Strang Scott partner, Chris Strang, co-authored and article with Brendan Carter from the Associated General Contractors of Massachusetts that was published recently on the cover of the American Bar Association’s “Under Construction” quarterly newsletter. The article details a case where Strang Scott prevailed against the Commonwealth of Massachusetts, successfully arguing that the awarding authority has a duty to ensure the validity of payment bonds provided by general contractors on public construction projects in Massachusetts. The case was a matter of first impression in Massachusetts courts.
The Massachusetts Attorney General Bid Unit recently held that an awarding authority should not re-bid a project where the original bid documents were confusing as to the address for submitting bids.
The Town of Weston solicited bids for an exterior duct work construction project. The Invitation to Bid listed one address, and the Instructions to Bidders listed a different address. In response to questions received on “addresses and dates” Weston issued Addendum 1, listing a third different address. Confusing things even more, it turns out that this third address in the Addendum was also a mistake. Two bidders submitted bids at the address listed in Addendum 1, while four others submitted bids at the address listed in the Instructions to Bidders.
The Attorney General decided that Addendum 1 overrode contrary bid documents, regardless of it actually being a mistake. The decision deemed the low bidder at the address listed in Addendum 1 as entitled to the contract, and ruled that the project should not be re-bid.
Bidders should use caution in reviewing addendums thoroughly and follow instructions accordingly. A full copy of the decision can be found here: In Re: Town of Weston: Exterior Duct Repair, September 11, 2015, http://www.bpd.ago.state.ma.us/.
Those who perform public work in Massachusetts know the phrase “lowest, responsible and eligible” bidder well, as it applies to the standard for awarding subcontracts on public construction projects subject to the bid statutes. However, as many subcontractors have experienced, some of the bid requirements to be considered an “eligible” bidder are in fact waivable by the awarding authority.
The nuances of public bidding are that some bid requirements, even those that are statutory, are waivable by the awarding authority. For instance, the bidding statute requires that a sub-bidder must include its certificate of eligibility and update statement with its bid to establish prequalification. However, the Attorney General (“AG”) has held that a bidder can actually submit its certificate of eligibility after the opening of the bids. Yet, failure to submit the update statement at the time of bid opening necessitates automatic rejection of the bid. Why this discrepancy? In evaluating whether an awarding authority has the discretion to accept a bid that fails to include a certificate of eligibility at the time of bid opening, the AG reasoned that awarding authority can verify contemporaneously whether a bidder is DCAM certified. Therefore, there is no harm in allowing a bidder to submit its certificate a few hours later. Conversely, allowing a bidder to furnish its update statement after bid opening would result in an unfair advantage because the update statement, unlike DCAM certification, cannot be independently and instantaneously verified. Allowing a bidder to submit a document that is entirely within the bidder’s control, like the update statement, could result in “two bites of the apple,” as the saying goes, because the bidder could decide after bid opening whether to submit the document based on whether the bidder still wants the job.
So how does one determine which deviations from the bid requirements would be minor enough to warrant an awarding authority to use its discretion to accept an otherwise non-complying bid? It all comes down to whether or not a bidder would have an unfair advantage which would undermine the purpose of the competitive bidding statute to obtain the lowest price for work that competition among responsible bidders can secure. For instance, as explained above a certificate of eligibility submitted late is not unfair as there is no upper hand gained by a certificate-less bidder. Conversely, a bidder is not allowed to submit bid security a few hours late. The AG explained allowing a bid bond to be submitted even a few hours late could upset the balance of fair bidding as some bidders could abuse such leniency by submitting a low bid without a bid bond and then have second thoughts after the opening and nullify their bid by never filing a bond. Below is a brief summary of bid requirements that the AG has determined require rejection by the awarding authority, and those for which the awarding authority may use its discretion in determining whether to reject. It’s important to recognize that an awarding authority is not compelled to overlook “waivable” bid requirements.
Bid Requirements which the AG has held may be waived by the awarding authority, in its discretion:
1. Minor clerical errors.
–Such clerical errors much be minor enough that they are obvious and deceive no one.
2. Failure to submit non-statutory items where bid documents do not make submission mandatory.
–These include items which do not go to the scope of work or price of the work.
3. Noncompliance with discretionary minority requirement.
4. Failure to acknowledge addenda which do not go to price and scope.
–Such addenda must be small or insignificant as to be a minor deviation.
5. Update statement with an omission.
–Massachusetts Courts have held that even if a contractor makes an intentional misrepresentation on the update statement, the awarding authority still has the discretion to terminate, but is not required to terminate the contract.
6. Submitting certificate of eligibility after bid opening.
There are certain deviations from the bid requirements that mandate bid rejection by the awarding authority:
1. No bid bond.
2. No signature on bid.
3. Failure to submit update statement.
4. Failure to timely submit bid.
5. Bids that are incomplete, obscure, or contain conditions.
–For example, failure to bid on materials specified in bid documents; failure to acknowledge addenda which affect price and scope of work; or not bidding on the amount of material specified. Another pitfall would be a bidder who put conditions on the bid price or does not comply with specifications but tries to change them.
Of course, the statute also provides modes of protesting the award of a contract. A bidder can chose to go to either Superior Court, or to the Attorney General’s office to protest a bid award. Because these issues are often very fact specific, bidders that may have been aggrieved by the awarding authority or other parties in the bid process should consult their construction attorney to determine whether there are grounds for a bid protest, and to provide the bidder with guidance on the bid protest process.