In May 2012, the Commonwealth’s highest court looked at the practices of one Massachusetts town in evaluating whether the low bidder on a new police station project satisfied the “responsibility” requirement of the Massachusetts bidding law, Chapter 149, § 44A-J. In Barr v. Town of Holliston, a town administrator directed the chief of police to conduct an investigation of Barr, Inc., the apparent low bidder on the project. After contacting a number of other municipalities that had previously worked with Barr, the town received several negative references and concluded that Barr was not a responsible bidder and therefore ineligible to be awarded the contract.
Barr filed suit asserting that the town’s independent investigation, which looked beyond the information contained in the DCAM certification files was unlawful. Under Chapter 149, a bidder is considered responsible when it demonstrates that it possesses “the skill, ability and integrity necessary to faithfully perform the work called for by the particular contract, based upon a determination of competent workmanship and financial soundness…” The Supreme Judicial Court recognized that, although DCAM serves as a clearinghouse of information between various public awarding authorities relative to contractors’ certification and performance on public projects, it is the individual awarding authorities—in this case the town of Holliston—that are required to determine the contractor’s responsibility, or lack thereof.
Although Chapter 149 requires an awarding authority to review the bidder’s DCAM update statement and certification file, the court held that an awarding authority need not limit its investigation to the four corners of the DCAM file and could conduct an additional investigation of the bidder’s past performance. The Court rejected Barr’s arguments that allowing such open-ended investigations by public awarding authorities would result in preferential treatment of certain contractors. The Court reasoned that such risks are mitigated by a disappointed contractor’s right to protest the awarding authority’s decision or bring a challenge to Superior Court. However, such redress, while certainly available to a contractor, is costly, time consuming, and unlikely to lead to either a meaningful financial recovery or an injunction halting the award of a contract to the next lowest bidder.
The decision in Barr confirms that awarding authorities are vested with substantial authority to conduct investigations and review information beyond the DCAM certification file. Public officials must remember to properly document such investigations and be mindful that decisions stemming from such investigations— particularly findings that a contractor is not responsible—must be supported by the record.