Bid Protest Decision Invalidates Mandatory Minimum Unit PricesAugust 16, 2017
On August 1, 2017, the Bid Unit of the Massachusetts Attorney General’s Office (the “AG”) issued a first-of-its-kind decision concerning MassDOT’s use of minimum unit price requirements. The AG’s well-reasoned opinion invalidates MassDOT’s minimum pricing policy as contrary to the competitive bidding laws. The decision immediately impacts a series of MassDOT procurements.
Hinckley Allen handled the protest, which arose out of a “various locations” contract for bridge repairs in MassDOT District 2. To prevent penny-bidding, MassDOT established minimum acceptable bid prices for 46 unit price items and stated that any bids with prices below the mandatory minimum prices “will be rejected.”
One potential bidder challenged this requirement before bid opening. The protestor argued that MassDOT’s minimum pricing requirement prevents MassDOT from obtaining the lowest price through open competition and demonstrated that at least one contractor could bid the project for $200,000 less than MassDOT’s minimum price. The protestor also argued that the pricing scheme prevents bidders from utilizing their unique and “hard-earned” advantages in the bidding process in violation of the Appeals Court’s well-known 1984 Boston Water & Sewer decision. The AG agreed and directed MassDOT to rescind its minimum unit price requirement.