A broad discretion in the selection among bidders is included within a reasonable construction of the statute as to ‘responsible’ bidders. The word ‘responsible’ is not limited to the meaning of pecuniary liability or responsibility, but includes as well skill, experience, and integrity...”  – Colorado Court of Appeals

This language was penned the year the federal income tax was signed into law, stainless steel was invented, the British House of Commons rejected a woman’s right to vote, and Confederate veterans reenacted Pickett’s Charge at the Great Reunion … 1913.

Contractor responsibility is a bedrock legacy in public procurement. This past year, two cases showed how issues of responsibility have evolved.

How Does Prequalification Affect Responsibility Determinations?

Contractor responsibility typically is determined at the time of contract award. Does a prequalification process preclude an awarding entity’s conducting additional responsibility investigations? In Massachusetts, the answer is no. [Barr Inc. v. Town of Holliston, 967 N.E.2d 106 (Mass. 2012)]

Barr bid on a project in the town of Holliston: the construction of a new police station. In Massachusetts, the commonwealth’s Department of Capital Asset Management (DCAM) had policy-making authority with respect to some construction by local governments. DCAM used a contractor certification process that looked at representative samples of a contractor’s public sector projects. The process considered experience in the various trades – e.g. masonry, plumbing, electrical and roofing – that the contractor expected to perform.

Barr had been certified by DCAM and was eligible to bid on Holliston’s project. Barr was the low bidder. The town, however, uncovered unfavorable information about Barr’s past performance. The town asked a detective in its police department to conduct an investigation. Eventually, the town determined that Barr was not responsible and awarded the contract to the next lowest bidder. Barr sued and sought injunctive relief, claiming that the town had acted arbitrarily and capriciously.

The court rejected arguments that the comprehensive contractor certification process precluded independent investigations related to contractor responsibility. The court noted that while DCAM controlled the certification process, municipalities ultimately made the award decision. The court found no statutory prohibition on the independent investigation and held that an awarding authority may consider additional information bearing on a bidder’s responsibility outside that contained in DCAM’s bidder certification records.

The holding is consistent with others I have seen in my practice. In a sense, the certification or prequalification serves as a filter, usually to ensure that the contractor – or in some cases subcontractors – have requisite experience in the construction trades or projects they are undertaking.

The court ruled that despite comprehensive systems to winnow out unqualified bidders, there still is room for investigation and responsibility determinations up until the time of award. A Washington court considered contractor responsibility from a different perspective:  How are matters of responsibility related to responsiveness and contract formation?

Do Responsibility and Responsiveness Intersect?

If there is one case to talk about with your counsel, Washington’s Skyline Contractors is it. The case has elements of contract law (formation), availability of injunctive relief versus monetary damages, and entitlement to attorney fees. [Skyline Contractors, Inc. v. Spokane Housing Authority, 289 P.3d 690 (Wash. Ct. App. 2012)] The case involves issues of both responsibility and responsiveness.

In February 2010, the Spokane Housing Authority issued an invitation for bids for a federally-funded project to furnish and install windows in homes. The invitation for bid (IFB) required window installers to have a minimum of five years of documented experience. Skyline – who had been incorporated as a business for only three years – submitted a timely bid, but the housing authority did not consider Skyline a responsible bidder because the company did not satisfy the experience requirement. Skyline protested. Skyline pointed out that its bid identified a subcontractor with 20+ years of window installation experience. The Authority canceled the original award and granted Skyline’s request for reevaluation.