Thorn Transit Systems Intern., Ltd. v. Massachusetts Bay Transp. Authority

• Decision Date: 02 October 1996
• Docket Number: No. 96-P-665,96-P-665
• Citation: 667 N.E.2d 881,40 Mass.App.Ct. 650
• Court: Appeals Court of Massachusetts
• Parties: THORN TRANSIT SYSTEMS INTERNATIONAL, LTD., & another 1 v. MASSACHUSETTS BAY TRANSPORTATION AUTHORITY & another. 2

Page 881

667 N.E.2d 881

40 Mass.App.Ct. 650

THORN TRANSIT SYSTEMS INTERNATIONAL, LTD., & another¹ v.MASSACHUSETTS BAY TRANSPORTATION AUTHORITY & another.²

No. 96-P-665.

Appeals Court of Massachusetts Suffolk.

Argued May 21, 1996.

Decided July 3, 1996.

Further Appellate Review Denied Oct. 2, 1996.

Thomas R. Murtagh, Boston, for Massachusetts Bay Transportation Authority.

Lanny J. Davis, of the District of Columbia, for Scheidt & Bachmann GmbH.

Thomas R. Kiley, Boston, for Cubic Automatic Revenue Collection Group.

John B. Flemming, Boston, for Thorn Transit Systems International, Ltd.

Before BROWN, KAPLAN and LENK, JJ.

LENK, Justice.

The plaintiffs in this matter are two disappointed bidders in a competitive procurement process established by the defendant Massachusetts Bay Transportation Authority (MBTA), ³ the provider of rapid transit services to municipalities in eastern Massachusetts.The procurement's goal was to replace the MBTA's current, largely cash and token-based rapid transit fare collection system with a computerized, automated, integrated, state of the art fare collection system.After the MBTA awarded the approximately $40 million dollar contract for the provision and installation of the new system to defendantScheidt & Bachmann, GmbH, the plaintiffs sought to enjoin it, claiming that the procurement did not comply with G.L. c. 30, § 39M, and must be rebid, and that, in the alternative, even if c. 30, § 39M, were inapplicable to the subject contract, the MBTA had impermissibly awarded the contract in contravention of its own RFP.⁴

A judge of the Superior Court denied the plaintiffs' request for injunctive relief without stating his reasons.A single justice of this court, acting pursuant to G.L. c. 231, § 118, first par., thereafter enjoined the MBTA from continuing with its contract with Scheidt & Bachmann or from awarding the contract to any contractor until the project is rebid in accordance with the requirements of G.L. c. 30, § 39M.The single justice, in view of her determination that c. 30, § 39M, applies to this procurement, did not reach the plaintiffs' other claims of impropriety offered to support their request for injunctive relief.The single justice authorized the defendants to pursue an interlocutory appeal from her order.

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).The inquiry we make, accordingly, is "whether the single justice abused [her] discretion by entering an order without having a supportable basis for doing so."Petricca Constr. Co. v. Commonwealth, 37 Mass.App.Ct. 392, 395, 640 N.E.2d 780(1994).We conclude that her order was proper.

The central issue on appeal is whether c. 30, § 39M, governs the subject procurement.The defendants concede that, if it does, the MBTA's procurement process failed to comply with statutory requirements.Section 39M provides, in pertinent part, that:

"Every contract for the construction, reconstruction, alteration, remodeling or repair of any public work, or for the purchase of any material ... by the commonwealth, or political subdivision thereof ... and estimated by the awarding authority to cost more than ten thousand dollars ... shall be awarded to the lowest responsible and eligible bidder on the basis of competitive bids...."

G.L. c. 30, § 39M(a), as amended bySt.1991, c. 477, § 5."Material" is defined in § 39M(e) to mean and include "any article, assembly, system, or any component part thereof."Section 39M by its terms does not apply to certain transactions, such as contracts otherwise subject to the provisions of c. 149, §§ 44A et seq.See§ 39M(a).Cf.§ 39M(d ).

The MBTA does not contend that it is exempt from § 39M, and the contract cost plainly exceeds ten thousand dollars.Whether § 39M applies to the subject contract depends solely on whether it is "for the construction, reconstruction, alteration, remodeling or repair of any public work, or for the purchase of any material"(i.e., article, assembly, system or any component part thereof).The MBTA and Scheidt & Bachmann contend, in essence, that the subject contract for the provision and installation of the new fare collection system falls outside of the scope of § 39M because no "public work" or material therefor is implicated by the contract.

Section 39M"is designed to obtain the lowest price that competition among reasonable bidders can secure for contracts involving the actual physical 'construction'(including reconstruction, alteration, maintenance, remodeling or repair) of public buildings and improvements on land owned by the Commonwealth or one of its subdivisions, and contracts for the materials that typically go into such construction projects."Andover Consultants, Inc. v. Lawrence, 10 Mass.App.Ct. 156, 160, 406 N.E.2d 711(1980).ContrastGosselin's Dairy, Inc. v. School Comm. of Holyoke, 348 Mass. 793, 205 N.E.2d 221(1965).

In determining whether the subject contract involves (a) the construction, reconstruction, alteration, maintenance, remodeling or repair of public buildings and improvements on land and/or (b) the materials that typically go into such projects, we must examine the character of the RFP which resulted in the contract.SeeDatatrol Inc. v. State Purchasing Agent, 379 Mass. 679, 695, 400 N.E.2d 1218(1980).This endeavor is somewhat hampered by the absence from the record on appeal of complete copies of both the RFP and the contract awarded to Scheidt & Bachmann.Nonetheless, the materials available to the single justice disclose that the RFP calls for the complete replacement of the existing MBTA subway fare collection system with a new system consisting, inter alia, of ticket vending machines, ticket validators, and standard and special access fare gates at 92 subway and Green Line stations, as well as support equipment including money room equipment and a centralized fare collection system information network.The contractor is required to remove the old system and to install the new one, which is to perform specific functions at a guaranteed level of reliability.This removal, provision, and installation work apparently also involves the physical removal and installation of station fare collection equipment and associated equipment at the rapid transit stations, the wiring of various types of station communications, computer and support equipment, the reconfiguration and remodeling of rapid transit stations to accommodate the new system, the coordination of work with and oversight of the contractor selected to perform station modification work, extensive design services, and money room design and installation.The foregoing supports the characterization of the contract as one involving physical alteration and remodeling type activities, as well as the provision of articles, assemblies, systems and/or component parts used in such activities.Such work and materials are all in connection with what we recognized in Andover Consultants, 10 Mass.App.Ct. at 160, 406 N.E.2d 711, as being encompassed within the statutorily undefined term "public work," i.e., "public buildings and improvements on land owned by the commonwealth or one of its subdivisions."

The MBTA and Scheidt & Bachmann resist this conclusion by focusing attention on the fact that the construction activity is to be conducted at, or in connection with, subway and Green Line stations.We are assured by them that such stations can only be public buildings and, we are told, substantial public building construction (so-called "vertical" construction) activities are governed exclusively by c. 149, §§ 44A et seq., from which the MBTA is exempt, and not by c. 30, § 39M(which deals with so-called "horizontal" construction).We are also assured that the case law(leaving aside Andover Consultants, supra ) requires us to construe the term "public work" restrictively and in a manner which renders it and the term "public building" mutually exclusive.To do otherwise, we are told, would result in our entering impermissibly into the Legislature's domain.The cases to which our attention is called in this regard, however, do not support the heavy weight which the MBTA and Scheidt & Bachmann would have them bear.

In Modern Continental Constr. Co. v. Lowell, 391 Mass. 829, 465 N.E.2d 1173(1984), the project at issue was the construction of miles of sewer pipeline and two pumping stations, one of which was not to be entirely subterranean and was to have amenities such as a restroom.The project had been put out to bid largely pursuant to c. 30, § 39M, but certain c. 149, §§ 44A et seq., bidding requirements were imposed as to the one special pumping station, presumably because it was regarded as a building.The Supreme Judicial Court held that c. 149, §§ 44A et seq., applied to the entire project and that rebidding as ordered by the trial court was the appropriate course.Id. at 840, 465 N.E.2d 1173.In so holding, the court noted that c. 30, § 39M, by its own terms is not applicable to contracts subject to the extensive bidding requirements of c. 149, §§ 44A et seq.Id. at 832 n. 6, 465 N.E.2d 1173.The court acknowledged, but did not elaborate on, the distinction between the "public works" with which c. 30, § 39M, is concerned and the "building by a public agency" toward which c. 149, §§ 44A et seq., is directed.Id. at 838-839, 465 N.E.2d 1173.The court did not elucidate what does and does not constitute a "public work" and declined the parties' invitation to clarify the meaning of "building" as used in the bidding statutes.Id. at 839, 465 N.E.2d 1173.The teaching of Modern Continental, consistent with that of Gil-Bern Constr. Corp. v. Brockton, 353 Mass. 503, 505, 233 N.E.2d 197(1968), appears to be that when the public work to be bid out and...