With harsh winter weather just around the corner, emergencies will likely be right behind the snow and ice.
So what are the rules for emergency contracting in the public sector? Are bids required? How about public notice? And can an authority award a contract to a vendor of its choice based on a current work relationship? Let’s explore a few scenarios.
A streambank erodes and exposes critical sanitary sewer lines. Does the authority put out bids and hope the lines don’t break while waiting for prices? Or a chemical feed system fails in a wastewater treatment plant and requires emergency repairs. Does the authority need to prepare detailed specifications and wait for pricing? What if a sinkhole causes a water main rupture and severely damages the road. Can a local authority restore water service and the road without waiting several weeks for competitive pricing?
Under normal circumstances, municipal authorities must follow stringent requirements when contracting such services as construction and maintenance and when purchasing supplies and equipment. However, in the dire situations described above, can a municipal authority bypass the standard rules of competitive bidding and award an expedited contract? The answer is yes – with some caveats.
When an emergency threatens the health, welfare, or safety of citizens and a quick response is required, the authority can usually forego the formal rules of public bidding, such as timing of award and public notice.
The Pennsylvania General Local Government Code oversees bidding by local governments, such as townships, boroughs, and municipal authorities. The law addresses bidding emergencies by stating that “notice may be waived if the authority determines that an emergency exists which requires the authority to purchase the supplies and materials immediately.” 53 P.S. § 5614.
An emergency relaxes the requirement for notice and advertising. However, the looser rules are somewhat limited.
Think of it this way: Best practices, such as inviting pricing from one or more vendors, are always encouraged, especially if they don’t adversely affect the authority’s timeliness in addressing the emergency. After all, if a public owner can invite pricing from one contractor or vendor in an emergency, why can’t it seek pricing from other contractors at the same time?
This principle is aptly illustrated in the Commonwealth Procurement Code at 62 Pa.C.S. § 516, which states:
“The head of a purchasing agency may make or authorize others to make an emergency procurement when there exists a threat to public health, welfare, or safety or circumstances outside the control of the agency create an urgency of need which does not permit the delay involved in using more formal competitive methods. Whenever practical, in the case of a procurement of a supply, at least two bids shall be solicited. A written determination of the basis for the emergency and for the selection of the particular contractor shall be included in the contract file.”
Therefore, the Procurement Code recognizes that in the face of an emergency, competition and transparency are still good practices on behalf of governmental agencies.
Documentation is a Must
The key to moving away from stringent contracting requirements is justifying and documenting your emergency.
As a general rule of thumb, a situation or condition that adversely affects the health, safety, or welfare of a community, if not addressed immediately, is considered an emergency. For example, a broken sewer main that is discharging sewage into a stream would be considered an emergency. However, an old sewer line that is in extremely poor condition, but is not leaking, would not.
In Upper Darby Twp. v. Ramsdell Construction Co., an older but still applicable court decision, the court noted “statutory requirements that municipalities must have contracts in writing and advertise for bids have been held not to apply to a situation where there is an emergency.” But the court also added: “The important thing, therefore, in these cases would seem to be the determination as to whether or not there was an emergency.”
Therefore, one could easily argue that the waiver of notice in the statute for authorities is equally applicable to the authority’s purchase of construction services in the case of a declared emergency.
When contracting at the county level, Pennsylvania statutes provide that bidding and notice requirements “need not be followed in cases of emergency,” but the commissioners or other specified officials, depending on the type of municipality, must pass a resolution declaring the actual emergency.
In 1954, the solicitor of the City of Philadelphia issued a legal opinion authorizing emergency purchases by the city’s procurement department under the following conditions: “There was a truly unforeseen and urgent emergency; the authorization was for a specific purchase; the specifications for the purchase were approved in writing; and the normal bidding procedures were followed except to the extent precluded by the emergency.”
There is no reason why this standard is not equally applicable in the present day.
A Best Practice: Contracts in Advance
One approach that many authorities use is publicly soliciting for “on-call emergency services” as part of their normal annual procurements.
By taking this approach, many of the normal services encountered during an emergency are quantified, allowing competition to occur when the review of qualifications and pricing does not affect the timing of repairs. This methodology can define labor and equipment rates along with the acceptable contractor mark-up of required materials. When an emergency does occur, the authority can simply authorize the selected provider to proceed with work based on the previously awarded contract terms.
The bottom line is that agencies do have the ability to reduce public notices and other technical rules of public bidding during a documented emergency. An authority, however, must be careful to declare and substantiate the existence of a real emergency and should, when the situation allows, encourage competition even if the requirements of notice and advertising are waived.
A PMAA-endorsed program, PennBid is the region’s leader in e-procurement and online bid management programs. Provided at absolutely no cost to public agencies and design/consulting firms, PennBid has opened doors for many to take advantage of electronic procurement tools generally not available due to high cost and system complexity. For more information on PennBid, contact us or request a 30 minute overview.