Interstate Engineering Corp. Vs. City of Fitchburg & others, 367 Mass. 751

Court: SUPREME JUDICIAL COURT OF MASSACHUSETTS
Citation: 367 Mass. 751
Parties: INTERSTATE ENGINEERING CORP. vs. CITY OF FITCHBURG & others. 1
County: Middlesex
Hearing Date: October 15, 1974
Decision Date: May 16, 1975
Judges: TAURO, C.J., REARDON, QUIRICO, BRAUCHER, HENNESSEY, KAPLAN, & WILKINS, JJ.

Where it appeared that between the opening of the filed sub-bids on a public works project of a city subject to G. L. c. 149, Sections 44A-44L, and the submission of the general bids it was arranged between a sub-bidder which had submitted a filed sub-bid for interior piping work and a prospective general bidder, to which the general contract was later awarded, that the sub-bidder would do exterior piping work, constituting a part of general contractor's work and to be covered by item 1 of the general bid, at a price substantially below cost and that the general bidder in item 2 of its general bid would list the sub-bidder for the interior piping work at the price stated in its filed sub-bid, although that price was not the lowest filed for the interior piping work, it was held that under Section 44H such arrangement between the sub-bidder and

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1 The other two defendants are Limbach Company and Westcott Construction Corporation.

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TAURO, C.J. The plaintiff appeals from a final decree which declared valid a sub-bid for certain mechanical work, which had been filed with the defendant city of Fitchburg by the defendant Limbach Company (Limbach).

The judge made findings of fact, which are not challenged. In the early part of 1973, the city invited general bids and sub-bids for the construction of a wastewater treatment facility. As authorized by G. L. c. 149, Section 44C (as amended through St. 1970, c. 497), the city established interior piping work as a separate category of work for the receipt of sub-bids. 2 Although certain exterior

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2 Section 44C lists seventeen classes of work for each of which a separate section must be included in the specifications, if the awarding authority estimates its costs to exceed $1,000. Additionally, an awarding authority may establish separate specifications for "any other class of work for which the awarding authority deems it necessary or convenient to receive sub-bids." General Laws c. 149 makes no subsequent distinction between sub-bids on such work and sub-bids on work which Section 44C requires to be put out to bid.

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piping was included in the project, no sub-bids were requested for that work. Therefore, that exterior work was to be done as part of the work covered solely by the bid of the general contractor.

On May 9, 1973, various sub-bids were submitted for the interior piping work. 3 The plaintiff's bid in the

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3 Subbidding procedure is regulated by G. L. c. 149, Section 44H (as amended through St. 1965, c. 836, Sections 4, 5, 6). The statute provides in relevant part: "Every sub-bid in connection with a contract subject to section forty-four A for a sub-trade designated in Item 2 of the general bid form pursuant to section forty-four C shall be for the complete work of the sub-trade as specified, and shall be filed with the awarding authority, in a sealed envelope, before twelve o'clock n oon at least four days . . . before the day fixed by the awarding authority for the opening of general bids, and forthwith after the time limit for the filing thereof shall be publicly opened and read by the awarding authority, which, within two days thereafter . . . shall reject every sub-bid which is not accompanied by a bid deposit as prescribed in subsection (1) of section forty-four B, or which otherwise does not conform with sections forty-four A to forty-four L, inclusive, or which is on a form not completely filled in, or which is incomplete, conditional or obscure, or which contains any addition not called for; provided, however, that the failure of the awarding authority to reject such a sub-bid within such period shall not validate such a sub-bid nor preclude the awarding authority from subsequently rejecting it. Not later than the second day . . . before the day fixed by the awarding authority for the opening of general bids, the awarding authority shall mail to every person on record as having taken a set of plans and specifications a list of sub-bidders arranged by sub-trades and listing for each sub-trade the name, address and sub-bid price of every sub-bidder submitting a sub-bid thereon not rejected by the awarding authority and the general bidders excluded from using such sub-bid. A person shall not be named by a general bidder as a sub-bidder for a sub-trade in Item 2 of the general bid form unless such person is included for such sub-trade in said list. . . . Every sub-bidder duly filing a sub-bid with the awarding authority as aforesaid shall be bound thereby to every general bidder not excluded therein from the use thereof; and any variance from such sub-bid communicated to a general bidder shall be of no effect."

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amount of $3,038,000 was the lowest. Limbach submitted the second lowest bid, in an amount which was $86,000 higher than the bid of the plaintiff.

On May 15, 1973, the day before bids from general contractors were due, a representative of Limbach told the president of the defendant Westcott Construction Corporation (Westcott), a company planning to submit a general bid, that Limbach was working on a price for the exterior piping work. The president of Westcott advised Limbach that he was interested in the combined price for the interior and exterior piping work. On the morning of May 16, 1973, before the general bids were filed, Limbach quoted to Westcott a price of $76,000 for the exterior piping work and stated that the combined price for all piping work would be $3,200,000. Westcott and Limbach clearly understood that as a condition to the availability of a price of $76,000 for the exterior piping work, Westcott would have to list Limbach as the subcontractor to do the interior piping work. They also understood that Limbach was willing to do the interior work for the bid price of $3,124,000 in any event. Before bids were opened, the plaintiff quoted to Westcott a price of $305,350 for the exterior piping work.