Petricca Const. Co. v. Com.

• Decision Date: 05 October 1994
• Docket Number: No. 93-P-75,93-P-75
• Citation: 640 N.E.2d 780,37 Mass.App.Ct. 392
• Parties: PETRICCA CONSTRUCTION COMPANY v. COMMONWEALTH.
• Court: Appeals Court of Massachusetts

Page 780

640 N.E.2d 780

37 Mass.App.Ct. 392

PETRICCA CONSTRUCTION COMPANY v.COMMONWEALTH.

No. 93-P-75.

Appeals Court of Massachusetts Suffolk.

Argued Feb. 14, 1994.

Decided Oct. 5, 1994.

John J. Spignesi, Woburn, for plaintiff.

Christopher W. Morog, Asst. Atty. Gen., for Com.

Charles E. Schaub, Jr., & Christopher J. Petrini, Boston, for Utility Contractors Ass'n of New England, amicus curiae, submitted a brief.

John D. O'Reilly, III, Southboro, for Const. Industries of Mass., Inc., amicus curiae, submitted a brief.

Before BROWN, PERRETTA and GREENBERG, JJ.

GREENBERG, Justice.

In Modern Continental Constr. Co. v. Lowell, 391 Mass. 829, 840, 465 N.E.2d 1173(1984), the court, examining G.L. c. 30 § 39M, ¹andG.L. c. 149, §§ 44A-44H, stated that "the purpose of competitive bidding statutes is not only to ensure that the awarding authority obtain the lowest price among responsible contractors, but also to establish an open and honest procedure for competition for public contracts."The question now presented is whether there is found in § 39M a power of awarding authorities to recapture the benefit of a lower bid that was properly rejected for noncompliance with the bidding procedures.We conclude that § 39M does not contain such a prerogative and that the Commonwealth, acting through the board of commissioners of its Highway Department(department), was mistaken when it decided to rebid a "public works" contract.²

1.Prior proceedings.We digress to explain the procedural posture under which we have considered the appeal.At the bid opening on February 19, 1992, Gagliarducci Construction Corp. was the apparent low bidder and the plaintiff, Petricca Construction Company, the third lowest among the five bids submitted.Because of an error in arithmetic in the Gagliarducci bid, and a potential "pricing" problem with the bid of E.T. & L. Construction Corp., the second lowest bidder, the department rejected all bids and decided to readvertise the contract.A protest was filed by E.T. & L. Construction with the Department of Labor and Industries(DOLI), on May 12, 1992.Under G.L. c. 149, § 44H, the commissioner of DOLI is empowered by the Legislature to "enforce" the competitive bidding laws.Concerning this power we stated in Doric Bldg. Assocs. v. Department of Labor & Indus., 27 Mass.App.Ct. 1175, 1177, 540 N.E.2d 1348(1989), that DOLI "has general authority to see that the bidding system of c. 149 is carried out faithfully."We also noted that DOLI has no enforcement power when it finds a violation, but may commence an action in the Superior Court when it spots an error.

Following an investigation DOLI agreed with the department that the bid of Gagliarducci had a computational error which caused it to become the second lowest bidder.DOLI found substantive defects in E.T. & L.'s bid, as well.As the department acknowledged that Petricca's bid was in order, it became the lowest, eligible bid.However, on account of purported concerns over potential delay of the project and the threat of litigation by all bidders, the department chose instead, to readvertise, rather than following the DOLI's administrative decision awarding the contract to Petricca.

This action was commenced on June 5, 1992, by Petricca, as an application for preliminary injunction to require the department to comply with DOLI's decision.After hearing on June 16, 1992, a judge of the Superior Court enjoined the department from rebidding or awarding the contract to any party other than Petricca.On a petition of the department to this court seeking relief under G.L. c. 231, § 118, first par., a single justice ordered that the injunction be dissolved and this appeal ensued.The rebidding process, meanwhile, continued apace.On August 4, 1992, the department awarded the contract to Gagliarducci, and construction began on September 28, 1992.

2.Mootness and standard of review.Ordinarily, we review the single justice's order "in the same manner as if it were an identical order by the trial judge considering the matter in the first instance."Jet-Line Servs., Inc. v. Selectmen of Stoughton, 25 Mass.App.Ct. 645, 646, 521 N.E.2d 1035(1988).Thus we ask whether the single justice abused his discretion by entering an order without having a supportable basis for doing so.SeeCarabetta Enterprises, Inc. v. Schena, 25 Mass.App.Ct. 389, 392, 518 N.E.2d 1163(1988).Here, the public construction has been started and the aggrieved party failed to move for an expedited appeal.The threshold question posed by the department is whether the matter is moot.

Even though the requested injunctive relief is now academic, Petricca does have a continuing interest in pursuing a judgment against the department for bid preparation costs.SeePaul Sardella Constr. Co. v. Braintree Hous. Authy., 371 Mass. 235, 243, 356 N.E.2d 249(1976).More significantly, "we have on occasion answered questions in moot cases where the issue was one of public importance, where it was fully argued on both sides, where the question was certain, or at least very likely, to arise again in similar factual circumstances, and especially where appellate review could not be obtained before the recurring question would again be moot."Lockhart v. Attorney Gen., 390 Mass. 780, 783, 459 N.E.2d 813(1984).SeeSciaba Constr. Corp. v. Boston, 35 Mass.App.Ct. 181, 185, 617 N.E.2d 1023(1993).Cf.Grande & Son, Inc. v. School Hous. Comm. of North Reading, 334 Mass. 252, 259, 135 N.E.2d 6(1956).Because of the significance of the question to the public and because the facts as developed permit us to do so, we have decided the ultimate question: whether the public interest warranted rejection of the original bids.³

3.Interpretation of G.L. c. 30, § 39M.Section 39M of the act provides that the "awarding authority may reject any and all bids, if it is in the public interest to do so."Some courts in other jurisdictions have clearly defined the meaning of "public interest" within the context of their public bidding statutes to mean guarding "against favoritism, improvidence, extravagance and corruption."Morie Energy Mgmt., Inc. v. Badame, 241 N.J.Super. 572, 576, 575 A.2d 885(1990), quoting fromHillside Township v. Sternin, 25 N.J. 317, 322, 136 A.2d 265(1957).SeeConduit & Foundation Corp. v. Metropolitan Transp. Authy., 66 N.Y.2d 144, 148, 495 N.Y.S.2d 340, 485 N.E.2d 1005(1985);Nelson Inc. of Wis. v. Sewerage Commn. of Milwaukee, 72 Wis.2d 400, 408, 241 N.W.2d 390(1976).

Similar objectives are found in this State's scheme.Read in conjunction with G.L. c. 149, §§ 44A-44M, the legislative goals of § 39M are two-fold.First, to create an open and honest competition with all bidders on an equal footing.Interstate Engr. Corp. v. Fitchburg, 367 Mass. 751, 758, 329 N.E.2d 128(1975).Absent such a restriction, an awarding authority would be free to rebid a contract until a preferred bidder submitted the lowest bid price, and thwart one of the important legislative goals.SeeCardell, Inc. v. Woodbridge, 115 N.J.Super. 442, 450, 280 A.2d 203(1971).Second, § 39M enables the public contracting authority to obtain the lowest eligible bidder.Interstate Engr. Corp. v. Fitchburg, supra, 367 Mass. at 757, 329 N.E.2d 128.In reviewing the conduct of awarding authorities in regard to bid protests, we think equal weight should be given to the two stated purposes of the statute.While there is no Massachusetts case directly on the point, other courts have made clear that awarding authorities may not reject bids simply to obtain a lower price.SeeSuperior Oil Co. v. Secretary of the Interior, 409 F.2d 1115, 1120(D.C.Cir.1969);Caruci v. Dulan, 41 Misc.2d 859, 864, 246 N.Y.S.2d 727(1964), rev'd on other grounds, 24 A.D.2d 529, 261 N.Y.S.2d 677(1965).Cf.Grande & Son, Inc. v. School Hous. Comm. of North Quincy, 334 Mass. at 258, 135 N.E.2d 6.

The possibility of rebidding a project in order to obtain a lower bid was disfavored in the Caruci case where the court stated that "[s]uch a procedure also exposes the secret bid price to other potential bidders and may provide the means whereby a future municipal government can use this power of rejection to award contracts to persons of their choice."Caruci v. Dulan, supra41 Misc.2d at 864, 246 N.Y.S.2d 727.An identical theme is found in one of the earliest bid protest cases, Sweezey v. Mayor of Malden, 273 Mass. 536, 542, 174 N.E. 269(1931), which cautioned that any application of the bidding laws which would give the awarding authority "an opportunity to exercise favoritism in awarding contracts" should be avoided.

To avoid unfairness in that regard, an essential element of the "equal footing" principle not only requires that "bidders have the opportunity to bid in the same way," but mandates that bidders "bear the same risk of rejection."Department of Labor & Indus. v. Boston Water & Sewer Commn., 18 Mass.App.Ct. 621, 626, 469 N.E.2d 64(1984).

4.The merits.It follows from what has been said about the purpose of § 39M in context of the well known standards for awarding or denying preliminary relief and for appellate review set forth in Packaging Indus. Group, Inc. v. Cheney, 380 Mass. 609, 610-618, 405 N.E.2d 106(1980), that Petricca demonstrated a reasonable likelihood of success on the merits.

In its May, 1992, decision, the DOLI determined that the department's rejection of all bids was not in the public interest.It found that the department failed to prove, as required by G.L. c. 30, § 39M, that the public interest would be served by rejecting all bids and rebidding the contract.As was the case in Modern Continental Constr. Co. v. Lowell, 391 Mass. at 837, 465 N.E.2d 1173, the single justice could take into consideration the DOLI decision even though it was entitled to no special weight.Sciaba Constr. Corp. v. Boston, 35 Mass.App.Ct. at 183 n. 4, 617 N.E.2d 1023.

The department's decision to order rebidding of...