e-Edition: January 2018

“BEST VALUE” PROCUREMENT COMES TO PHILADELPHIA

By Jason A. Copley and Robert John O’Brien – Cohen Seglias

 

On May 16, 2017, Philadelphia voters approved a ballot measure amending the Home Rule Charter (the “Amendment”) to allow the City to enter into contracts for certain goods and services based on “best value.” Best value contracting is the practice used by the federal government, many states, and nearly all of America’s twenty largest cities. But what does “best value” mean and how will it change the way contractors bid on City projects?

 

  In evaluating bids for certain professional services, such as legal or IT services, the City has long been permitted to consider factors beyond just cost — considerations like vendor history or past performance. However, before passage of the ballot measure, the City’s Home Rule Charter required construction-related goods and services contracts valued

at greater than $25,000 to be awarded to the “lowest responsible” bidder. Under this standard, as long as the contractor was deemed “responsible” enough to perform the scope of work, the City was legally obligated to award the contract to whoever submitted the lowest bid. The sole consideration was essentially the bid amount.

 

Critics of the old system argued that it failed to capture a number of important factors that would help provide the City with the most “bang for its buck,” such as vendor history, past performance, budget, schedule, and workforce diversity. On the other hand, an argument often cited against the “best value” system was that allowing the City to account for criteria besides cost could lead to cronyism or awarding

contracts based on other improper considerations.

 

From a practical standpoint, the Amendment should not result in earth-shattering changes for contractors who submit bids for City work. Indeed, most contracts will likely still be awarded to the lowest responsible bidder. The best value standard can only “kick in” and be applied when the Procurement Commissioner determines that awarding the contract to the lowest bidder would not yield the best value to the City. The City presently anticipates only about 5% of contracts (or 10 to 12 on an annual basis) will be affected by the transition to the best value system.

  

Pursuant to the Amendment, the Procurement Commissioner is tasked with considering several factors in addition to price.

 

Those factors include:

 

• integration of technical or professional service elements;

• quality differences among products and services;

• incorporation of City contracting objectives, including participation of disadvantaged business enterprises; and

• “other attributes” that make price alone a poor indicator of value.

 

The Amendment also directs the Procurement Department to propound regulations identifying additional factors to be considered in making a “best value” award. The proposed regulations will be posted for public comment, so those affected will have the opportunity to provide feedback.

 

Beyond the “best value” factors, the new system includes more disclosure obligations that must be made at the time of bid submission. The obligations are as follows (codified in § 17-400 of the Philadelphia Code):

 

• campaign contributions made by the contracting company (if submitting a bid on behalf of the company) to City politicians;

• campaign contributions made by the individual or an immediate family member (if submitting the bid as an individual) to City politicians;

• the name of consultant(s) used in obtaining City contracts;

• campaign contributions made by the consultant(s);

• the names of subcontractors that will be used (in the event the contract is awarded to the bidder);

• whether City employee(s) requested money, services, or something of value; and

• whether City employee(s) provided advice on satisfying minority, women, disabled, or disadvantaged business participation goals.

 

Companies contributing $11,900 or more per calendar year to a City politician or political candidate, as well as individuals contributing $3,000 or more per calendar year, will not be eligible to be awarded contracts valued at $25,000 or greater for businesses and $10,000 or more for individuals, during the candidate’s term in office.

 

The City expects to post its first best value contract opportunity within the next six to nine months. Contractors planning to submit bids should track their contributions to City candidates and officeholders and watch out for the new regulations from the Procurement Department.

 

If readers have further questions or concerns regarding the new system, please do not hesitate to reach out to us.

 

Jason is a Partner and Robert is an Associate in the Construction Group. They can be reached at 215.564.1700 or

jcopley@cohenseglias.com

and robrien@cohenseglias.com.

 

For Brownfield Redevelopment opportunities, the Contractors requirement to identify the Environmental Consultant under those rules could be of significant benefit when evaluating past performance and the type of professional services to be included with the bid.  Contractors need to inform their consultants of the new requirements for disclosure of political contributions so there are no potential issues with a potential award of contract.  RT will keep our Contractors posted as this Amendment is finalized.

 

-Walter Hungarter

whungarter@rtenv.com

 

PADEP ISSUES TRIENNIAL REVIEW OF WATER QUALITY STANDARDS

On the October 21, 2017 Pennsylvania Bulletin, the Pennsylvania Department of Environmental Protection issued its Triennial Review of Water Quality Standards.  Included are changes to the following criteria:

 

  • Ammonia criteria

  • Bacteria criteria

  • Chloride criteria

 

Also included are updates on the list of substances and there is information on human health and aquatic life criteria for toxic substances.

 

Please use the following link to view the October 21, 2017, Pennsylvania Bulletin Notices

https://www.pabulletin.com/secure/data/vol47/47-42/index.html

 

CHANGES TO PENNSYLVANIA TIER II REPORTING - KEY TIPS FOR RT CLIENTS

EPA has amended the Tier II reporting rule, and the Pennsylvania Tier II Reporting System (PATTS) was required to implement the change by January 1, 2018.  The change will impact every facility report.

 

The current 5 potential physical and/or health hazards (Fire/Pressure/Reactivity/ Immediate/Delayed-Chronic) for a hazardous substance will be replaced by the 24 hazard categories implemented under the Globally Harmonized System (GHS).  The only way to identify these hazards is to refer to the newer Safety Data Sheet (SDS) which replaced the Material Safety Data Sheet (MSDS).

 

Until this change, EPA did not require a newer SDS for a Tier II report if an MSDS was available. However, this change will require that you have an SDS uploaded for each hazardous substance.  Pennsafe will not have a generic library of SDS in the new version of PATTS, so you will not be able to locate an SDS in their system. You may request SDS from your supplier or search for them on the internet.  If you have not been uploading the newer SDS for your hazardous substances, please start acquiring PDFs of these now and uploading them to system to replace the old MSDS.  

 

Also, please be aware that you must read through the SDS to determine if there is a Hazard Not Otherwise Classified (HNOC).  While specific hazards are clearly identified by pictograms and warnings, the SDS may also indicate if there are any potential hazards that do not fit the classifications, which would qualify as a HNOC.  

 

Examples of HNOCs:  

 

  - gasoline has the potential to collect static electricity

 

  - certain solvents when applied to a cloth may cause that cloth to become combustible

 

  - certain solders when heated above the recommended temperature may cause noxious fumes.  

 

Please read through the SDS to verify if any warnings of this type are listed, because these would require you to check off HNOC as a hazard.

 

Once PATTS goes live with the new version, all reports submitted thereafter will require these new hazard categories. For facilities with multiple hazardous substances, you may want to develop a spreadsheet that will make it to easier prepare yourself and use as a reference to update your hazardous substance information.  

 

This will be a challenging reporting change for both facilities and for Pennsafe.  If you have questions, please contact the PA Department of Labor & Industry, Bureau of Occupational Health & Safety Pennsafe Program staff at 717-783-2071 Option 0.

 

Larry W. Bily


 

 


 

PA Updates