Barr Inc. v. Town of Holliston

• Citation: 462 Mass. 112,967 N.E.2d 106
• Decision Date: 03 May 2012
• Docket Number: SJC–10899.
• Parties: BARR INCORPORATED v. TOWN OF HOLLISTON.
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

462 Mass. 112

967 N.E.2d 106

BARR INCORPORATED

v.TOWN OF HOLLISTON.

SJC–10899.

Supreme Judicial Court of Massachusetts, Middlesex.

Submitted Jan. 4, 2012.

Decided May 3, 2012.

Michael P. Sams, Boston, for the plaintiff.

David J. Doneski, Boston, for the defendant.

James L. Rudolph & Robert E. Curtis, Jr., for Associated Builders and Contractors, Inc., amicus curiae, submitted a brief.

Martha Coakley, Attorney General, & Karla E. Zarbo, Assistant Attorney General,for the Attorney General & another, amici curiae, submitted a brief.

Present: IRELAND, C.J., SPINA, CORDY, BOTSFORD, GANTS, DUFFLY, & LENK, JJ.

LENK, J.

Contracts for the construction of public buildings estimated to cost above $100,000 “shall be awarded to the lowest responsible and eligible general bidder.” G.L. c. 149, § 44A (2)(D). The question before us is whether, when an awarding authority is making a determination as to bidder responsibility,it is constrained to look only at materials compiled as part of the Department of Capital Asset Management's (DCAM's) contractor certification process. See G.L. c. 149, § 44D. We conclude that the competitive bidding statute places no such restriction on awarding authorities. ¹

1. Background. We recite briefly the background facts, which are not contested in any relevant respect. In February, 2008, the town of Holliston (town) solicited bids for the construction of a new police station. The plaintiff, Barr Incorporated (Barr), submitted the lowest bid. The town, however, subsequently determined that the plaintiff was not a “responsible and eligible general bidder,” G.L. c. 149, § 44A (2)(D), and that the contract should instead be awarded to the next-lowest bidder, Statewide Engineering & Construction Co., Inc. (Statewide).²

In determining that Barr was not a responsible bidder,³ the town first looked to information in DCAM's certification file on Barr,⁴ and also conducted an Internet search. Finding that these materials raised cause for concern as to Barr's performance on past projects, the town administrator asked Charles Todd, a detective in the town's police department, to conduct a more thorough investigation into Barr's projects.

Todd proceeded by contacting eight municipalities that had previously retained the plaintiff as a contractor. He determined that six of them had an “overall negative” impression of Barr's work. Compiling Todd's report with information in DCAM's file, the town administrator concluded that, of the eighteen public projects awarded to Barr on which the town had information, seven had resulted in “negative experiences” for the project client. This conclusion was reported to the town committee charged with overseeing the project; in April, 2008, that committee voted to find that Barr was not a responsible bidder for purposes of G.L. c. 149, § 44D.

The day before the town was to award the project, Barr filed a complaint in Superior Court against the town, seeking injunctive and declaratory relief. In its complaint, Barr alleged generally that the town's investigation fell “outside the scope of what it was permitted to do pursuant to” State law. Barr alleged also that the town “acted arbitrarily and capriciously” in determining that Barr was not a responsible bidder.

Barr subsequently moved for summary judgment on its claim for declaratory relief. In denying Barr's motion, the judge noted that his decision turned solely on the narrow, and potentially dispositive, legal issue whether, in determining that Barr was not a responsible bidder, the town was constrained to consider only DCAM's file on Barr and a statutorily mandated “update statement” to that file. See G.L. c. 149, § 44D (1) ( a ). Because the judge concluded that the statute did not constrain the town in this manner, he determined that Barr was not entitled to summary judgment in its favor. The judge specifically declined to address “whether [the town's] investigation was fair and thorough,” or the ultimate issue “whether [the town's] refusal to honor Barr's low bid was arbitrary.” He then allowed the parties' joint motion, pursuant to Mass. R. Civ. P. 64(a), as amended, 423 Mass. 1403 (1996), that the case be reported to the Appeals Court. We transferred the case on our own motion.

2. Discussion. A report by a judge in the Superior Court brings before us only the propriety of the ruling or order reported. G.L. c. 231, § 111. See Barnes v. Metropolitan Hous. Assistance Program, 425 Mass. 79, 84, 679 N.E.2d 545 (1997). In this case, the order at issue resolved a pure question of law: whether G.L. c. 149, § 44D, prevents an “awarding authority” ⁵ from conducting any independent investigation into bidder responsibility. We therefore accord “no deference to the judge's decision.” Sylvester v. Commissioner of Revenue, 445 Mass. 304, 308, 837 N.E.2d 662 (2005). Nevertheless, we conclude, as did the judge, that an awarding authority may consider information bearing on a bidder's responsibility—or lack thereof—outside that contained in DCAM's records on the bidder.⁶

Spurred by concerns “in the press and elsewhere about corruption in the award and supervision of [public] construction contracts,” Ward v. Peabody, 380 Mass. 805, 806, 405 N.E.2d 973 (1980), in 1980 the Legislature enacted a wholesale reform of the Commonwealth's public bidding statutes, St.1980, c. 579, § 55, now codified at G.L. c. 149, §§ 44A, 44B–44D, 44E, 44F–44H (1980 statute). Even prior to the 1980 statute, with certain exceptions, contracts for the construction of public buildings were required to “be awarded to the lowest responsible and eligible bidder.” Fordyce v. Hanover, 457 Mass. 248, 259 & n. 13, 929 N.E.2d 929 (2010), comparing G.L. c. 149, § 44A, as amended through St.1977, c. 968, with G.L. c. 149, § 44A, as appearing in St.1980, c. 579, § 55. The 1980 statute retained this requirement, but provided additional guidance on the meaning of “[r]esponsible” and “[e]ligible.” G.L. c. 149, § 44A (1). See Fordyce v. Hanover, supra at 259–260, 929 N.E.2d 929.

To be “[r]esponsible” as defined in G.L. c. 149, § 44A, a bidder must “demonstrably possess[ ] the skill, ability and integrity necessary to faithfully perform the work called for by a particular contract, based upon a determination of competent workmanship and financial soundness in accordance with the provisions of [G.L. c. 149, § 44D].” ⁷ That section, in turn, requires that bidders obtain a certificate of eligibility from DCAM, which it grants based on assessments of the bidder's performance on past and current projects. G.L. c. 149, § 44D (1) ( a ). Although the department will review assessments submitted by a contractor's prior private clients, see 810 Code Mass. Regs. § 4.06 (2005), private firms, unlike public entities, are under no obligationto report a contractor's performance to DCAM. See G.L. c. 149, § 44D (16). General Laws c. 149, § 44D (1) ( a ), requires also that bidders submit “update statement[s]” with their bids; these are self-prepared documents listing the public projects that bidders have completed since obtaining their certificate of eligibility. See 810 Code Mass. Regs. §§ 4.01, 4.04(6), 8.06 (2005).

We have described at length the threefold function of these statutory requirements. See generally Brasi Dev. Corp. v. Attorney Gen., 456 Mass. 684, 689–691, 925 N.E.2d 826 (2010), and cases cited. First, they assure a minimum level of contractor competence, one safeguarded by DCAM through its certification process. Id. at 690, 925 N.E.2d 826. Second, they establish DCAM as a clearinghouse of information between and “among individual awarding authorities.” 8 Final Report to the General Court of the Special Commission Concerning State and County Buildings 351 (Dec. 31, 1980) (Ward Commission Report). Third, they provide awarding authorities with “guidelines issued by an expert authority”—that is, DCAM—on how to determine whether a bidder can successfully complete a construction contract in a timely manner. See Fordyce v. Hanover, supra at 260, 929 N.E.2d 929. Prior to these reforms, many awarding authorities would deem almost all bidders responsible and eligible, “regardless of their competency or experience, and the selection of a contractor was based solely on price.” Id. After enactment of the 1980 statute, however, awarding authorities were able to avail themselves “of an effective system for screening out those contractors who are unqualified.” 8 Ward Commission Report, supra at 343.

Yet, even under the 1980 statute, the entity responsible for making a final determination of bidder responsibility remains the awarding authority, not DCAM. This principle was well established under the public bidding statute that existed prior to 1980. See Capuano, Inc. v. School Bldg. Comm. of Wilbraham, 330 Mass. 494, 495–496, 115 N.E.2d 491 (1953). And, under G.L. c. 149, § 44D (6), it remains the awarding authority that must “determin[e] who is the lowest responsible and eligible bidder.” Were this language not plain enough, the legislative history of the 1980 statute discloses that “the assumption” behind the legislation was that “awarding authorities will normally be in the best position to evaluate the qualifications of those desiring to bid on its projects.” 8 Ward Commission Report, supra at 348.

Certainly, an awarding authority's discretion in determining whether a bidder is responsible and eligible is not unconstrained. The awarding authority may only contract with a bidder certified by DCAM. See G.L. c. 149, § 44D. Even in selecting among certified bidders, G.L. c. 149, § 44D (6), requires that awarding authorities “shall consider the information submitted by the bidder in the update statement.” DCAM regulations require further that awarding authorities “must review the [c]ontractor's certification file from DCAM.” 810 Code Mass. Regs. § 8.04(2) (2005).

However, nothing in either the statute or DCAM's regulations expressly precludes the awarding authority from...