A finding of bad faith against a government agency for failure to promptly pay contractors does not require a court to award a statutory penalty and attorney fees, the state Supreme Court has ruled.
In a split decision in A. Scott Enterprises v. City of Allentown issued July 19, the high court ruled that the state’s Procurement Code allows trial courts to award a statutory penalty and attorney fees upon a finding of bad faith, but does not make the additional payments mandatory. The decision reversed a ruling from the Commonwealth Court, which had said that a bad-faith finding should mandate the payments because the code is intended to “level the playing field” between government agencies and contractors.
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