In May’s issue, we discussed a bidder responsibility decision of the Bid Unit of the Massachusetts Office of the Attorney General (the “Bid Unit”).  In that case, the awarding authority rejected the low bidder as allegedly “difficult to work with.”   The low bidder filed a protest – and won.  The Bid Unit tackled a similar issue again in July: can an awarding authority reject a bidder due to alleged personality issues?  The short answer is: yes.

The case arose out of a school building renovation project for a Massachusetts community college.  The winning bidder would have to perform its work in an occupied “live” building.After bid opening, the awarding authority’s consulting engineer contacted references and received the following feedback:

• One reference reported that: she had to “mediate a confrontation between the project owner” and the low bidder; the low bidder was “contentious” and also “unprofessional”; and the low bidder demonstrated “personality and behavior issues.”
• Another reference echoed that the low bidder “had a contentious relationship with its subcontractors in meetings and on-site.”

In addition, the consulting engineer reported that the low bidder was “very rude” during the investigation process.
These issues led the consulting engineer to determine that the low bidder was not responsible.  As a result, the awarding authority rejected the low bidder, prompting the bid protest.

The Bid Unit denied the protest because the protestor failed to demonstrate that its rejection was arbitrary.  According to the Bid Unit, the awarding authority’s “rationale for rejecting [the low bidder] was reasonably based on the fact that it had received reports of contentious behavior, unprofessional interactions and personality conflicts on the part of [the low bidder] on past projects.”  The Bid Unit added that, because the work would be performed in a live/occupied building, “past negative interactions on projects are highly relevant to a finding of non-responsibility for this particular Project.”  In short, the low bidder was not able to rebut its “documented history of contentious relationships with owners and subcontractors . . . .”

The decision raises a number of questions concerning the breadth of an awarding authority’s discretion to reject a bidder on responsibility grounds.  Disputes are commonplace on construction projects.  So what does it mean to be “contentious?”  Is a contractor that aggressively (and legitimately) asserts its rights “contentious”?  Why should it even matter?  Ted Williams – one of baseball’s greatest hitters – is famously remembered for having a difficult and contentious relationship with his critics.  But that would not have been a valid reason to prevent him from playing baseball.

The competitive bidding statutes define what it means to be “responsible.”    Under Chapter 30, Section 39M, the “lowest responsible and eligible bidder” is the bidder “whose bid is the lowest of those bidders possessing the skill, ability and integrity necessary for the faithful performance of the work . . . .”  Similarly, Chapter 149 defines “responsible” to refer to a bidder “demonstrably possessing the skill, ability, and integrity necessary to faithfully perform the work called for by a particular contract, based upon a determination of competent workmanship and financial soundness . . . .”

Arguably, the “integrity” prong provides a foundation for an awarding authority to reject a contractor based on personality issues.  But integrity normally refers to honesty.  Certainly, a contractor can be both “contentious” and honest.  The Bid Unit itself has previously stated that the fact that an awarding authority may have a “personality clash” with a contractor “does not justify a finding that [the contractor] lacked ‘integrity’” under the competitive bidding laws.

This case likely came down to the facts.  The low bidder could not explain the “documented history” of difficult relationships on prior projects, including allegations of “unprofessionalism.”  Unfortunately for the low bidder, although it may well have had the “skill” and “ability” to “faithfully perform” the work, it lost out on the project due to its alleged conduct on prior projects.

The case serves as a good reminder of the value of professionalism.  Awarding authorities want smooth projects.  They compare notes, acknowledging good contractors and warning against bad contractors.  In these circumstances, responsible bidders can find themselves rejected for personality issues that are largely subjective. The good news is that bidders can guide if not control their own destinies.  By embracing a professional approach, bidders can minimize opportunities for awarding authorities to reject them due to conduct on other projects and alleged personality issues.

Please also note a few practice-point takeaways.  The Bid Unit’s decisions are not binding.  A bidder aggrieved by a decision of an awarding authority can challenge the awarding authority’s decision in court, even after an adverse decision of the Bid Unit.  Alternatively, a protestor can file its challenge in court in the first instance.  In addition, a contractor facing rejection for “personality” issues will normally have several legal arguments at its disposal.  Among other things, an awarding authority cannot disregard facts and circumstances and its decision must be justified on the record.  Contractors can also use the Public Records Law as a tool to obtain documents and information upon which the awarding authority relied in reaching its decision.  This exercise can often reveal reasons why the awarding authority’s decision should not be upheld.  Experienced counsel can also help contractors develop and execute tactful strategies to best position themselves to challenge these types of decisions.