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Qualifying Statements in a Proposal Rendered the Proposal Non-responsive

In Pepco Energy Services, Inc. v. Department of General Services, 49 A.3d 488 (Pa. Commw. Ct. 2012), the Commonwealth Court held that the Department of General Services (“DGS”) properly declared Pepco Energy Services, Inc.’s (“Pepco”) proposal to DGS non-responsive based on certain qualifying statements contained in its bid. DGS had issued a Request for Proposal for a Design-Build Contractor for a Combined Heating, Cooling, and Power Plant project to serve the State Correctional Facility in Montgomery County (SCI-Phoenix). In its proposal, Pepco conditioned its proposal on having the opportunity to negotiate certain terms of the agreement with DGS prior to being selected. After seeking clarification of these qualifications from Pepco, DGS rejected Pepco’s proposal as being non-responsive. Pepco pursued a bid protest and ultimately appealed to the Commonwealth Court based on the language in section 513(g) of the Procurement Code, which states that the “responsible offeror” that submits the proposal that is determined “to be the most advantageous” to the owner “shall be selected for contract negotiation.” 62 Pa. C.S. § 513(g).

The Commonwealth Court agreed with DGS and ruled that Pepco’s attempt to negotiate terms of contract prior to selection rendered its proposal non-responsive. This decision represents another step by the Commonwealth Court to fairly implement the request for proposal process contemplated by the Procurement Code.