Construction Alert: Public Entities Free to Do Their Own Investigations of Construction Bidders

by McCarter & English, LLP
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[author: Joseph E. Ruccio, III]

In Barr Inc. v. Holliston, issued May 3, 2012, the Massachusetts Supreme Judicial Court (SJC) gave its stamp of approval to the independent reference checks that public project owners have been conducting, and the Massachusetts Attorney General's Office has been condoning, for quite some time.1

The Department of Capital Asset Management (DCAM) certifies bidders for public construction contracts where the work is estimated to exceed $100,000 and involves a building. Chapter 149 of Mass. General Laws requires the municipal or state agencies awarding these contracts to review the lowest bidder's DCAM file and its self-completed update statement when determining whether the bidder is responsible.

Barr argued that an awarding authority's responsibility review must be limited to these materials after the town of Holliston rejected it for a police station project based on calls to owners of past projects prompted by information the town found on the Internet and in Barr's DCAM file.

Consistent with a decision issued by the United States Court of Appeals for the First Circuit, the SJC rejected this Barr argument (which could be seen as an effort to lower the bar, if one liked bad puns, that is). The SJC reasoned that nothing in c. 149, which states that the awarding authority is the one who determines a bidder's responsibility, expressly prohibits the authority from conducting an independent investigation into the past performance of contractors.

The SJC also noted that such investigations could identify relevant information regarding private projects that might not appear in a DCAM file given that only public owners are legally required to submit contractor evaluation forms to DCAM. Barr argued that allowing more than review of the DCAM file and update statement interjects favoritism into the bidding process, and in support of this argument, cited the fact that it was subject to a more extensive investigation than the next lowest bidder, who was awarded the police station project.

The SJC determined that any risk of awarding authorities searching for flaws in disfavored contractors and performing cursory reviews on favored contractors is adequately addressed by the likelihood that rejection of a low bidder will be scrutinized in a bid protest filed in court or at the AG's Office, or when the awarding authority reports such a rejection to DCAM, as it must do under statute.

McCarter & English's Construction Group has the public and private industry knowledge and legal experience to help you navigate the statutory, regulatory or other legal issues involved in your construction project. For more information on the Construction Group, please click here.

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1 Joseph "Jed" Ruccio, the author of this article, is a former head of the Massachusetts Attorney General's Bid Protest Unit.


 

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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