Associated Subcontractors of Massachusetts, Inc. v. University of Massachusetts Building Authority

442 Mass. 159
CourtMassachusetts Supreme Judicial Court
DecidedJuly 7, 2004
StatusPublished
Cited by17 cases

This text of 442 Mass. 159 (Associated Subcontractors of Massachusetts, Inc. v. University of Massachusetts Building Authority) is published on Counsel Stack Legal Research, covering Massachusetts Supreme Judicial Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Associated Subcontractors of Massachusetts, Inc. v. University of Massachusetts Building Authority, 442 Mass. 159 (Mass. 2004).

Opinion

Marshall, C.J.

By statute, most public construction projects in the Commonwealth are subject to a statutory competitive bidding process. See G. L. c. 149, §§ 44A-44H (competitive bidding statute). There are, however, exceptions to the statutory bidding scheme, among them certain construction projects undertaken by the University of Massachusetts Building Authority (authority)3 that are financed with funds “from nongovernmental sources.” See St. 1960, c. 773, § 18, as appearing in St. 1998, c. 319, § 15 (exemption provision).4 This case requires us to construe for the first time the phrase “funds . . . from nongovernmental sources,” as used in the exemption provision.

The plaintiffs, subcontractors and an association of subcontractors, brought a declaratory judgment action in the Superior Court against the authority and the University of Massachusetts [161]*161(university). They claimed that the defendants undertook to construct a dormitory complex for the university in violation of the competitive bidding statute, in particular, G. L. c. 149, § 44F, mandating competitive bidding procedures for certain subcontracts for public construction projects. On cross motions for summary judgment, a judge in the Superior Court granted summary judgment for the defendants on the ground that the dormitory construction project fell within the exemption provision. We granted the plaintiffs’ application for direct appellate review. We now affirm.

1. Background. The facts are undisputed. The plaintiff subcontractors regularly bid on and perform subcontract construction work for public agencies. The defendant authority is a “public instrumentality” created by the Legislature in 1960 to provide the university with dormitories, dining commons, and other structures. See St. 1960, c. 773, §§ 2-3. See also St. 1960, c. 773, § 4 (authority may construct, acquire, lease, and maintain buildings, grounds, and parking areas of university). The authority’s activities are deemed “an essential governmental function.” St. 1960, c. 773, § 2.

The Legislature has empowered the authority to borrow funds and issue bonds and notes, St. 1960, c. 773, § 4 (g), and to “fix, revise and collect fees, rents, rates and other charges for the use of, a project financed or refinanced” by it. St. 1960, c. 773, § 9, as appearing in St. 1963, c. 864, § 11. The authority is required to pay the principal and interest on any bonds issued to fund a construction project the authority undertakes. Id. The authority may also contract with the Commonwealth “for state financial assistance in the form of a guaranty by the commonwealth. ’’5 St. 1960, c. 773, § 10.

In November, 2000, the university proposed, and the [162]*162Secretary of Administration and Finance approved, a project to construct a dormitory complex at the university’s Dartmouth campus, consisting of two residence halls to house 800 undergraduate and graduate students. To finance the project through the issuance of bonds and their guaranty by the Commonwealth, on December 1, 2000, the authority entered into an agreement, pursuant to St. 1960, c. 773, §§ 5 and 10, with the Commonwealth, and a separate agreement with a bond tmstee, State Street Bank and Trust Company, pursuant to St. 1960, c. 773, § 8, to secure the payment of all amounts to become due on the bonds. Together, the agreements obligated the authority to construct the dormitory complex and the university to collect student room and board fees that it would then transmit, at the authority’s direction, to the bond trustee for payment of the principal and interest on the bonds. On December 8, 2000, the authority adopted a bond resolution authorizing the issuance of facilities revenue bonds in the principal amount of $46,980,000 to finance the dormitory construction. See St. 1960, c. 773, § 7. On December 8, 2000, the authority also entered into an agreement with private investors to underwrite the bond issue.

Two weeks later, on December 21, 2000, the authority requested the Governor’s approval to bypass the requirements of the competitive bidding statute in favor of employing an alternative procurement method. See St. 1960, c. 773, § 18, as appearing in St. 1998, c. 319, § 15. In support of its request, the authority stated that not less than one-half of the project cost would be “financed by fees for room and board paid by University students,” thus bringing the project within the ambit of the exemption provision. See id. On February 13, 2001, the Governor approved the authority’s request, agreeing that the student room and board fees used to fund the construction were “funds . . . from nongovernmental sources” pursuant to the exemption provision. The authority then elected to build the [163]*163dormitory complex under a construction manager-at-risk contract.6 With this background, we turn to the plaintiffs’ case.

2. Standing. We first consider the defendants’ threshold challenge to the plaintiffs’ standing. The defendants claim that the authority’s enabling act provides no mechanism for contractors to sue the authority. Their argument overlooks that the provisions of the competitive bidding statute clearly apply to all nonexempt authority projects, and that private parties may bring suit to enforce the provisions of the competitive bidding statute. See G. L. c. 149, § 44H (describing enforcement mechanism); Norfolk Elec., Inc. v. Fall River Hous. Auth., 417 Mass. 207, 210-211 (1994) (in declaratory judgment action where parties have stipulated to facts, question one of law and matter public interest, which affects right of subcontractors beyond those involved in present controversy, court may exercise jurisdiction “despite a plaintiff’s failure to exhaust administrative remedies” of G. L. c. 149). While it is undisputed that none of the plaintiffs submitted proposals to the authority with respect to the construction project, we have long held that a subcontractor who has the right to be considered a subbidder on such a project has standing to challenge the award of a contract alleged to violate the statutory competitive bidding requirements. The plaintiffs “need not meet rigid ‘but for’ standing requirements by asserting that if there had been compliance with the statute, they certainly would have been awarded the contract.” Modern Cont. Constr. Co. v. Lowell, 391 Mass. 829, 835 (1984). For purposes of standing, they need only allege, as they have in this case, that they are persons or entities “who were illegally prevented” from becoming bidders. John T. Callahan & Sons v. Malden, 430 Mass. 124, 129 (1999), quoting Doric Bldg. Assocs. v. [164]*164Department of Labor & Indus., 27 Mass. App. Ct. 1175, 1177 (1989). See Norfolk Elec., Inc. v. Fall River Hous. Auth., supra at 208 n.2. “If the situation were otherwise, the important role played by individual bidders in securing compliance with the bidding statutes and legislative policy objectives would be diminished.” Modern Cont. Constr. Co. v. Lowell, supra at 836.

The association similarly has standing in this case because its members, the subcontractors, have standing to bring this suit, the issues are germane to the association’s purpose, and the claim is one for declaratory judgment. See Modified Motorcycle Ass’n of Mass. v. Commonwealth, 60 Mass. App. Ct. 83, 85 n.6 (2003), citing Hunt v. Washington State Apple Advertising Comm’n,

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442 Mass. 159, Counsel Stack Legal Research, https://law.counselstack.com/opinion/associated-subcontractors-of-massachusetts-inc-v-university-of-mass-2004.