By: Paul Emanuelli
This article is an excerpt from the 2021 edition of The Art of Tendering: A Global Due Diligence Guide, which is available for purchase.
In its February 2020 decision in Commonwealth of Massachusetts v. Town of Dracut, the Massachusetts Superior Court granted the State’s application for a declaration of non-compliance against the Town’s procurement practices. The action dealt with an application made by the state government to require the Town to follow public construction bidding laws and, more specifically, the prevailing wage laws required by statute. The state government asserted that during “the period 2017 through 2019, Dracut engaged in practices that violate the public construction bidding laws and the prevailing wage laws in connection with the awarding of contracts for various public construction services.” The Town agreed that it had failed to comply with those rules and entered into an out-of-court compliance settlement with the state government.
As the Court noted, Massachusetts state statute empowers the Massachusetts Attorney General to “institute and prosecute proceedings in the superior court to restrain the award of contracts and the performance of contracts in all cases where, after investigation of the facts, she has made a finding that the award or performance has resulted in a violation” of the public bidding statutes. The Court then detailed a long series of infractions of state law in which over a two-year period, the Town failed to properly put construction contracts out to tender on 18 different occasions for a total of over $9 million in improper awards:
From 2017 through 2019, Dracut engaged in practices that violated the public construction bidding laws in connection with the awarding of contracts for various construction services, including but not limited to: failing to solicit multiple quotes or sealed bids for certain projects; failing to properly advertise available contracting opportunities; failing to require contractor certification by DCAMM for construction projects involving buildings with an estimated value greater than $150,000; and failing to award construction contracts to the lowest responsible and eligible bidder.
As an example of Dracut’s practices referred to in paragraphs 16 through 20 above, in July 2017, Dracut failed to advertise the procurement of roadway construction work worth $260,000.00 in COMMBUYS.
As a further example of Dracut’s practices referred to in paragraphs 16 through 20 above, in August 2017, Dracut failed to advertise the procurement of asbestos abatement monitoring services worth $16,937.00 in any required publication and failed to seek multiple quotes for these services.
As a further example of Dracut’s practices referred to in paragraphs 16 through 20 above, in October 2017, Dracut failed to advertise the procurement of asbestos abatement services worth $136,588.00 in the Central Register and failed to seek multiple quotes for these services.
As a further example of Dracut’s practices referred to in paragraphs 16 through 19, above, in December 2017, Dracut failed to advertise the procurement of the installation of a fence at the Police Station worth $34,521.00 in any required publication.
As a further example of Dracut’s practices referred to in paragraphs 16 through 19, above, in June 2019 Dracut failed to advertise the procurement of the demolition of Beaver Brook Farm worth $74,470.00 in any required publication.
As a further example of Dracut’s practices referred to in paragraphs 16 through 20, above, in November 2019 Dracut failed to advertise the procurement of the Beaver Brook Trail improvements project worth $35,300.00 in any required publication.
As a further example of Dracut’s practices referred to in paragraphs 16 through 20, above, in November 2019 Dracut failed to advertise the procurement of asbestos abatement services for 539 Nashua Road worth $22,298.00 in any required publication and failed to seek multiple quotes for these services.
As a further example of Dracut’s practices referred to in paragraphs 16 through 20, above, in November 2019 Dracut failed to advertise the procurement of demolition services for 539 Nashua Road worth $15,000.00 in any required publication and failed to seek multiple quotes for these services.
As a further example of Dracut’s practices referred to in paragraphs 16 through 20, above, in January 2019, Dracut failed to advertise the procurement of asbestos abatement monitoring services for the Old Police Station worth $10,161.00 in any required publication and failed to seek multiple quotes for these services.
As a further example of Dracut’s practices referred to in paragraphs 16 through 20, above, in January 2019, Dracut failed to advertise the procurement of asbestos abatement services for the old police station worth $125,376.00 in any required publication and failed to solicit sealed bids for these services.
As a further example of Dracut’s practices referred to in paragraphs 16 through 20, above, in March 2019, Dracut failed to advertise the procurement of the construction of athletic fields worth $384,000.00 in COMMBUYS.
As a further example of Dracut’s practices referred to in paragraphs 16 through 20, above, in March 2019, Dracut failed to advertise the procurement of demolition services for the old police station worth $27,000.00 in any required publication and failed to seek multiple quotes for these services.
As a further example of Dracut’s practices referred to in paragraphs 16 through 20, above, in March 2019, Dracut failed to advertise the procurement of the construction of upgrades to the Merrimack Avenue Pump Station worth $98,506.00 in a newspaper of general circulation or in COMMBUYS.
As a further example of Dracut’s practices referred to in paragraphs 16 through 20, above, in June 2019, Dracut failed to advertise the procurement of renovations of Veterans Memorial Park worth $1,448,000.00 in COMMBUYS.
As a further example of Dracut’s practices referred to in paragraphs 16 through 20, above, in June 2019, Dracut failed to advertise the construction of the new fire station worth $6,400,000.00 in COMMBUYS.
As a further example of Dracut’s practices referred to in paragraphs 16 through 20, above, at various times from January 2018 through November 2019, Dracut failed to award building construction contracts valued at over $150,000 to contractors who were certified by DCAMM.
As a further example of Dracut’s practices referred to in paragraphs 16 through 20, above, at various times from January 2018 through November 2019, Dracut failed to award contracts to the lowest responsible and eligible bidders.
As a result of the investigation, the Attorney General determined, and Dracut agrees, that Dracut failed to comply with the competitive bidding processes as required by G.L. c. 149, §§ 44A-M and G.L. c. 30, § 39M in connection with the procurements identified in paragraphs 16 through 20, above.
Furthermore, the Court documented 15 separate instances in which the Town failed to follow applicable wage laws in the award of construction contracts:
In accordance with the prevailing wage laws, a public awarding authority must request a prevailing wage rate schedule from the Department of Labor Standards (“DLS”) prior to soliciting bids for public works projects; incorporate the rate schedule into the bid documents provided to all bidders by an appropriate reference for public works projects; furnish a copy of the schedule to all bidders and incorporate the rate schedule into contracts with selected contractors. See G.L. c. 149, § 26-27.
From 2017 through 2019, Dracut engaged in practices that violated the prevailing wage laws in connection with the awarding of contracts for various construction services, by failing to request prevailing wage rate schedules from DLS for each construction and covered public works project; failing to incorporate said rate schedules in bid solicitations; and failing to incorporate said rate schedules in contracts with selected contractors.
As an example of Dracut’s practices referred to in paragraph 40, above, in 2017, Dracut failed to request a prevailing wage rate schedule from DLS prior to soliciting bids for the demolition work at 2197 Lakeview Avenue; failed to incorporate the rate schedule into the bid documents provided to all bidders for this project; and failed to incorporate the rate schedule into contracts with the selected contractor.
As a further example of Dracut’s practices referred to in paragraph 40, above, in 2018, Dracut failed to request a prevailing wage rate schedule from DLS prior to soliciting bids for the demolition of Beaver Brook Farm; failed to incorporate the rate schedule into the bid documents provided to all bidders for this project; and failed to incorporate the rate schedule into contracts with the selected contractor.
As a further example of Dracut’s practices referred to in paragraph 40, above in 2018, Dracut failed to request a prevailing wage rate schedule from DLS prior to soliciting bids for the construction of Beaver Brook trail improvements; failed to incorporate the rate schedule into the bid documents provided to all bidders for this project; and failed to incorporate the rate schedule into contracts with the selected contractor.
As a further example of Dracut’s practices referred to in paragraph 40, above in 2018, Dracut failed to request a prevailing wage rate schedule from DLS prior to soliciting bids for the demolition work at 539 Nashua Road; failed to incorporate the rate schedule into the bid documents provided to all bidders for this project; and failed to incorporate the rate schedule into contracts with the selected contractor.
As a further example of Dracut’s practices referred to in paragraph 40, above, in 2019, Dracut failed to request a prevailing wage rate schedule from DLS prior to soliciting bids for the asbestos abatement at the police station; failed to incorporate the rate schedule into the bid documents provided to all bidders for this project; and failed to incorporate the rate schedule into contracts with the selected contractor.
As a further example of Dracut’s practices referred to in paragraph 40, above, in 2019, Dracut failed to request a prevailing wage rate schedule from DLS prior to soliciting bids for the demolition of the police station; failed to incorporate the rate schedule into the bid documents provided to all bidders for this project; and failed to incorporate the rate schedule into contracts with the selected contractor.
As a further example of Dracut’s practices referred to in paragraph 40, above, in 2019, Dracut failed to request a prevailing wage rate schedule from DLS prior to soliciting bids for the maintenance of the vehicle exhaust system at a fire station; failed to incorporate the rate schedule into the bid documents provided to all bidders for this project; and failed to incorporate the rate schedule into contracts with the selected contractor.
As a further example of Dracut’s practices referred to in paragraph 40, above, in 2019, Dracut failed to request a prevailing wage rate schedule from DLS prior to soliciting bids for emergency sewer work; failed to incorporate the rate schedule into the bid documents provided to all bidders for this project; and failed to incorporate the rate schedule into contracts with the selected contractor.
As a further example of Dracut’s practices referred to in paragraph 40, above, in 2019, Dracut failed to request a prevailing wage rate schedule from DLS prior to soliciting bids for the installation of a fence at the police station; failed to incorporate the rate schedule into the bid documents provided to all bidders for this project; and failed to incorporate the rate schedule into contracts with the selected contractor.
As a further example of Dracut’s practices referred to in paragraph 40, above, in 2019, Dracut failed to request a prevailing wage rate schedule from DLS prior to soliciting bids for the resurfacing of basketball courts; failed to incorporate the rate schedule into the bid documents provided to all bidders for this project; and failed to incorporate the rate schedule into contracts with the selected contractor.
As a further example of Dracut’s practices referred to in paragraph 40, above, in 2019, Dracut failed to request a prevailing wage rate schedule from DLS prior to soliciting bids for heating, ventilation and air conditioning maintenance work; failed to incorporate the rate schedule into the bid documents provided to all bidders for this project; and failed to incorporate the rate schedule into contracts with the selected contractor.
As a further example of Dracut’s practices referred to in paragraph 40, above, in 2019 and 2020, Dracut failed to request a prevailing wage rate schedule from DLS prior to soliciting bids for on-call electrical work; failed to incorporate the rate schedule into the bid documents provided to all bidders for this project; and failed to incorporate the rate schedule into contracts with the selected contractor.
As a further example of Dracut’s practices referred to in paragraph 40, above, in 2019 and 2020, Dracut failed to request a prevailing wage rate schedule from DLS prior to soliciting bids for emergency sewer work at the Kenwood Water Department; failed to incorporate the rate schedule into the bid documents provided to all bidders for this project; and failed to incorporate the rate schedule into contracts with the selected contractor.
As a further example of Dracut’s practices referred to in paragraph 40, above, in 2019 and 2020, Dracut failed to request a prevailing wage rate schedule from DLS prior to soliciting bids for on-call sewer service work; failed to incorporate the rate schedule into the bid documents provided to all bidders for this project; and failed to incorporate the rate schedule into contracts with the selected contractor.
As a further example of Dracut’s practices referred to in paragraph 40, above, in 2020, Dracut failed to request a prevailing wage rate schedule from DLS prior to soliciting bids for on-call oil burner maintenance work; failed to incorporate the rate schedule into the bid documents provided to all bidders for this project; and failed to incorporate the rate schedule into contracts with the selected contractor.
The Court found the Town in breach of the relevant statutory requirements, and confirmed that it would retain jurisdiction for the purposes of enabling the state government to enforce the out-of-court compliance settlement reached with the Town, including “enforcement of compliance therewith, punishment for violations thereof or relief therefrom.” As this case illustrates, in some jurisdictions, senior-level governments have the statutory power to enforce procurement compliance against non-compliant lower-level public institutions. This model serves as a useful example for other jurisdictions seeking effective top-down enforcement mechanisms to better ensure the procurement compliance of local government institutions.
