Justia Government Contracts Opinion Summaries

Articles Posted in Supreme Court of Pennsylvania

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In this case, the issue presented for the Pennsylvania Supreme Court's review was whether the Commonwealth Court disregarded the law when it vacated a grievance arbitration award based on its independent interpretation of the parties’ collective bargaining agreement (“CBA”). Millcreek Township Educational Support Personnel Association (the “Association”) and Millcreek Township School District (the “District”) were parties to a CBA that became effective on July 1, 2011, and was set to expire on June 30, 2016. Negotiations for a successor CBA began January 26, 2016 when the Association offered its initial proposal to the District. Approximately one month later, the District presented a counter proposal in which it sought, among other items, to eliminate a no subcontracting provision. The Association rejected this proposal. On March 29, 2016, with successor CBA negotiations ongoing between the Association and the District, the District issued a request for proposals (“RFP”) seeking quotes from prospective bidders for the provision of custodial labor services. On April 7, 2016, upon learning that the District had issued an RFP to subcontract the bargaining unit’s work, the Association filed a grievance with the District. Pursuant to the Pennsylvania Supreme Court’s decisions under the Public Employee Relations Act (“PERA”), a reviewing court had to apply the highly deferential two-prong “essence test” to grievance arbitration awards: (1) the court had to decide whether the issue was encompassed by the CBA; and (2) the court had to uphold the arbitrator’s award if the arbitrator’s interpretation could rationally be derived from the CBA. Subject to a narrow exception for awards that violate a dominant public policy, proper application of the essence test prohibits a court from vacating an arbitrator’s award unless “the award indisputably and genuinely is without foundation in, or fails to logically flow from, the [CBA].” The Supreme Court had "no trouble" concluding that the award in this case drew its essence from the CBA and because no public policy would be violated by its enforcement, it reversed the decision of the Commonwealth Court. View "Millcreek Twp SD v. Millcreek Twp ESPA" on Justia Law

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Appellant City of Allentown (City) contracted with appellee A. Scott Enterprises, Inc. (ASE), to construct a new public road. After arsenic-contaminated soil was discovered at the worksite, the City suspended work on the project. Following testing, it was determined construction could resume if precautions were taken. Accordingly, the City instructed ASE to obtain revised permits and proceed with the project. However, the existing contract did not include terms regarding the potential for contaminated soil, despite the fact the City was aware there might be contamination prior to entering into the contract, and ASE declined to proceed, explaining it would incur substantial additional costs due to the contaminated soil. The parties made several attempts to reach an agreement in which ASE would continue the construction, but to no avail. Consequently, ASE sued the City to recover its losses on the project, alleged breach of contract, and sought compensation under theories of quantum meruit and unjust enrichment, as well as interest and a statutory penalty and fee award for violations of the prompt pay provisions of the Procurement Code. After a trial, a jury found the City breached its contract with ASE and also withheld payments in bad faith. In this discretionary appeal, the issue this case presented for the Supreme Court's review was whether an award of a statutory penalty and attorney fees under the prompt payment provisions of the Commonwealth’s Procurement Code was mandatory upon a finding of bad faith, irrespective of the statute’s permissive phrasing. The Court held such an award was not mandatory, and therefore reversed the order of the Commonwealth Court and remanded the case to the trial court for further proceedings. View "A. Scott Enterprises v. City of Allentown" on Justia Law