin. He even put the squeeze on Council member Charles Dertinger, reportedly calling him at least six times.

The committee making the recommendation in this case included Mazziotti, Anderson and Conklin. Council Prez Ann McHale, Assistant Solicitor Dave Backenstoe and Bethlehem official Mark Sivac also participated. After two meetings, HVS was their unanimous recommendation. The minutes are quite revealing.

"John Ingram continues calling our people about the job and downgrading HVS. John C[onklin] said we need to practice the cone of silence with vendors and Ingram should be told this is our policy and stop. John feels Ingram's proposal should be thrown out.

"Ann said Ingram does not have the insurance that is needed; therefore, the proposal does not meet the requirements. Ann also feels Ingram's proposal should be thrown out.

"Ann would like a local vendor, but everything with Ingram is too negative."

Ingram, when he learned he was rejected by the committee, actually asked County Executive John Stoffa to override their recommendation.

"According to Ann McHale and Charles Dercinger (sp?), the final decision has been made on who is going to be awarded the contract to appraise the Bethlehem Sands Casino---and they said it was made, this morning, in favor of HVS out of San Francisco---so much for the County saving money on valuation services! I didn't know that McHale was on the committee making the decision until yesterday, and I called her for the first time, early this afternoon. She was very unresponsive, except to tell me the final decision had been made, the public announcement would be made on Monday, and that she really didn't want to talk to me.

"I thought the final decision was yours to make, or do you just go along with whatever they decide to do? Anyway, if that is the final decision, I'm very disappointed, of course. If so, that will be the first, only and last RFP I'll ever respond to---who needs the wasted time? If you have the ability to override their decision, I'd still like the opportunity to work with the County on the appraisal."

Stoffa refused to go against his own committee, so Ingram threatened to complain to council and the press. They refused to be bullied. Dertinger and McHale, whom I've often criticized, resisted this undue influence.

In this case, what you know mattered a lot more than who you know.