Tag Archives: Massachusetts public construction

Massachusetts Awarding Authorities Must Allow Sub-bidders to Respond to Negative Reviews

By 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.

Strang Scott Prevails In Arguing that Public Awarding Authorities Have a Duty to Verify Validity of Payment Bonds

By on January 21, 2016

A Superior Court judge recently ruled in Kapiloff’s Glass, Inc. et.al. v. University of Massachusetts (UMASS), et.al., MICV2014-08766, that Massachusetts awarding authorities on public construction projects do, in fact, have a duty to confirm that the payment bonds submitted by general contractors are valid.

Strang Scott brought suit on behalf of four subcontractors who provided labor and materials on the University of Massachusetts at Lowell Dry Lab Renovations construction project. The general contractor failed to pay the subcontractors in full, so the subcontractors requested copies of the payment bond from the awarding authority. Soon after filing suit, the subcontractors learned that the general contractor was filing for bankruptcy, and that the payment bond was fake.

As discussed in a previous article, Strang Scott, in a case of first impression, argued that awarding authorities on public construction projects have statutory obligations under M.G.L. c. 149, s. 29 to verify that the payment bonds provided to them by general contractors are legitimately issued by sureties registered with the Massachusetts Division of Insurance. The University of Massachusetts argued that it was not an officer or agent of the Commonwealth within the meaning of the statute. The court ruled that this defense was “neither logical nor in accord with common sense.

The court decision explained in great detail the remedial nature of the statute, and how its express purpose is to protect subcontractors, and not the Commonwealth. It cited many prior court decisions opining that the statute should be construed liberally to accomplish its intended purpose of getting subcontractors and material suppliers paid for their work.

Whether courts will find additional duties for awarding authorities on public construction projects in the future is uncertain, nor do we know whether the University of Massachusetts will appeal this decision. However, at least for now, this decision provides some comfort for subcontractors and material suppliers that some form of payment security should exist when they perform public work.

How to Know if Proprietary Bidding is Proper: A Public Construction Conundrum

By on December 14, 2015

Public construction projects are as necessary as they are numerous, which is to say very. Given that taxpayer money is at stake on these projects the state has an interest in regulating them from inception to completion to ensure that funds are spent efficiently. One specific statutory protection that Massachusetts provides at the inception of public construction projects is the competitive bidding requirement encompassed in MA G.L. c. 30, § 39M (b) (“Competitive Bidding Statute”).

The Competitive Bidding Statute serves to ensure that there is sufficient market competition for bids on public projects such that prices are kept low while the quality standards of the work remain high.  The statute accomplishes this by requiring that public bids,  “be written to provide for full competition for each item of material to be furnished under the contract; except, however, that said specifications may be otherwise written for sound reasons in the public interest.” It is important that contractors and subcontractors understand the implications of this statutory language so they are able to make fully informed and accurate bids.

The statute allows for two types of bids: competitive or proprietary. Competitive bidding is the norm and proprietary is the very narrow exception. The requirements of a competitive bid are that, “[f]or each item of material the specifications shall provide for either a minimum of three named brands of material or a description of material which can be met by a minimum of three manufacturers or producers.

Proprietary bids, or bids that do not meet the competitive bid standard, are allowed only if there are, “sound reasons in the public interest,” and only if those sound reasons are, “stated in writing in the public records of the awarding authority or promptly given in writing by the awarding authority to anyone making a written request therefor, in either instance such writing to be prepared after reasonable investigation.

In the case of both competitive and proprietary bidding, the awarding authority must allow contractors to submit alternative sources for materials that are the functional equivalents to materials described in the bidding document specifications. These are called equals. Specifically, “an item shall be considered equal to the item so named or described if, in the opinion of the awarding authority: (1) it is at least equal in quality, durability, appearance, strength and design, (2) it will perform at least equally the function imposed by the general design for the public work being contracted for or the material being purchased, and (3) it conforms substantially, even with deviations, to the detailed requirements for the item in the said specifications.”

The principal case on the matter of proper competitive bidding is  E. Amanti & Sons, Inc. v R.C. Griffin, Inc. (2001). This case illustrates the importance of correct bidding practices by highlighting the financial consequences for violation of the Competitive Bidding Statute.  In this case, the Massachusetts court made it clear that the distinction between proprietary and competitive bidding is meaningful and that subcontractors should not bear the burden of competitive bidding violations.

In this case, a subcontractor sought, and won reimbursement for, costs incurred when the subcontractor was forced to use a different and more expensive item than it included in its accepted bid. The specifications for the job required that the exhaust system be “as specified and manufactured by PlymoVent, or approved equal by the Fire Department.”  The subcontractor’s accepted bid contained a different and less expensive exhaust system manufactured by a company other than PlymoVent.

While the “or approved equal” language gave the appearance of a competitive bid and led the subcontractor to believe that other exhaust systems could satisfy the specifications, in reality only the PlymoVent system could meet the architects requirements. The bidding authority did not make this fact clear to the subcontractor up front. Thus, the court held that form lost to substance, and the addition of the words “or equal” did not suffice for a competitive bid. The court determined that the awarding authority attempted to circumvent the statutory requirements for a proprietary bid by attaching the “or equal” language giving the false impression that competition was welcome. Ultimately, the court held that awarding authority had to bear the burden of the extra cost incurred by the subcontractor in reliance on the improperly proprietary bid.

Thus, it is imperative that contractors and subcontractors on public construction projects are aware of the Competitive Bidding Statute and its implications. Competitive bidding is the default unless the awarding authority explicitly indicates otherwise. Case law suggests the burden for improper proprietary bids should fall on the awarding authority. Nothing is certain, however, thus vigilance is key for contractors and subcontractors when it comes to bidding on public projects and that vigilance is bolstered by awareness of whether bidding documents are soliciting competitive or proprietary bids.  If you have any questions about bidding on public construction contracts, you should contact a Massachusetts construction lawyer.   

By Andrea Jacobs, Esq