Sidelines Tree Service, LLC v. DOT

IN THE COMMONWEALTH COURT OF PENNSYLVANIA
Sidelines Tree Service, LLC, :
Petitioner :
:
v. : No. 716 C.D. 2021
: Submitted: September 15, 2022
Department of Transportation, :
Respondent :
BEFORE: HONORABLE ANNE E. COVEY, Judge
HONORABLE ELLEN CEISLER, Judge
HONORABLE STACY WALLACE, Judge
OPINION NOT REPORTED
MEMORANDUM OPINION
BY JUDGE WALLACE FILED: December 15, 2022
Sidelines Tree Service, LLC (Sidelines) petitions for review (Petition) of the
June 15, 2021 final determination of the Secretary of Transportation (Secretary)1
denying Sidelines’ protest of the rejection of its bid submission in response to the
invitation for bids (request for quotes or RFQ) issued by the Pennsylvania
Department of Transportation (PennDOT). PennDOT motions to dismiss (Motion)
Sidelines’ Petition asserting that Sidelines’ appeal is moot or, in the alternative, is
barred by collateral estoppel due to this Court’s decision in Sidelines Tree Service,
1
The Acting Executive Deputy Secretary of Transportation served as designee for the
Pennsylvania Secretary of Transportation in the present matter. According to Section 1711.1(f) of
the Commonwealth Procurement Code (Procurement Code), 62 Pa. C.S. §§ 101-2311, the head of
the purchasing agency or his designee shall issue a written determination within 60 days of a bid
protest and this determination constitutes the final order of the purchasing agency. 62 Pa. C.S. §
1711.1(f). Accordingly, we refer to the determination in this case as that of the Secretary.
LLC v. Department of Transportation (Pa. Cmwlth., No. 134 C.D. 2021, filed
September 20, 2021) (Sidelines I). For the following reasons, we deny PennDOT’s
Motion and affirm the Secretary’s final determination.
I. BACKGROUND
A. Eight County RFQs
A full recitation of the underlying facts may be found in Sidelines I, slip op.
at 1-15. For our present analysis, we briefly summarize the litigation preceding the
present appeal as follows. In August 2020, Sidelines responded to RFQs issued by
PennDOT to procure line-clearance tree-trimming services in eight counties in the
Commonwealth (Eight County RFQs). Sidelines I, slip op. at 2. Despite submitting
the lowest bid for the projects, PennDOT determined that Sidelines was not a
responsible bidder2 for the award of the multiple purchase orders. Reproduced
Record (R.R.) at 38a. Sidelines protested the non-responsibility determination, and
the Secretary upheld PennDOT’s determination. Id. Sidelines appealed the final
determination to this Court, and we affirmed. See Sidelines I.
In affirming the Secretary’s non-responsibility determination, we held that the
Secretary’s determination was based on substantial evidence. Specifically, the
record showed Sidelines’ history of poor performance precluded status as a
responsible bidder. Sidelines I, slip op. at 19. Sidelines had performed work for
PennDOT without ensuring its employees maintained required certifications. Id.
Sidelines failed to meet its contractual requirements such as maintaining insurance
coverage during its previous work for PennDOT. Id. at 20. Sidelines failed to
2
According to Section 103 of the Procurement Code, a “responsible bidder” is defined as a “bidder
that has submitted a responsive bid and that possesses the capability to fully perform the contract
requirements in all respects and the integrity and reliability to assure good faith performance.” 62
Pa. C.S. § 103.
2
timely provide contracted personnel and services to PennDOT. Id. Notably, we
considered that Sidelines provided PennDOT documentation of required Tree Care
Industry Association (TCIA) membership and certifications that TCIA ultimately
disputed were valid. Id. Additionally, Sidelines acknowledged that employees had
performed work on a prior PennDOT contract without necessary training or
certifications. Id. at 21. Thus, the record showed substantial evidence to support
PennDOT’s non-responsibility determination.
In Sidelines I, we also concluded that the Secretary did not abuse her
discretion by refusing to hold an evidentiary hearing. Sidelines argued that an
evidentiary hearing would have allowed it to support its assertion that it could satisfy
the requirements of the Eight County RFQs and cross-examine PennDOT personnel
as to the reasons for its determination. We disagreed, holding that Sidelines failed
to implicate any conflict or dispute of material fact and that it remained at the
Secretary’s “sole discretion” to determine whether a hearing was necessary on a bid
protest.3
B. Clinton County RFQ
The relevant facts of the present litigation are as follows. In the Spring of
2021, PennDOT sought tree trimming and stump removal services in Clinton County
(Clinton County RFQ). R.R. at 37a-38a. To procure these services, PennDOT
issued the Clinton County RFQ to providers qualified under the statewide Invitation
to Qualify (ITQ). R.R. at 38a. In response to PennDOT’s Clinton County RFQ,
Sidelines, which remained ITQ qualified, submitted the lowest quote for the Clinton
County RFQ. R.R. at 38a.
3
Where the record contains sufficient unchallenged facts to support the determination, a bid protest
hearing is not required. Glasgow, Inc. v. Pa. Dep’t of Transp., 851 A.2d 1014 (Pa. Cmwlth. 2004).
3
PennDOT rejected Sidelines’ quote and by letter dated April 9, 2021, notified
Sidelines of its determination that Sidelines was not a responsible bidder for the
Clinton County RFQ. R.R. at 5a. PennDOT reasoned that Sidelines did not provide
sufficient documentation of the Occupational Safety and Health Administration
(OSHA) training required to work near energized electrical lines, which was
required by the Clinton County RFQ Statement of Work (SOW). R.R. at 163a. The
SOW specified that “proper training and personnel needed to work around utility
lines as required by . . . OSHA . . . [are] the responsibility of the Contractor.” R.R.
at 163a. In addition, PennDOT noted that its determination was based, in part, on
its communications with TCIA, which is responsible for the training, testing, and
issuance of certificates for properly trained personnel. Id. PennDOT noted concern
about the veracity of the information Sidelines submitted to PennDOT regarding its
TCIA certifications and concern about Sidelines’ ability to meet the requirements of
the contracts relative to personnel, good faith performance, and safety. R.R. at 5a-
6a.
On April 16, 2021, Sidelines submitted its bid protest to the Secretary pursuant
to Section 1711.1 of the Procurement Code, 62 Pa. C.S. § 1711.1.4 R.R. at 2a.
Sidelines argued that PennDOT’s non-responsibility determination was “erroneous”
because it relied on a purported failure of Sidelines to submit worker certifications.
Id. However, Sidelines claimed it was not required to submit certifications with the
bid proposal. Id. Sidelines asserted that it provided the required certifications by
email to PennDOT. Id. Additionally, Sidelines asserted that PennDOT’s
determination was improper because it was based on Sidelines’ performance during
4
According to Section 1711.1(a) of the Procurement Code, a “bidder . . . that is aggrieved in
connection with the solicitation or award of a contract . . . may protest to the head of the purchasing
agency in writing.” 62 Pa. C.S. § 1711.1(a).
4
prior contracts. Id. Specifically, Sidelines claimed it was improper for PennDOT to
rely on its admission during the Eight County RFQs that its employees had
performed services without required certifications. Id. Sidelines requested a hearing
regarding PennDOT’s “allegation” of non-responsibility. Id. Sidelines requested
the opportunity to present evidence of its responsibility and professional
qualifications to perform the work contemplated by the Clinton County RFQ. Id. at
3a.
On April 30, 2021, PennDOT responded to Sidelines’ protest, contending that
Sidelines had demonstrated a lack of responsibility to be awarded the work
requested. R.R. at 37a. PennDOT alleged that Sidelines failed to meet all Clinton
County RFQ requirements, specifically with regards to safety and compliance with
OSHA standards. R.R. at 41a. According to PennDOT, the work to be performed
at the Clinton County RFQ site was to be performed adjacent to power lines. R.R.
at 41a. Because Sidelines had previously submitted TCIA certifications to
PennDOT that TCIA asserted were invalid and because Sidelines had previously
admitted to not having required certifications, PennDOT reached out to TCIA
regarding the submitted certifications. R.R. at 42a. Again, TCIA confirmed that the
TCIA certifications Sidelines provided to PennDOT were not valid because test
results and other conditions were not met. R.R. at 42a.
PennDOT further argued that it necessarily considered Sidelines’ reliability
in its responsibility determination and that it properly considered its past experiences
with Sidelines and Sidelines’ past performance on its contracts. Id. PennDOT noted
that Sidelines, during the Eight County RFQs, admitted that Sidelines’ employees
engaged in tree trimming without the required certifications in contravention of
OSHA requirements and the terms and conditions of their purchase orders with
5
PennDOT. R.R. at 43a. In conclusion, PennDOT argued that Sidelines knew its
employees were required to be trained and certified by TCIA, but that “it failed to
do so in the past, and still [has] not obtained the certifications it needs; accordingly,
it lacks the responsibility to be awarded work[.]” R.R. at 43a.
William G. Gipe (Gipe), Designated Senior Manager and Division Chief of
the Materials and Services Management Division for PennDOT’s Bureau of Office
Services, who served as contracting officer for purposes of Section 1711.1 of the
Procurement Code, 62 Pa. C.S. § 1711.1, and as the custodian of records pertaining
to the procurement at issue, attested in support of PennDOT as follows. R.R. at 44a.
Regarding the non-responsibility determination, Gipe attested that the determination
was, in part, premised on Sidelines’ admission that it had previously performed work
for PennDOT with employees who lacked necessary certifications. R.R. at 46a.
Because the work to be performed under the Clinton County RFQ was to take place
adjacent to or under overhead power lines, PennDOT requested proof from Sidelines
that its employees had obtained TCIA certifications after the opening of the Clinton
County RFQ. Id. at 47a. Again, Sidelines provided what it purported to be TCIA
certifications; however, TCIA advised PennDOT that Sidelines never submitted
required test results or other necessary materials and, therefore, the certifications
were not valid. Id.
Gipe also attested that he was aware of multiple occasions where Sidelines
dropped required workers’ compensation and commercial general liability insurance
coverage during its performance of work for PennDOT. Id. at 47a. Additionally, he
attested that Sidelines failed to meet contractual obligations by failing and refusing
to timely provide personnel and services to meet PennDOT’s needs. Id. Gipe
6
attested to Sidelines’ historic refusals and failures to meet contractual requirements
in prior contracts with PennDOT. Id.
On June 15, 2021, the Secretary issued a determination denying Sidelines’
protest. R.R. at 162a. The Secretary determined that Sidelines’ protest lacked merit
under Section 1711.1 of the Procurement Code and that it failed to meet its burden
of proving that PennDOT committed error, acted arbitrarily or capriciously, or
abused its discretion, which was necessary to support a grant of relief under the
Procurement Code. Id. at 168a-69a. The Secretary, in agreement with PennDOT,
noted that it is “abundantly clear that it is imperative to consider the history of a
vendor based on past performances and past experiences with contractors/vendors
when making a determination of whether or not a vendor is ‘responsible.’” Id. at
165a-66a.
II. ISSUES ON APPEAL
On appeal, Sidelines requests that this Court reverse the Secretary’s
determination and remand this matter to PennDOT for an evidentiary hearing on the
basis that (1) PennDOT’s determination is not based upon substantial evidence and
(2) PennDOT abused its discretion by failing to grant Sidelines’ request for an
evidentiary hearing. In its first argument, Sidelines argues that PennDOT’s non-
responsibility determination lacks support by substantial evidence, asserting that
PennDOT’s only rationale for its determination in this case results from
circumstances that occurred during the Eight County RFQs and previous contracts.
Sidelines’ Br. at 12. Sidelines contends that PennDOT is attempting to use its
admission that it performed contracts without the required certifications in the past
“to justify rejection of Sidelines’ bid.” Id. at 13. In its second argument, Sidelines
asserts that PennDOT abused its discretion by denying Sidelines’ request for an
7
evidentiary hearing because “there is nothing in the record to connect the admitted
and self-reported technical non-compliance by Sidelines on a different contract in
2019 with its prospective ability to complete the performance of an entirely new one
county contract[, the Clinton County RFQ,] one and a half years later.” Sidelines’
Br. at 14.
In response to Sidelines’ Petition, PennDOT motions to dismiss Sidelines’
appeal arguing that it is moot or, in the alternative, that it is barred by the doctrine
of collateral estoppel. PennDOT contends that there are “no material differences in
fact or law between the first and second appeals filed by Sidelines.” PennDOT’s Br.
at 6. Specifically, PennDOT alleges that in the two cases, the “services were the
same, the facts were the same, the procurement protest was the same[,] and the final
result in the first appeal supports the same result in the second appeal.” Id. at 6.
In response to PennDOT’s Motion, Sidelines argues that its Petition cannot be
dismissed for mootness because Sidelines I did not change the facts or law with
respect to the present controversy. Sidelines’ Br. at 10. Additionally, Sidelines
argues that its Petition is not barred by collateral estoppel because the issue in the
present case “is not identical” to the issue litigated and decided in Sidelines I.
Sidelines’ Br. at 12. Specifically, Sidelines points out that the Eight County RFQs
dealt with eight specific contracts, while the Clinton County RFQ involves a single
contract and, therefore, issues regarding manpower and coverage are not raised in
this case. Id. at 11.
III. DISCUSSION
Section 1711.1(i) of the Procurement Code, 62 Pa. C.S. § 1711.1(i), sets forth
this Court’s standard for deciding appeals from final determinations concerning bid
protests. This Court will affirm the determination of the purchasing agency so long
8
as it is clear from the record certified by the purchasing agency “that the
determination is [not] arbitrary and capricious, an abuse of discretion or [ ] contrary
to law.” Id.
Initially, we do not agree with PennDOT’s assertion that Sidelines’ appeal is
moot or barred by the doctrine of collateral estoppel. First, we address whether this
case is moot. Generally, an actual case or controversy must exist at all stages of a
proceeding or the case will be dismissed as moot. Fraternal Order of Police v. City
of Phila., 789 A.2d 858 (Pa. Cmwlth. 2002). A case or controversy exists where
there is a legal controversy that is not hypothetical, affects individuals in a concrete
manner, and has sufficiently adverse parties. Dow Chemical Co. v. United States
Env’t Prot. Agency, 605 F.2d 673, 678 (3d Cir. 1979). The issue of mootness often
arises where litigants have standing at the outset of litigation, but changes in the facts
or law during the pending litigation deprive a litigant of a necessary stake in the
outcome. In re Gross, 382 A.2d 116, 119 (Pa. 1978). Where a change in the facts
or law render it impossible for the Court to grant relief, the issue is moot. Id. at 120.
No changes of fact or law in this pending litigation have occurred, and a controversy
continues to exist which this Court can resolve. Accordingly, Sidelines’ appeal is
not moot.
Turning to PennDOT’s claim that collateral estoppel applies, collateral
estoppel forecloses relitigating an issue, but only in cases where the following
criteria are met:
(1) the issue in the prior adjudication was identical to the one presented
in the later action; (2) there was a final judgment on the merits; (3) the
party against whom the plea is asserted was a party or in privity with a
party to the prior adjudication; (4) the party against whom it is asserted
has had a full and fair opportunity to litigate the issue in a prior action;
9
and (5) the determination in the prior proceeding was essential to the
judgment.
Callaghan v. Workers’ Comp. Appeal Bd. (City of Phila.), 750 A.2d 408, 412 (Pa.
Cmwlth. 2000). Collateral estoppel is designed to “protect[ ] litigants from
assuming the burden of re-litigating the same issue with the same party, and [to]
promot[e] judicial economy through preventing needless litigation.” McNeil v.
Owens-Corning Fiberglas Corp., 680 A.2d 1145, 1148 (Pa. 1996). Under the
doctrine of collateral estoppel, where questions of fact that are “essential to the
judgment” are litigated by the parties and “determined by a final valid judgment, the
determination is conclusive between the parties in any subsequent action on a
different cause of action.” Krouse v. Workers’ Comp. Appeal Bd. (Barrier Enter.,
Inc.), 837 A.2d 671, 675-76 (Pa. Cmwlth. 2003) (citation omitted).
We acknowledge that Sidelines I and the present appeal concern nearly
identical claims regarding PennDOT’s determination of non-responsibility. Despite
this fact, the contracts sought by Sidelines were separate contracts for different
counties at different times. The Eight County RFQs and the Clinton County RFQ
each involve a separate and distinct contract opportunity for Sidelines. Sidelines
maintains the right to appeal the Secretary’s non-responsibility determination for
each RFQ. Accordingly, Sidelines’ appeal is not barred by the doctrine of collateral
estoppel.
We turn to the merits of Sidelines’ appeal. In its first issue, Sidelines appeals
the Secretary’s determination, arguing that PennDOT’s reliance on its past contracts
did not produce substantial evidence sufficient to support its non-responsibility
determination.
Under Section 512(g) of the Procurement Code, which governs competitive
sealed bidding, a purchasing agency shall award a contract to the “lowest responsible
10
bidder.” 62 Pa. C.S. § 512(g). Under Section 103 of the Procurement Code, a
“responsible bidder” is defined as a “bidder that has submitted a responsive bid and
that possesses the capability to fully perform the contract requirements in all respects
and the integrity and reliability to assure good faith performance.” 62 Pa. C.S. §
103. As this Court has noted, the lowest responsible bidder is “not necessarily . . . .
the one whose bid on its face is lowest in dollars, but includes financial
responsibility, [and] also integrity, efficiency, industry, experience, promptness, and
the ability to successfully carry out the particular undertaking[.]” Berryhill v. Dugan,
491 A.2d 950, 952 (Pa. Cmwlth. 1985) (citation omitted).
Here, substantial evidence supports the Secretary’s non-responsibility
determination. As we outlined in Sidelines I, in previous contracts with PennDOT,
Sidelines admittedly performed work without ensuring its employees maintained
required safety certifications and insurance coverage. Sidelines failed to timely
provide contracted personnel and services to PennDOT. Additionally, the record
showed not only the previous issues with the TCIA certifications from the Eight
County RFQs, but also that again with respect to the Clinton County RFQ, TCIA
confirmed that the submitted certifications were not valid. See R.R. at 42a. Thus,
Sidelines’ assertion that the Secretary only relied on information from its past
contracts is without merit. Just as it did regarding the Eight County RFQs that we
addressed in Sidelines I, Sidelines again provided PennDOT documentation of TCIA
membership certifications that were not valid. The Secretary properly considered
Sidelines’ contract history with PennDOT, as well as its conduct related to the
Clinton County RFQ. Thus, substantial evidence supports the Secretary’s non-
responsibility determination.
11
In its second issue, Sidelines argues the Secretary abused her discretion by
refusing to hold an evidentiary hearing. Under Section 1711.1(e) of the Procurement
Code, the Secretary has “sole discretion” to determine whether a hearing is necessary
to decide a bid protest. 62 Pa. C.S. § 1711.1(e). The Secretary’s decision will not
be reversed unless it is made “with bad faith, fraud, capricious action[,] or abuse of
power.” Durkee Lumber Co. v. Dep’t of Conservation & Nat. Res., 903 A.2d 593,
597 (Pa. Cmwlth. 2006). A hearing is not required where the record contains
sufficient unchallenged facts necessary for the Secretary to make the determination.
Id. (citation omitted). Where a protestant fails to dispute the contents of the
submissions to the Secretary and does not raise any questions of material fact, the
Secretary is not required to hold a hearing. Id.Here, as the Secretary properly noted, Sidelines fails to challenge or dispute
any material facts. As the basis of its argument, Sidelines asserts that if “PennDOT
is permitted to reject bids without a hearing on an ongoing basis as it has attempted
to do here, it has in effect debarred Sidelines as a contractor without submitting that
decision to the requirements of the debarment process as set forth in the
[Procurement Code].” Sidelines’ Br. at 14-15. We reject this argument. The law
permits the Secretary to consider more than just the facts related to the RFQ at issue.
The Secretary is to consider additional factors including “integrity, efficiency,
industry, experience, [and] promptness[,]” see Berryhill, 491 A.2d at 952, which
necessarily includes factors related to PennDOT’s contractual history with Sidelines.
Sidelines does not dispute the material facts relied upon by the Secretary. Therefore,
the Secretary did not abuse her discretion in denying Sidelines’ request for an
evidentiary hearing.
12
Accordingly, we deny PennDOT’s Motion and affirm the Secretary’s June 15,
2021 final determination.
______________________________
STACY WALLACE, Judge
13
IN THE COMMONWEALTH COURT OF PENNSYLVANIA
Sidelines Tree Service, LLC, :
Petitioner :
:
v. : No. 716 C.D. 2021
:
Department of Transportation, :
Respondent :
ORDER
AND NOW, this 15th day of December 2022, the Department of
Transportation’s Motion to Dismiss is DENIED and the June 15, 2021 final
determination of the Secretary of Transportation for the Pennsylvania Department
of Transportation is AFFIRMED.
______________________________
STACY WALLACE, Judge