on January 9, 2018
The Massachusetts Attorney General’s Bid Protest Unit (“AG”) recently decided that when an awarding authority seeks references not listed by the sub-bidder, it must give the sub-bidder the opportunity to respond when such reviews are negative.
In the case, the Barre Housing Authority (“BHA”) sought public bids for a panel replacement project. BHA checked the references for the low sub-bidder, but also reached out to an unlisted public entity for which the sub-bidder had previously performed work. That public entity gave the sub-bidder a negative review, which caused BHA to reject the low sub-bidder’s bid.
The sub-bidder filed a bid protest. Pursuant to Massachusetts public bidding laws the AG’s office conducted an investigation and held a hearing. The AG decided that while BHA reaching out to references not listed by the sub-bidder was not improper, by doing so they implicitly created an obligation to offer the sub-bidder a chance to rebut the negative reference.
The AG ordered BHA to reconsider its decision to reject the low sub-bidder, in light of the ruling. Should you have questions concerning your rights as a bidder, you’d be well-advised to consult with an experienced construction attorney versed in public bidding protests.
on June 27, 2016
In a recent bid protest decision the Massachusetts Attorney General allowed a protest contesting a bidder’s right to submit Minority Business Enterprise (“MBE”) or Women’s Business Enterprise (“WBE”) qualifications after the bid opening. The opinion deemed MBE and WBE goals to be statutory and therefore not waivable by the awarding authority. The decision also found that allowing such post-bid submissions would violate the equal-footing principles upon which bidding laws rely.
The Fall River project required M/WBE compliance forms to be included with bids. The low bidder listed itself as an MBE in its bid. However, it soon learned that a change in the law made it no longer qualified to be a certified MBE. It then provided the city with the name of a qualifying subcontractor, albeit post bid opening. The city was willing to accept this post-bid supplement, however, another bidder filed a protest.
Generally speaking, cities may use their discretion in waiving their own public bidding requirements in certain circumstances. However, they are not authorized to waive statutory requirements. M.G.L. c. 7C, § 6(a)(6), enacted in 2013, provides that “state assisted construction contracts shall include language… setting forth the participation goals of minority and women workers to be employed on each such contracts.” Given the mandate of the “shall” language, the AG hearing officer found the M/WBE participation requirements to be statutory and therefore the city could not waive them.
The decision went further in finding that accepting the supplement post-bid would violate equal footing principles. An entity that already has the low bid will tend to have more leverage in negotiating prices with subcontractors and suppliers than competitors had pre-bid. Such advantages are not allowed.
Bidders should use caution going forward in verifying the current status of the M/WBE components of their bids and including thoroughly completed participation compliance forms in bid submissions.
on December 3, 2015
In a case of first impression, the court in Kapiloff’s Glass, Inc. et.al. v. University of Massachusetts (UMASS), et.al., MICV2014-08766 will consider whether the public awarding authority has a duty under M.G.L. c. 149, §29 to ensure that the payment bond provided by the general contractor on public construction projects is valid.
On the University of Massachusetts at Lowell Dry Lab Renovations construction project, several subcontractors brought claims on the general contractor’s payment bond, for nonpayment by the general contractor. The subcontractors obtained favorable judgments, but the payment bond surety failed to pay. The payment bond proved to be fake, and the surety was not registered to do business with the Massachusetts Division of Insurance.
Strang Scott brought claims against the University of Massachusetts on behalf of four of the subcontractors for the awarding authority’s failure to ensure that the payment bond provided at the time of bid was valid. The University of Massachusetts filed a motion to dismiss, arguing that it had no duty to ensure the authenticity of either the payment bond itself, or the surety issuing it. Strang Scott opposed the motion, arguing that the statute imposes such a duty, without which security on public projects would not exist for the subcontractors that rely upon the payment bonds.
In November, the Middlesex Superior Court heard oral arguments on the dispute, and a decision is expected in the near future. The impact of that decision will be far reaching, as it will ultimately determine whether subcontractors submitting bids on public construction projects in Massachusetts can rely upon the legitimacy of the general contractor’s payment bond.