Rudolph v. City Manager of Cambridge
| Decision Date | 05 May 1960 |
| Citation | 167 N.E.2d 151,341 Mass. 31 |
| Parties | Bernard RUDOLPH et al. v. CITY MANAGER OF CAMBRIDGE et al. |
| Court | United States State Supreme Judicial Court of Massachusetts Supreme Court |
Richard D. Gerould, City Sol., Boston, for City Manager of Cambridge and another.
Harold Rosenwald, Boston (Paul A. Powell, Brookline, with him), for Columbia Cornice Co.
Joseph M. Corwin, Boston, for petitioners and another.
Before WILKINS, C. J., and SPALDING, WILLIAMS, WHITTEMORE and CUTTER, JJ.
This is primarily a petition brought in the Superior Court by more than ten taxable inhabitants of Cambridge, under G.L. c. 40, § 53, to restrain the city manager and city treasurer (the respondents) from paying out money of the city for roofing and flashing work under a contract for the construction of a school building. A demurrer was overruled and the respondents appealed. The grounds stated were that the allegations were insufficient in law, and did not state a cause concisely and with substantial certainty or a wrong for which a petition in equity was the proper remedy. After a hearing and the entry of findings of material facts, rulings of law and order for decree, Burgess & Blacher Company (Burgess) was allowed to intervene as an interested party and Columbia Cornice Company (Columbia) was admitted as an intervening respondent. The respondents and Columbia appealed from the final decree which granted relief asked in the petition.
The dispute involves the use of Columbia as subcontractor for roofing and flashing work in the construction of a school. Columbia and Burgess submitted bids for this work. Burgess was the lowest subbidder, and its subbid was incorporated in the bid of the lowest general bidden, John Bowen Co., Inc. (Bowen), to which the general contract was awarded. Before the award to Bowen the respondent city manager as the awarding authority, Bowen agreeing, substituted Columbia as the roofing subcontractor, and increased the general contract price by $174, the difference between the Burgess and the Columbia subbids.
The judge found that the sole basis of this substitution was Ordinance 270 of the city of Cambridge. The evidence was reported, and sustains the finding. 1
Ordinance 270 purports to allow a preference in the awarding of contracts to bidders having their place of business in Cambridge. The ordinance is restricted to contracts below $10,000; each of the bids in question was about $38,000 in amount.
The submission of bids and the awarding of the contract were governed by G.L. c. 149, §§ 44A-44L, inserted by St.1956, c. 679, § 1, and amended by St.1957, c. 590, §§ 1, 2. Under this statute (§§ 44G-44H) the subbids are submitted to the general bidders through the awarding authority. Section 44A requires that the award of the general contract be made within thirty days of the opening of the general bids to the lowest responsible and eligible general bidder.
Section 44I(2) provides:
Section 44I(2) is to be read with the form of general bid prescribed by § 44F which requires that each general bidder agree that 'if he is selected * * * he will promptly confer with the awarding authority on the question of sub-bidders; and that the awarding authority may substitute for any sub-bid * * * a sub-bid duly filed with the awarding authority * * * against whose standing and ability the undersigned makes no objection; and that * * * [he] will use all such finally selected sub-bidders * * * and be in every way * * * responsible for them and their work * * *.'
1. The respondents contend that, since the statute does not specify the grounds of a decision to substitute, the awarding authority has a broad discretion and its decision may not be set aside unless the officers acting 'have acted corruptly or in bad faith 2 or so unreasonably or arbitrarily as to be guilty of a plain abuse of discretion.' Slocum v. Medford, 302 Mass. 251, 254, 18 N.E.2d 1013, 1015, and cases cited.
These cases state the rule where the statute does not expressly or by implication limit the discretion of the awarding authority in determining with whom to contract directly for the doing of all the work. Even in the absence of statutory restriction the discretion may be more limited when exercised in respect of a subbidder with whom the awarding authority will not contract and for whose performance it will look to the general contractor. We think such discretion could in any case be availed of only for a cause having some reasonable relation to a public interest which could be affected by the general contract. We think also that it was against the interest of the city to require that it pay more for doing the work than was otherwise necessary merely because of the mistaken belief that an inapplicable ordinance was applicable or that it indicated a valid policy applicable beyond its express terms. We do not suggest that had the ordinance been in terms applicable it would have supported a different result. The statute giving preference to local residents in 'the employment of mechanics, teamsters, chauffeurs and laborers' (G.L. c. 149, § 26) at established wages contains no implication of support for a policy to burden a municipality with unnecessary expense. Although this holding is sufficient to show the correctness of the judge's conclusion that the subcontract was illegally awarded, the decree, in another aspect, discussed in section 3, below, and allegations in a motion to amend, stated in section 4, below, call for a construction of the statute.
2. The statute read as a whole shows an unmistakable intent that the power of the awarding authority to require the rejection of a subbid, which is in all formal aspects satisfactory, in favor of a higher available bid, may be exercised only for lack of competence of the rejected bidder.
Section 44D provides that '* * * In inviting sub-bids * * * the awarding authority shall reserve the right to reject any sub-bid * * * if it determines that subh sub-bid does not represent the sub-bid of a person competent to perform the work as specified or that only one such sub-bid was received and that the price is not reasonable for acceptance without competition.' This language implies that there is no right in the awarding authority to reject the lowest bidder on grounds not specified in this section or in § 44H. See Grande and Son, Inc. v. School Housing Comm. of No. Reading, 334 Mass. 252, 258, 135 N.E.2d 6; James Constr. Co. Inc. v. Commissioner of Pub. Health, 336 Mass. 143, 146, 143 N.E.2d 206; Brisk Waterproofing Co. Inc. v. Director of the Div. of Bldb. Constr., 338 Mass. 784, 153 N.E.2d 750.
Section 44I(1) provides that if there is no subbid for a subtrade, or all are rejected pursuant to § 44D or § 44H, 'new sub-bids * * * shall be requested * * * [and in due course the] general contractor shall cause the work * * * to be done by the lowest responsible and eligible sub-bidder against whose standing and ability the general contractor makes no objection * * *.' This express restriction in the choice from among a second group of sub-bidders implies a similar restriction in the selection of a subbidder in the first instance. 3 Compare comment on a forerunner of this provision in another connection in East Side Constr. Co. Inc. v. Adams, 329 Mass. 347, 354-355, 108 N.E.2d 659.
The intent of the statute to limit the awarding authority's right of selection among subbidders is shown also in § 44B(3) in the provision that all bid deposits of subbidders
Opportunity is needed to reject subbids on substantive grounds after a choice has been made among the general bidders. Section 44I(2) in terms specifies that there be a conference between the awarding authority and the selected general bidder in the event that, after the selection of the latter, 'it be decided to consider sub-bidders other than the ones named by such general bidder * * *.' Two reasons for such consideration are apparent: (1) a lower subbid than one used by the selected bidder coupled with the possibility that the general bidder will be willing to contract with the lower subbidder even though he did not use that bid in the first instance; and (2) the determination of the awarding authority of the incompetence of the subbidder offered by the general bidder. Rejection of a subbidder after subbids have been submitted to the general bidders requires substitution of a subbidder which can occur only after the acceptability of another subbidder to the general bidder has been ascertained. See Poorvu Construction Co. Inc. v. Nelson Elec. Co. Inc., 335 Mass. 545, 548, 140 N.E.2d 891.
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