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Minimum Experience Requirements

An awarding authority has discretion when it comes to waiver of non-statutory bidding requirements.  However, as illustrated in a recent decision of the Bid Unit of the Massachusetts Attorney General’s Office (the “AGO”), that discretion does not enable an awarding authority to abandon substantial experience requirements it chose to implement on a given project.

The project in question involved the demolition, rehabilitation and replacement of a utility corridor for a state university.  A significant component of the $4.2 Million project involved HVAC and plumbing work, but there was conflicting evidence as to how much of the project consisted of such work.  The protestor – a labor union – argued that 80% of the project was earth-moving and excavation, with roughly $1 Million in HVAC and plumbing work.   The university argued that the HVAC and plumbing work comprised $2 Million of the $4.2 Million estimated project cost.

The university required bidders to submit a qualifications form listing “a minimum of 10 public and private non-building projects which are similar in value and scope to this project” along with references.  As it turned out, the low bidder was an HVAC contractor, not an excavation contractor.  The low bidder listed 12 HVAC projects with an average value of $536,922.17.  The university nevertheless accepted the bid, prompting the labor union to file a protest.

Although experience requirements are not mandated by statute, the AGO stated that principles of “equal footing” and “fair and open competition” would “prohibit noncompliance with such experience requirements.”  In other words, the university could not waive the minimum experience requirements it chose to impose on bidders for the project.  Otherwise, the procurement would allow the low bidder to gain advantage by bidding in a different way or on a different basis from other bidders.  According to the AGO, “[a] bidder who knows it does not meet the experience requirements and then effectively calls upon the awarding authority to waive those requirements after the fact is requesting a post-bid change in the rules that governed the procurement process.”

The AGO recognized an awarding authority’s discretion to waive non-statutory bidding requirements.  But that discretion does not enable an awarding authority to “abandon significant experience qualifications which influence which bidders choose to submit a bid and the bidders’ assessment of the costs and conditions of performing the contract.”

Where – as here – the low bidder’s bid was “906% higher than its average completed contract value for HVAC work,” the AGO concluded that the low bid must be rejected for failure to meet the university’s minimum experience requirements.  Notably, had the low bidder shown experience on HVAC projects valued at $1-2 Million, the AGO probably would have had to determine the other question presented in the bid protest: whether this project was primarily an excavation project, or an HVAC/plumbing project.  The AGO did not answer this question in its decision.

This case presented what appeared to be a clear example of one bidder’s obvious failure to meet minimum experience requirements.  However, it should be noted that determining what projects are comparable for purposes of evaluating bidder experience is normally a much closer call.  The AGO and the courts will not substitute their judgment for that of the awarding authority.

Published in the January 2018 edition of UCANE's Construction Outlook.