IN THE COMMONWEALTH COURT OF PENNSYLVANIA

Michael Regester, President Regester’s :

Heating and Air Conditioning, LLC, :

Petitioner :

:

v. : No. 2344 C.D. 2015

: Submitted: August 12, 2016

Department of Military :

and Veterans Affairs, :

Respondent :

BEFORE: HONORABLE P. KEVIN BROBSON, Judge

HONORABALE JULIA K. HEARTHWAY, Judge

HONORABLE DAN PELLEGRINI, Senior Judge

OPINION NOT REPORTED

MEMORANDUM OPINION

BY JUDGE BROBSON FILED: October 31, 2016 

Petitioner Michael Regester, President of Regester’s Heating and Air 

Conditioning, LLC (Regester), petitions for review of an order of the Department 

of Military and Veterans Affairs (Department). The Department denied Regester’s 

bid protest, which challenged the award of a bid by the Department to another 

bidder, B&W, Inc., for heating, ventilation, and air conditioning services at Ft. 

Indiantown Gap. We affirm the Department’s order.

On or about August 21, 2015, the Department issued a request to 

advertise solicitation (invitation to bid (ITB)) for the provision of “[o]n-[c]all 

HVAC services to various buildings at Fort Indiantown Gap.” (Reproduced 

Record (R.R.) at 3a-116a.) Regester and B&W submitted the only responses. 

Following the submissions of bids, the Department awarded the contract to B&W. 
2

On or about September 11, 2015, Regester filed a bid protest, asserting that 

B&W’s bid was nonresponsive to the ITB based upon a requirement in the ITB 

that “[t]he contractor will be certified in Siemens LMV 53 boiler systems and will 

have minimum of (3) three years working experience with listed equipment.” 

(R.R. at 191a; emphasis added.) In responding to the award of the bid to B&W, 

Regester contended, B&W did not establish that it was certified with regard to the 

maintenance of Siemens LMV 53 boilers. Instead, Regester asserted, B&W was 

proposing to use a subcontractor, Mountainside Heating, which in turn, he claimed, 

intended to use Jeffrey and Jesse Howell (Mountainside Heating’s apparent 

owners) to perform such service. (R.R. at 187a.)

Regester complained that the ITB does not permit a successful bidder 

to satisfy the certification requirement by using a subcontractor. (R.R. at 187a.), In 

fact, Regester asserted, the ITB provides that “[t]he contractor will directly 

perform all work for the . . . On-Call HVAC service contract” and that 

“[s]ubcontracting will not be authorized.” (R.R. at 192a.) Regester asserted that

he has two Siemens LMV 53 boiler-certified employees. (R.R. at 188a.) 

Additionally, Regester recommended that the Department, in reviewing his claims, 

request that the Howells or that B&W submit payroll documents to confirm that 

the Howells are employees rather than subcontractors. In response to Regester’s 

protest, the Department’s Chief Procurement Officer sent a letter to Regester 

indicating that “the Adjutant General, or his designee” would review the protest 

and issue a written determination addressing the protest. (R.R. at 199a.)

In a September 30, 2015 determination, the Department’s Chief 

Procurement Officer issued a response to Regester’s bid protest. First, the Chief 

Procurement Officer rejected Regester’s claim that B&W’s bid was nonresponsive 
3

based upon the alleged lack of employee certification in the subject boiler system, 

stating that B&W demonstrated it had the capability to perform the contract 

requirements in accordance with Section 517 of the Commonwealth Procurement 

Code (Procurement Code).

1

 By way of explanation, the Chief Procurement Officer 

stated

As part of its due diligence in determining responsibility 

to award [the contract], [the Department] reviewed the 

submittals included with each bid. B&W included 

certificates reflecting certification on the Siemens LVM 

53 Boiler System in the names of Jeffrey L. Howell and 

Jesse J. Howell. This submission meets the requirements 

of the bid.

(R.R. at 202a-203a.) With regard to Regester’s complaint that the ITB prohibits 

the use of subcontractors, the Chief Procurement Officer concluded that Regester 

had made that claim without providing any evidence or information to substantiate 

the assertion. Additionally, the Chief Procurement Officer indicated that she saw 

no basis for providing a hearing, noting that she had the discretion to decide 

whether to conduct a hearing and that Regester did not “assert any material facts 

that are in dispute that would require a hearing and . . . does not identify any 

evidence that it must present in a hearing.” (R.R. at 203a.)

Regester disputed the Chief Procurement Officer’s conclusions. (R.R. 

at 208a-209a.) In response to Regester’s objections, B&W indicated that the 

Howells are employees. Regester then questioned whether B&W had hired the 

Howells before B&W submitted its bid. Regester also suggested that the Howells 

as owners of Mountainside Heating could not also be B&W’s employees.

 

1

62 Pa. C.S. §§ 101-1913.
4

On or about November 13, 2015, Dee McPherson, the Department’s 

Deputy Secretary, issued a final determination. In that determination, the Deputy 

Secretary acknowledged that the Howells were not employees of B&W at the time 

B&W submitted the bid, but were certified to perform the Siemens boiler system 

work and that they are now B&W employees. The Deputy Secretary concluded 

that it was not necessary for the Howells to be employees of B&W at the time of 

bid submission and that B&W had hired the Howells as employees following the 

award of the bid. Based upon that conclusion, the Deputy Secretary determined 

that B&W’s bid was responsive to the ITB and that the designation of the Howells 

in the bid did not violate the ITB’s prohibition against the use of subcontractors.

Regester petitioned for review with this Court,2raising the following 

issues: (1) whether the Department failed to abide by the terms of the ITB by 

accepting the bid of a company that had neither three years of working experience,

nor—on the bid submission date—individuals working for it who were certified to 

service the subject boiler system; and (2) whether the Department erred in refusing 

to hold a hearing, based upon Regester’s claim that evidence is conflicting.

The general thrust of Regester’s claim is that the Department did not 

award the contract to a “responsible bidder” under the Procurement Code. Section 

103 of the Procurement Code3defines the term “responsible bidder” as

 

2 As indicated by Section 1711.1(i) of the Procurement Code, 62 Pa. C.S. § 1711.1(i), our 

review is limited to a review of “the record of determination certified by the purchasing agency. 

The Court shall affirm the determination . . . unless it finds from the record that the 

determination is arbitrary and capricious, an abuse of discretion or is contrary to the law.” 

Section 1711.1(l) of the Procurement Code, 62 Pa. C.S. § 1711.1(l) provides that the “provisions 

of 2 Pa. C.S. (relating to administrative law and procedure) shall not apply to this section.” 

3

62 Pa. C.S. § 103.
5

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.

Section 103 of the Procurement Code also defines the term “responsive bid” as “[a] 

bid which conforms in all material respects to the requirements and criteria in the 

invitation for bids.” 

Regester contends that B&W was not a responsible bidder and that the 

Department failed to abide by the terms of the ITB by accepting a bid that did not 

comply with the ITB based upon: (1) B&W’s alleged lack of three years’ 

experience with the Siemens boiler systems for which maintenance service was 

sought; and (2) B&W’s lack of employees properly certified for the boiler system 

service at the time B&W submitted the bid. Regester contends that, even if the 

Department was correct in reasoning that B&W’s bid complied with the ITB by 

having certified employees on the payroll before B&W signed the contract with the 

Department, B&W did not demonstrate that the certified employees have three 

years of experience. Regester complains also that the designation of the Howells 

for the purpose of complying with the certification requirement violated the 

provision in the ITB prohibiting the use of subcontractors.

In response to these arguments, the Department first contends that 

Regester waived the argument that B&W does not have three years’ experience 

because he did not raise this argument before the Deputy Secretary before the 

Department’s final determination was issued. In considering whether a party has 

preserved or waived consideration of the three-years’ experience question, we note 

our comments in Arnold v. Workers’ Compensation Appeal Board (Lacour 

Painting, Inc.), 110 A.3d 1063 (Pa. Cmwlth. 2015):
6

We may not consider an issue on appeal unless it has

been preserved at every stage of a proceeding below. Pa. 

R.A.P. 1551(a); GMS Mine Repair & Maintenance, Inc. 

v. Workers’ Compensation Appeal Board (Way), 29 A.3d 

1193, 1197 (Pa. Cmwlth. 2011). However, the question 

here is not whether Claimant raised a completely new 

issue on appeal—there is no dispute that Claimant sought 

specific loss benefits before the WCJ and the Board—but 

rather whether Claimant’s specific loss claim has 

transformed into something fundamentally different on 

appeal. Our courts permit a litigant to make new 

arguments on appeal in support of a preserved issue, 

Wert v. Department of Transportation, Bureau of Driver 

Licensing, 821 A.2d 182, 186 n.9 (Pa. Cmwlth. 2003); 

Doe-spun, Inc. v. Morgan, 502 A.2d 287, 289 (Pa. 

Cmwlth. 1985), but do not permit a party to advance an 

entirely new and different theory of relief for the first 

time on appeal. Foster v. Mutual Fire, Marine and 

Inland Insurance Co., 676 A.2d 652, 658 (Pa. 1996); 

Fatzinger v. City of Allentown, 591 A.2d 369, 371 (Pa. 

Cmwlth. 1991).

Arnold, 110 A.3d at 1071 (emphasis in original). “[L]ogic dictates that an 

appellant can raise new arguments so long as they relate to the same issue.” 

Wert, 821 A.2d at 186 n.9. The primary question here appears to be whether B&W 

is not a responsive bidder based upon Regester’s claim that the bid proposal is not 

a responsive bid. One aspect of that claim relates to Regester’s initial assertion 

that B&W did not have certified employees at the time it submitted its bid. Later, 

in his appeal to this Court, Regester asserted that B&W is not a responsive bidder 

also because it allegedly does not have three years’ experience. Although these 

two alleged claims appear to relate to the general issue of bid responsiveness, the 

latter claim is also a new theory of relief, because Regester raised it for the first 

time on appeal and also because, as a consequence of Regester not identifying the 

potential claim earlier, the record does not appear to contain any factual 

information that would provide insight into the resolution of that claim.
7

In this matter, Regester, at the agency level, never sought to challenge 

B&W’s indication in its bid that it satisfied the three-year-experience requirement,

and the Department did not exercise its discretion to conduct an evidentiary 

hearing. The Deputy Secretary communicated with the parties for the purpose of 

addressing Regester’s primary complaint at the agency level—that B&W was 

required to have actual certified employees on its staff (rather than a subcontractor)

at the time it submitted its bid. Thus, at the time the Deputy Secretary was 

considering Regester’s challenge from the initial decision of the Chief 

Procurement Officer, she could also have engaged in an investigation regarding the 

requirement that the successful bidder have three years of experience, but did not 

do so apparently because of Regester’s failure to communicate that objection. 

Thus, Regester’s failure to assert the claim at that time divested the Deputy 

Secretary of the opportunity to request the parties to address that requirement and 

to consider whether facts might support Regester’s claim.

4

We also note the language of the Procurement Code relating to the 

content of bid protests:

(c) Content of protest.—A protest shall state all grounds 

upon which the protestant asserts that the solicitation or 

award of the contract was improper . . . .

62 Pa. C.S. § 1711.1(c). This language suggests that a disappointed bidder must 

provide to the contracting agency any and all grounds for challenging the award of 

a bid. In this case, the claim by Regester that B&W does not satisfy the 

 

4

The Department notes that B&W provided HVAC services under contract from June 

2005 through June 2010 and suggests that evidence of this experience would have been offered if 

Regester had raised this factual issue during the bid protest proceedings. (Department Brief 

at 9.)
8

three-years’ experience requirement constitutes a ground upon which Regester is 

claiming that the contract award was improper. Consequently, based upon waiver 

principles and the statutory language of the Procurement Code, we conclude that 

Regester failed to preserve the claim that B&W does not satisfy the three-years’ 

experience requirement in the ITB.

We proceed now to consider whether the Department erred in 

awarding the contract to B&W when it appears that B&W did not hire the Howells 

until after the Department awarded the contract to B&W. Section 1711.1 of the 

Commonwealth Procurement Code, 62 Pa. C.S. § 1711.1, provides, in pertinent 

part:

(a) Right to protest.—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.

. . . 

(e) Evaluation of protest.—The head of the purchasing 

agency or his designee shall review the protest and any 

response or reply and may request and review such 

additional documents or information he deems necessary 

to render a decision and may, at his sole discretion, 

conduct a hearing . . . .

. . . 

(h) Record of determination.—The record of 

determination for review by the court shall consist of the 

solicitation or award; the contract, if any; the protest; any 

response or reply; and additional documents or 

information considered by the head of the purchasing 

agency or his designee; the hearing transcript and 

exhibits, if any; and the final determination.

First, we note that the actual language of the ITB uses the future tense 

in referring to the service qualifications: “The contractor will be certified . . . .” 

The use of the future tense suggests that the drafter of ITB anticipated that a 
9

responsive bid and/or responsible bidder was not required to demonstrate 

satisfaction of the certification requirement at the time of bid submission. Rather, 

it is reasonable to interpret the language as requiring the selected contractor to have 

certified employees either at the time the contract was signed or by the time the 

service begins. Such an interpretation is reasonable in light of the pragmatic 

realities of contract bidding and awards, as it may not be reasonable to expect a 

contractor to commit to hiring new employees or obtain expensive new equipment 

when uncertainty exists regarding whether an agency will award a contract to a 

bidder.

Finally, with regard to Regester’s complaint that the Deputy Secretary 

did not conduct a hearing, we note that the decision to hold a hearing is one that 

rests in the sole discretion of the Deputy Secretary. Section 1711.1(e) of the 

Procurement Code, 62 Pa. C.S. §1711.1(e). Regester’s primary claim regarding 

the factual record relates to the timing of B&W’s hiring of the Howells. As we 

held above, however, we find no merit to the claim that B&W was required to have 

certified employees at the time of the bid. Consequently, we conclude that no 

hearing was necessary in order for the Deputy Secretary to issue a final 

determination.

Accordingly, we affirm the Department’s order rejecting Regester’s 

bid protest.

 

 P. KEVIN BROBSON, Judge
IN THE COMMONWEALTH COURT OF PENNSYLVANIA

Michael Regester, President Regester’s :

Heating and Air Conditioning, LLC, :

Petitioner :

:

v. : No. 2344 C.D. 2015

:

Department of Military :

and Veterans Affairs, :

Respondent :

O R D E R

AND NOW, this 31st day of October, 2016, the order of the 

Department of Military and Veterans Affairs is AFFIRMED.

 

 P. KEVIN BROBSON, Judge