John T. Callahan & Sons, Inc. v. City of Malden

713 N.E.2d 955, 430 Mass. 124, 1999 Mass. LEXIS 493
CourtMassachusetts Supreme Judicial Court
DecidedJuly 22, 1999
StatusPublished
Cited by37 cases

This text of 713 N.E.2d 955 (John T. Callahan & Sons, Inc. v. City of Malden) 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
John T. Callahan & Sons, Inc. v. City of Malden, 713 N.E.2d 955, 430 Mass. 124, 1999 Mass. LEXIS 493 (Mass. 1999).

Opinion

Marshall, J.

At issue in this case is whether the competitive bidding statute, G. L. c. 149, § 44, permits the city of Malden (city or Malden) to require all successful bidders on a public works project to sign a project labor agreement (PLA) as a condition of being awarded a contract.

The plaintiffs, seven nonunionized contractors who object to the requirement that they abide by the PLA negotiated between the city and numerous unions, filed suit in the Superior Court on November 19, 1997, claiming that Malden’s solicitation of bids and award of construction contracts for two public school building projects violated the competitive bidding statute, G. L. c. 149, §§ 44A-44E, 44G, and 44H, by requiring a successful bidder to sign the PLA. The plaintiffs sought declaratory and injunctive relief. On December 1, 1997, a judge in the Superior Court allowed the motion of the Building Trades Council of the Metropolitan District, AFL-CIO, to intervene as a defendant and denied the plaintiffs’ request for a preliminary injunction. On December 11, 1997, the plaintiffs filed an appeal in the Appeals Court from that order. The plaintiffs simultaneously filed a petition for interlocutory relief pursuant to G. L. c. 231, § 118, first par., see Ashford v. Massachusetts Bay Transp. Auth., 421 Mass. 563, 567-568 (1995), which a single justice of the Appeals Court denied without a hearing on January 13, 1998. We transferred the case here on our own motion. We conclude that the competitive bidding laws of this Commonwealth are not an absolute bar to project labor agreements in public construction contracts, and that in the circumstances of this case the judge [126]*126did not abuse his discretion in denying the plaintiffs preliminary injunctive relief.

1. Facts. Malden has undertaken a $100 million project to replace over a five-year period all of its kindergarten through sixth grade schools (the project). The city will close nine existing schools, demolish three of them, and build five new schools to serve all kindergarten through eighth grade students.3 In October, 1996, the city engaged O’Brien-Kreitzberg, Inc. (O’Brien), to be the construction program manager for the project. As part of its contract with the city, O’Brien analyzed the various construction and procurement methods available to enable Malden to complete the project on budget, on schedule, and with reduced long-term operation and maintenance costs. The PLA is a component of the construction and procurement method selected by Malden on the recommendation of O’Brien.

To that end, Malden negotiated the PLA with the Building and Construction Trades Council of the Metropolitan District, AFL-CIO, and the New England Council of Carpenters, AFL-CIO (unions).4 The PLA requires each contractor on the project to recognize the unions as the “sole and exclusive bargaining representative[s] of all craft employees” working on the project. A contractor may employ only employees referred through the union hiring halls. The PLA mandates that this referral system be operated in a manner that is nondiscriminatory to nonunion workers, consistent with Federal law. Wages are determined according to the Massachusetts Department of Labor and Industries prevailing wage schedule and shall remain consistent throughout the duration of the project. Contractors must contribute to established union employee benefit funds, and comply with uniform work schedules, holidays, work assignments, and overtime provisions as set out in the PLA. The PLA imposes a uniform dispute resolution system, and prohibits [127]*127strikes, picketing, work stoppages, slowdowns, lockouts, and any other disruptive activity during the life of the project.

After the city negotiated the PLA, the mayor presented it to the Malden municipal building committee (committee). The committee is charged with the over-all administration of the project, and is the awarding authority for the project’s construction contracts.5 On May 6, 1997, the committee approved by resolution the execution of the PLA. O’Brien, on behalf of the city, and the unions executed the PLA on June 27, 1997.

In the first phase of the project, Malden issued separate invitations to bid to general contractors for the construction of the first two schools, Beebe and Roosevelt Park, on October 20, 1997. Each invitation stated that the project was subject to the PLA, a copy of which was included in the bid documents.6 General Laws c. 149, § 44B (2), requires each bidder on a public works project to submit a bid security in an amount equal to five per cent of the value of its bid. Malden requires the successful low bidder on each project to sign the PLA, agreeing to be bound by its terms, as a condition of being awarded the contract. A refusal by a successful bidder to sign the PLA constitutes a refusal to execute the contract. Under the statute, a successful bidder who does not execute a contract forfeits its bid security in an amount equal to the difference between its bid and the bid of the ultimate contractor, up to the entire amount. G. L. c. 149, § 44B (3).

The plaintiffs are all nonunion, or open-shop, contractors who engage in a substantial amount of business in the public sector. Each alleges that it would have prepared and submitted bids for both projects but for the PLA.

2. The competitive bidding statute. General Laws c. 149, §§ 44A-44H, provide comprehensive and detailed requirements for public agencies that award building contracts costing more than $25,000. G. L. c. 149, § 44A (2). Section 44A (2) provides that contracts “shall be awarded to the lowest responsible and [128]*128eligible general bidder on the basis of competitive bids.” Section 44A (1) defines “responsible” as “demonstrably possessing the skill, ability and integrity necessary to faithfully perform the work called for by a particular contract, based upon a determination of competent workmanship and financial soundness.” G. L. c. 149, § 44A (1). To be “[e]ligible,” a bidder must meet certain statutory requirements and “certify that he is able to furnish labor that can work in harmony with all other elements of labor employed or to be employed on the work.” This latter provision is referred to as the “labor harmony clause.”

“We construe G. L. c. 149, §§ 44A-44[H], as we must, in the light of the legislative objectives which were served by its enactment so as to effectuate the purpose of the framers.” Interstate Eng’g Corp. v. Fitchburg, 367 Mass. 751, 757 (1975). The purpose of competitive bidding statutes is transparent: “to ensure that the awarding authority obtain the lowest price among responsible contractors” and “to establish an open and honest procedure for competition for public contracts.” Modern Cont. Constr. Co. v. Lowell, 391 Mass. 829, 840 (1984), citing James J. Welch & Co. v. Deputy Comm’r of Capital Planning & Operations, 387 Mass. 662, 666 (1982). There exist

“two fundamental, complementary legislative objectives underlying the competitive bidding statute. First, the statute enables the public contracting authority to obtain the lowest price for its work that the competition among responsible contractors can secure. . . . Second, the statute establishes an honest and open procedure for competition for public contracts and, in so doing, places all general contractors and subbidders on an equal footing in the competition to gain the contract.

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Bluebook (online)
713 N.E.2d 955, 430 Mass. 124, 1999 Mass. LEXIS 493, Counsel Stack Legal Research, https://law.counselstack.com/opinion/john-t-callahan-sons-inc-v-city-of-malden-mass-1999.