Massachusetts Public Bidding Laws: What Contractors Need to Know Before & After They Bid

By:

Julianne Fitzpatrick

Massachusetts statutory laws govern the process for bidding on a public construction project, commonly referred to as the “Bid Laws” or “public bidding laws”.  These laws were enacted to make the public bidding process objective by requiring awarding public jobs to the lowest eligible bidder.  The purpose is to have public projects completed at the lowest cost that fair competition can achieve, to protect contractors and the public from favoritism, by protecting the integrity of and promoting transparency in the bidding process.  See Interstate Engineering Corp. v. City of Fitchburg, 367 Mass. 751 (1975); Dep’t of Labor & Indus. v. Boston Water & Sewer Comm’n, 18 Mass. App. Ct. 621 (1984); Paul Sardella Constr. Co., Inc. v. Braintree Hous. Auth., 3 Mass. App. Ct. 326, 333 (1975).

Here are some basics to remember and traps to avoid when bidding on a public job (and what to consider if your bid is denied):

  1. Statutory law requires that public projects be awarded to “the lowest responsible and eligible bidder.”

The Massachusetts public bidding laws cover horizontal and vertical construction projects of varying costs.  The contract must be awarded to the “lowest responsible and eligible bidder” for the following types of public construction projects:

  • “Horizontal Construction”: Public works projects and purchasing materials estimated to cost more than $10,000. See Gen. Laws c. 30, § 39M.
  • “Vertical Construction”: Public building projects, including repair, remodeling, reconstruction, or construction, estimated to cost more than $50,000. See Gen. Laws c. 149, § 44A(2)(B)-(D) (except for pumping stations that are an integral part of a sewer or water construction project under c. 30, § 39M).

The term “responsible” means “possessing the skill, ability and integrity” necessary to perform the work called for by the contract.  The term “eligible” means a bidder “who shall certify that he is able to furnish labor that can work in harmony with all other elements of labor employed or to be employed on the work.”  Mass. Gen. Laws c. 30, § 39M(c), c. 149, § 44A(1). [1]

  1. Unfortunately, Awarding Authorities Are Not Always Fair.

If you submitted the lowest bid and were awarded a contract, congratulations!  But what happens if you were not?

Despite the objectivity that the Massachusetts public bidding laws sought to lend to the bidding process, public entities’ lack of experience and bias still abound.  An awarding authority can look at information outside of your proposal (and DCAM certificate) to determine that you are “not responsible,” turning what is supposed to be an objective process into a subjective process.  See Barr Inc. v. Town of Holliston, 462 Mass. 112, 113 (2012).  The risk is that where “awarding authorities are permitted to investigate the background of contractors independently, they will perform only cursory reviews of preferred bidders while searching for flaws in disfavored firms.”  Id. at 117-118.

Indeed, we have seen rejections for all sorts of head-scratching, illegal reasons including the following:

  • Beginning the review process with the objective of rejecting the low bidder;
  • Rejecting a bidder because of its reputation for too many change orders;
  • Not performing a comparable review of the low and second low bidders;
  • Using evaluations that are far too old, while ignoring more recent evaluations;
  • Not reporting good references; and
  • Inexplicably splitting contracts and reserving the right to award the second phase of a contract to the second low bidder, even if the low bidder was responsible.
  1. How, When, and Where to File a Bid Protest

There are two potential routes for pursuing your bid protest: (1) filing it with the Bid Unit of the Attorney General’s Office (“AG”); or (2) filing a civil action in Superior Court.  You do this via agreement with the awarding authority or by going to court to seek an injunction, preventing the contract award for the time being.

Practically speaking, the purpose of submitting a bid protest to the AG is to get an informal opinion, which often is quicker and cheaper than filing a civil lawsuit and going to court.  You need the awarding authority’s agreement to refrain from contacting the second low bidder to pursue this process though.  If you don’t have that agreement, the contract might be executed with the second low bidder before the AG hears and decides things.  You should know, however, that even when the awarding authority agrees to proceed to an AG hearing, the AG’s decision  is not binding on the parties and does not have the same force and effect as a court-issued decision.  Also, the AG cannot award you monetary damages like a court can.

There are other considerations in whether to seek court intervention or a decision with the AG.  In the courts, while you may be before an informed judge, some have less experience with public bid laws and my fear delay or interruption of the public contract.  Selecting the AG hearing, however, may not present a level playing field.  The AG’s office is well experienced but may have pre-judged the dispute.  Specifically, the awarding authority already may have been in contact with the AG’s office on the very issue in dispute and obtained AG approval of the conduct in advance.  If the AG already has given favorable direction to the awarding authority, even on only partial or inaccurate information, it likely will be difficult to get the AG to switch sides at the hearing.

Regardless of whether you seek an AG opinion or court intervention, you need to prevent the awarding authority from executing the contract with the next low bidder because once the contract is executed with the other bidder, your damages generally are limited to recovery of your bid costs unless you can show bad faith or illegality.

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[1] Public works and building projects estimated to cost less than $10,000 are subject to different requirements.  See Mass. Gen. Laws. c. 149, § 44A (2) (A); see also Mass. Gen. Laws. c. 30B.

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