Generally speaking, bid protests challenging an awarding authority’s determination of bidder responsibility among the most difficult to win. While M.G.L. c. 30, § 39M requires an award to the “lowest responsible and eligible bidder,” the public works construction statute defines this phrase to refer to the bidder “whose bid is the lowest of those bidders possessing the skill, ability and integrity necessary for the faithful performance of the work.” Thus, Section 39M has both an objective component and a discretionary component. The bid must not only be objectively low, the bidder must have the “skill, ability and integrity” necessary to faithfully perform the work. This is a discretionary decision for the awarding authority to make.
Because the awarding authority has discretion to determine bidder responsibility, the decision of the awarding authority will typically only be overturned in limited circumstances, such as where the decision is arbitrary and capricious. This is a high standard and the fact that a disappointed bidder may disagree with the awarding authority’s determination will not be enough to win a bid protest.
However, bidders should know that the awarding authority’s discretion is not “unconstrained.” An awarding authority generally cannot act in disregard of facts and circumstances. The awarding authority must make a reasonable investigation and base its decision on relevant facts. The decision must be justified on the record.
Importantly, an awarding authority may conduct its own investigation and consider information beyond that which is submitted at bid time. Sometimes, third-parties supply awarding authorities with information concerning a particular bidder. This was the subject of a recent bid protest decision of the Bid Unit of the Massachusetts Attorney General (the “Bid Unit”).
The case arose out of a municipal roadway and intersection improvement project. After bid opening, a third-party provided the awarding authority with information regarding the apparent low bidder, including information regarding prior Wage Act, DPU, and OSHA citations. The awarding authority did not promptly notify the low bidder of this development, did not request any information from the low bidder, and did not contact any of the low bidder’s references. Instead, the awarding authority rejected the low bid after confirming the citation information using an online “Violation Tracker” database and without performing any further investigation. When it advised the low bidder of its decision, the awarding authority did not identify the reasons for rejection. A bid protest ensued.
The Bid Unit determined that the awarding authority arbitrarily rejected the low bid without providing the apparent low bidder with an opportunity to respond and without conducting a “meaningful investigation” of bidder responsibility. The Bid Unit stated that when an awarding authority receives third-party information, the awarding authority must disclose that information to the bidder “as soon as the information is received . . . regardless of whether the awarding authority reviewed or relied upon the information.” (Emphasis in original). The Bid Unit recognized the importance of affording the bidder an opportunity to respond before the awarding authority makes its determination. The Bid Unit added that a bidder “should not have to resort to retaining counsel and filing a public records request in order to learn the actual facts and circumstances of its rejection.”
The Bid Unit concluded by recognizing that there is “no statutory requirement” that a bidder have a “completely error-free” record to be found responsible. Bidders are entitled to a “meaningful, balanced investigation” by the awarding authority. Because that did not happen in this case, the Bid Unit allowed the protest.
