Opinion
No. CV08 402 34 48 S
April 21, 2008
MEMORANDUM OF DECISION
This is an application filed by an architectural firm, Fletcher-Thompson, Inc. (Fletcher-Thompson), seeking to enjoin the town of Trumbull from entering into a contract for the architectural and engineering services for a proposed seventy-three million dollar renovation project for the Trumbull High School. The plaintiff, in conjunction with another architectural firm, Silver Petrucelli and Associates (Silver Petrucelli), had submitted the lowest bid to the Trumbull High School Building Committee (Building Committee) in response to a Request For Proposals (RFP). The defendants initially filed a motion to dismiss claiming that the plaintiff, Fletcher-Thompson, as an unsuccessful bidder did not have standing to maintain the claim.
"Generally," "[a]n unsuccessful bidder to a municipal contract has available to him only very limited forms of standing." Lawrence Brunoli, Inc. v. Branford, 247 Conn. 407, 411, 722 A.2d 271 (1999). Specifically, "[o]nly where fraud, corruption or favoritism has influenced the conduct of the bidding officials or when the very object and integrity of the competitive bidding process is defeated by the conduct of municipal officials, does an unsuccessful bidder have standing to challenge the award." (Citations omitted; internal quotation marks omitted.) Id., 412. Moreover, "[a]n honest exercise of discretion by, a municipality which has reserved [the right to reject any and all bids] will not be disturbed by the court so long as its officials observe good faith and accord all bidders just consideration in accordance with the purpose of competitive bidding." Spiniello Construction Co. v. Manchester, 189 Conn. 539, 544, 456 A.2d 1199 (1983). "[E]lements traditionally thought to undermine the competitive bidding process . . . [include] the commissioner [or city] [applying] its requirement[s] inconsistently or in a discriminatory fashion . . . [or] acting in bad faith." Ardmare Construction Co. v. Freedman, 191 Conn. 497, 506, 467 A.2d 674 (1983)." Earth Technology, Inc. v. Skanska USA Building et. al., No. CV04 0287861-S, J.D. New Haven (January 10, 2005) (Tanzer, J.).
As an evidential hearing was required to determine the issue of standing, the hearing was expanded by stipulation to provide that the evidence for the motion to dismiss could be also considered by the Court in determining whether or not this plaintiff was entitled to a permanent injunction.
Based on the credible evidence submitted during the hearing, the Court reached the following conclusions.
In 2003 the Trumbull Town Council established the Trumbull High School Building Committee to supervise additions and renovations to the Trumbull High School. As part of their function in 2003 the Building Committee engaged the services of the architectural firm of Silver Petrucelli to construct a sixteen-room addition to the Trumbull High School. In 2003 the Town of Trumbull also engaged Silver Petrucelli to prepare a feasibility study for the Trumbull High School. The purpose of the study was to analyze current space and make recommendations for modifications to accommodate the future needs of the students. The study was concluded in March of 2007 and the estimated cost of the project entitled "Renovate As New" was approximately seventy-three million dollars with a design and construction phase spread out over a period of four years from 2007 to 2011.
Prior to July 1, 2007 municipalities were allowed to engage architectural firms as well as construction managers under a process known as Request For Qualifications (RFQ). Under that procedure, the municipality was not bound by the competitive bidding requirements provided for in Connecticut General Statutes 10-287(b). Under the RFQ municipalities sought qualifications from participating architectural firms and initially evaluated the firms based on qualification only. It was after the selection that the fee was subsequently determined.
In March of 2007, the Town Council approved the feasibility study of Silver Petrucelli and issued an RFQ through the Building Committee for architects to undertake the project In response to the RFQ several firms submitted a bid including Fletcher-Thompson and Silver Petrucelli.
The Building Committee interviewed the firms and maintained a score sheet of ten categories to evaluate the individual firms. Following that process, the list was reduced to three firms including Fletcher-Thompson. The firm of Silver Petrucelli was not one of the finalists. This selection process took place in July of 2007. That same month the legislature amended Connecticut General Statutes 10-287(b) to require that all contracts for school building construction receiving state assistance including contracts and orders for architectural and construction management firms had to be awarded under the lowest responsible qualified bidder after public invitation.
As a result of this revision for the bidding process, the Building Committee engaged the services of an attorney, Jeffrey D'Onofrio, who specialized in municipal construction projects as well as the municipal bidding process.
Attorney D'Onofrio initially assisted in the drafting of the required Request For Proposals (RFP) seeking an architectural firm to undertake the project. The RFP was published in the fall of 2007.
Although not a party to this application, Silver Petrucelli joined Fletcher-Thompson in submitting the bid which is the subject of this action. When the bids were open, the lowest bid was determined to be ineligible and therefore rejected. The Fletcher-Thompson/Silver Petrucelli bid was the lowest of the additional bids that were accepted. Attorney D'Onofrio suggested that the Committee bring in the two lowest bidders to clarify their bids and to undergo an interview process. This was the procedure that he had recommended to other municipalities he's represented in order to allow the process to continue should the first lowest bidder be determined to be unqualified. Based on his recommendations the firms of Fletcher-Thompson/Silver Petrucelli and another firm entitled JCJ/Wiles were invited to attend a meeting in December of 2007 to present their proposals.
The meeting was held by the Building Committee on December 5, 2007. After the Building Committee had interviewed both firms the attorney indicated the next phase should be the due diligence with regard to similar projects and reference checking. Certain individual members of the Building Committee volunteered to conduct follow-up investigations based on the references provided to the Building Committee in the bid package. The Building Committee members were given standardized questions by attorney D'Onofrio and were requested to call the references provided by Fletcher-Thompson/Silver Petrucelli in their proposal.
One of their references submitted by Silver Petrucelli was the sixteen-room addition to the Trumbull High School. Fletcher-Thompson listed the school design for Trumbull's Frenchtown School.
On December 17 the Building Committee met to discuss the initial bid of Fletcher-Thompson/Silver Petrucelli. At that meeting several concerns over prior projects were discussed. With respect to Frenchtown School, the water heater was the source of several problems. The Frenchtown School Building Committee had questioned the water trace heating system from the beginning of the project. The water heater had been oversized and originally fueled by oil. The facilities director questioned this and did not agree with oil as a fuel source for the water heater. The current head of the Board of Education facilities confirmed that there were concerns over the water heater for Frenchtown School with heat trace versus re-circulation system. The water at the school needed to warm up very quickly and the heat trace system does not allow for that. Specifically, the TLC section of the building's water temperature fluctuated from 105 to 115 degrees. The hot water tank became an issue itself as the mesh covering was incorrect and the water became very dirty during the summer. It was found that the top weighed over four hundred pounds and was welded. The top would have to be removed to have access to the turbulators to clean the tank. Compounding the problem there was opinions that the water tank was oversized and in an area too small for the professionals to lift the top off. The director of facilities indicated that at some point the tank would have to be replaced and in doing so would have to be cut up in order to be removed from the space. The Board of Education plumber indicated the cost of the trace system was $6,000.00 per year as opposed to $1,200.00 for a re-circulated system. The cost for replacing the trace system would be $107,000.00. The cost of replacing the tank was calculated to be $57,000.00 and the original Frenchtown Building Committee had gone on record with the town attorney that in their opinion the water tank had been improperly designed.
Mr. Steve Kennedy of the Board of Education Facilities office testified at the hearing that based on an energy usage study the Frenchtown School had the highest utility cost of any comparable school despite being the newest and state of the art. The committee was informed that the current Trumbull High School project of Silver Petrucelli had 160 change orders to date, which he equaled six percent of the original construction costs. They were advised that this is an exceptionally high amount and far in excess of the one to two percent rate for change orders that design professionals interviewed by the building committee previously had stated was their experience.
One of the Committee members indicated that the chairman of the Shelton High School Building Committee had stated there had been ten to twelve change orders for the project, there had been one design issue, the elevator was too big and some floor finishes were installed in the wrong place. Although the superintendent of schools in Shelton spoke favorably of working with Fletcher-Thompson he indicated he had some reservations and concerns.
With respect to the sixteen-room addition designed by Silver Petrucelli it was disclosed that a scheduled language lab had been omitted from the initial design and it was necessary to add it at a later stage of construction. As a result it had to be placed in a different location than originally planned as the concrete floor had already been poured. The lab was initially planned to be downstairs but due to the omission, it was required to be moved upstairs and is now located directly under an HVAC unit which will be problematic during taping sessions. The lab also had to be reconfigured due to the re-location resulting in a power issue. The house principal indicated the language lab's fiberoptic system was incorrect for the program and has been unresolved for one year. The missing laboratory resulted in an additional cost of $182,000. Information was received that offices displaced during the project had to be replaced and the Building Committee was left to design the replacement offices and felt uncomfortable in making those decisions without the support of the architect. There was a complaint that the technology portion power needs for the addition had not been met resulting in the use of power strips and extension cords.
Another source of criticism was the refusal of Silver Petrucelli to meet with the Board of Education representative on a regular basis. As a matter of courtesy, the project manager arranged to meet with the Board representative every week prior to classes starting and had invited the architect to also attend the meetings. To the contrary, the architect visited the site during the day when the Board of Education representative was unavailable and would only confer with the member when contacted by the project manager. One of the members spoke of the importance of an architect communicating with the building representatives, specifically the design rendering showing all of the equipment on or about the building. "The committee was reminded they were required to determine the lowest qualified responsible bidder. If the apparent low bidder was disqualified, the Building Committee would have to do the same reference checking on the next lowest bidder."
At the conclusion of the December 17, 2007 meeting a motion was made to recommend acceptance of the Fletcher-Thompson/Silver Petrucelli bid as the lowest qualified responsible bidder. The motion failed four to seven.
Following that vote the Committee was advised that they had to undertake the same process as they had undertaken with regard to Fletcher-Thompson/Silver Petrucelli, which meant that the questions prepared and provided to them to check references on Fletcher-Thompson/Silver Petrucelli would be used to check references on the next apparent low bidder, JCJ-Wiles which they did. At a subsequent meeting three of the four members of the Building Committee had divided up reference checks on JCJ-Wiles and each of them articulated what their due diligence had revealed. On January 9, the Building Committee approved the bid of JCJ-Wiles.
In their application the plaintiff claims that the town of Trumbull in refusing to designate Fletcher-Thompson as the lowest responsible bidder had acted improperly and unreasonable, arbitrary, capricious, unlawful in excess of its authority in that: "(a) it exhibited unlawful favoritism toward JCJ; (b) gave JCJ-Wiles an unfair competitive advantage over other bidders; (c) failed to award the contract to Fletcher-Thompson whose bid was the lowest responsible and qualified bid that was submitted; (d) and acted in violation of state and town laws regulating the award of design contracts the school building projects with state and town funds; and (e) its conduct defeated the very object and integrity of the competitive biding process in that it manipulated the contract award criteria in order to assure predetermined decision to award the contract to JCJ-Wells regardless of whether JCJ-Wells was the lowest responsible qualified bidder."
Although the complaint references favoritism and corruption with an agenda designed to award the contract to the second highest bidder, there was no evidence produced during the hearing with respect to any corruption or favoritism in the conduct of the Building Needs Committee nor any evidence that they acted in any way to provide an unfair advantage to a competitive bid or conduct themselves though the procedure in any different manner with respect to all the bids submitted. The only remaining claim was that the plaintiff raises various procedural and factual issues which they allege support their position summarily that the Building Commission should not have considered items presented in the December 17 meeting of 2007 and as such undermined the objectives and the integrity of the bidding process. This Court disagrees.
The first claim of the plaintiff is that "no where in the ITB for the project is there any criteria concerning specified energy use levels on prior school projects, nor is there any criteria concerning properly functioning oversized water tanks." If in fact this were a requirement in the competitive bidding system, every municipal building committee would have to list every potential component part of a building subject to design in its RFT for bidders who have yet to be identified and past projects that have yet to be listed as references.
With respect to the selection process, Fletcher-Thompson claims that the Building Committee received nothing but positive references for its past performance on projects that were the basis for the objective criteria set in the RFT. There was no evidence that they did not satisfy the objective criteria concerning prior experience, nor was there any evidence for the objective criteria that they have not been satisfied for keeping those projects within budget and on time. They further claim that a check of one of the schools completed produced no negative information. They further claim that the Committee should not have gone on to consider the design defects described during the December 17th meeting as they were minor in significance and purely subjective in nature.
It would appear the thrust of the plaintiff's claim is an assumption that the competitive bidding legislation was designed to protect the interest of the bidder and to limit any inquiry into the bidder's ability to perform on the basis of past projects.
"Municipal competitive bidding laws are enacted to guard against such evils as favoritism, fraud or corruption in the award of contacts, to secure the best product at the lowest price, and to benefit the taxpayers, not the bidders; they should be construed to accomplish these purposes fairly and reasonably with sole reference to the public interest. Austin v. Housing Authority, 143 Conn. 338, 345, 122 A.2d 399 (1956); 10 McQuillin, Municipal Corporations (3d Ed. Rev.) 29.29. "The better authority holds that lowest responsible bidder statutes are enacted solely for the benefit of the public and in no sense create any rights in those who submit bids. 10 McQuillin, Municipal Corporations (3d Ed.) 29.29." Austin v. Housing Authority, supra, 349.
A bid is a binding offer to make a contract. 10 McQuillin, op. Cit., 29.65. A bid, even the lowest responsible one, submitted in response to an invitation for bids is only an offer which, until accepted by the municipality, does not give rise to a contract between the parties. Joseph Rugo, Inc. v. Henson, 190 F.Sup. 281 (D.Conn. 1960); 10 McQuillin, op. Cit., 29.80. Furthermore, where the municipality reserves the right to reject any and all bids, no bidder can claim any contractual rights until he has been awarded the contract. 10 McQuillin, op. Cit., 29.77. Our law has evinced a strong policy favoring the right of a municipality to exercise its reserved right to reject all bids. John J. Brennan Construction Corporation v. Shelton, 187 Conn. 695 (1982), 448 A.2d 180.
With respect to the inquiry into past performance, which the plaintiffs are trying to limit, Connecticut General Statutes 10-287(a) requires that contracts of school building construction are required to be awarded "to the lowest, responsible qualified bidder." The statute in and of itself does not contain a definition of "lowest, responsible qualified bidder" but case law has developed several decisions which apply the definition to other statutes such as Connecticut General Statutes 4a-59(a). Connecticut Drywall Associates, Inc. et al. v. State of Connecticut Department of Education et al., CV 704232S, Superior Court at Hartford, (1993) (O'Neil, J.) [9 Conn. L. Rptr. 328], C.G.S. 4a-59 states:
Sec. 4a-59. (Formerly Sec. 4-114). Award of Contracts.
(a) As used in this section, (1) "lowest responsible qualified bidder: means the bidder whose bid is the lowest of those bidders possessing the skill, ability and integrity necessary to faithful performance of the work based on objective criteria considering past performance and financial responsibility.
The Statute continues, and defines further what is meant by a "consideration of past performance:"
In considering past performance of a bidder for the purpose of determining the "lowest responsible qualified bidder" the commissioner shall evaluate the skill, ability and integrity of the bidder in terms of the bidder's fulfillment of past contract obligations and the bidder's experience or lack of experience in delivering supplies, materials, equipment or contractual services of the size or amount for which bids have been solicited.
The same definition is used in other bid statutes, specifically, Connecticut General Statutes 4b-92 which states the identical language of 4a-59 with regard to the interpretation of the term "lowest, responsible qualified bidder." It states, "a builder's conduct under other contracts and the quality of previous work as well as financial ability is among the many factors that a public agency is entitled to review." Prete Enterprises v. Brainard, CV950374293, Judicial District of New Haven, (July 10, 1985) (Barnett, J.).
Another argument of the plaintiff is that the attorneys advising them as to the bid process failed to properly instruct them as to the definition of a responsible and qualified bidder, specifically that he failed to make a reference to the faithful performance of work based on object criteria concerning past performance and financial responsibility. As a result, the plaintiff alleges that the decision based on the design defects reported at the December 17th meeting was an arbitrary vote based on the members' conscience and subjective and individual opinions as to what they perceived as a qualified bidder.
"The gist of the plaintiff's claim as to DAS's exceeding its statutory authority is that statutes require adherence to objective criteria stated in the RFP. The procurement statutes are not, however, quite so narrowly written or construed. Section 4a-59(c)(3) of the General Statutes provides that contracts shall be awarded to the proposer whose proposal is deemed by the awarding authority to be the most advantageous to the state, in accordance with the criteria set forth in the request for proposals, including price and evaluation factors. In considering past performance of a bidder for the purpose of determining the "lowest responsible qualified bidder" or the "highest scoring bidder in multiple criteria bid," the commissioner shall evaluate the skill, ability and integrity of the bidder in terms of the bidder's fulfillment of past contract obligations . . ." (Emphasis added.) Also, § 41-59(d) provides that the commissioner may reject any bid if "in the opinion of the commissioner, the best interest of the state will be served thereby." It is difficult to see how statutory authority was on the basis of materials submitted in connection with the motion to dismiss. AAIS Corporation v. Department of Administrative Services, at CV04 0834566 Superior Court, judicial district of Hartford (October 13, 2004) (Beech, J.) 15381 [38 Conn. L. Rptr. 125].
It is the opinion of this court that the attorney engaged to assist the building committee through the bid process guided them in a thorough and impartial manner. He adequately advised them as to the impact of the newly passed statute, helped create the request for proposals, arranged for the selection and interview process of the accepted bids and would require that the same questions and process be utilized for any of the bidders they interviewed. It would have been improper for him to interfere with the discretionary decision process of the Committee.
The plaintiffs further allege that the number of design defects raised by the Committee during the meeting of December 17th were "completely minor in significance and purely subjective in nature." That opinion may well be expected from the recipient of the criticism raised at the December 17th meeting, but it was obviously not the opinion of the Committee itself.
"In considering past performance the awarding authority shall evaluate the skill, ability and integrity of bidders in terms of the bidder's fulfillment of contract obligation and of the bidder's experience or lack of experience with projects or the size of the projects which the bids were submitted" C.G.S. 49(b)-91.
There is no question in exercising its statutory obligation to determine whether the bidder is qualified and/or responsible, the Building Committee had to exercise its discretion evaluating the objective, tangible deficiencies reported in December with respect to design defects and components of buildings previously designed by the two firms for whom the responsibility of a seventy-three million dollar renovation project is to be awarded.
"Our bids are evaluated by objective criteria published by the department; see General Statutes § 4a-59(b); the department has the ability to waive minor defects in a proposal or to reject in whole a proposal in the event the department believes such action to be advantageous to the state. See General Statutes § 4a-59(b) and (d). Furthermore, in considering whether a bidder is the "lowest responsible qualified bidder," the department may consider, in addition to the objective criterion of price, the past performance of the bidder, which includes that bidder's skill, ability and integrity. General Statutes § 4a-59(c). The assessment of those criteria necessarily includes some subjective analysis by the department; that subjective analysis, however, does not carry with it the imprint of favoritism, but rather is a wholly permissible exercise of the department's discretion unless favoritism otherwise is illustrated." AAIS Corp. v. Department of Administrative Serv., 93 Conn.App. 327, 332 (2006).
As was indicated, there was no credible evidence submitted indicating that the Trumbull Building Committee varied its procedure for soliciting bids and evaluating bids for any of the prospective architects. There was no evidence except insinuation that there was any favoritism or corruption involved in the selection process.
One of the claims made by Mr. Silver of Silver Petrucelli was that he was instructed by the Board of Education representative not to include the language lab to the addition of the Trumbull High School referencing a notation of a meeting in 2005. As it developed, the notation by the Board of Education representative was with respect to upgrading an existing language lab classroom in the Trumbull High School and not the proposed classroom to be included in the sixteen-classroom addition. In fact, the Board of Education produced two emails dated January 2007, in which the Board of Education representative questioned Mr. Silver as to the omission of the language lab and Mr. Silver's reply was "we mislabeled the room." Finally, this claim was raised for the first time at this hearing, therefore it was not even an issue which the Building Committee could consider at the December 17, 2007 meeting.
The other claim by the plaintiff is "THSBC's manipulation of selection criteria did not stop after its brief sojourn into Frenchtown School. Rather, it manipulated the selection criteria by focusing on Silver Petrucelli's qualifications. It did so even though it was abundantly clear from Fletcher-Thompson's bid that Silver Petrucelli was a consultant and not a joint venture partner." The actual bid provides otherwise; the respective sections of the bid contain the following references to the participation of the two firms:
The cover of the bid proposal lists "Fletcher-Thompson and Silver Petrucelli as submitting the bid. Officers of each company were listed as Principals of the project."
(1) Letter of Transmittal Fletcher-Thompson and associated firm Silver Petrucelli and Associates are pleased to submit our proposal for architectural and engineering services for the Trumbull High School Renovation Project.
(2) Qualification Statement: there are two AIA qualification statements included, one for Fletcher-Thompson and one for Silver Petrucelli.
(3) Scope of Services: "Fletcher-Thompson/Silver Petrucelli recognize the value of an innovative and creative design solutions for our clients."
(4) Staffing Plan: "Fletcher-Thompson/Silver Petrucelli team will provide the town of Trumbull with a team of highly experienced professionals . ."
(5) Resumes: "All staffs identified to represent Fletcher-Thompson/Silver Petrucelli will be available when we are authorized to proceed . . ."
(6) Specialized Expertise: Fletcher-Thompson and Silver Petrucelli are members of the U.S. Green Building Council.
CT Page 6052
(7) Project Management: "Fletcher-Thompson/Silver Petrucelli team maintains a strong commitment to managing the costs of its projects through design process . . ."The Fletcher-Thompson/Silver Petrucelli team with its knowledge of its project and experience . . . will be able to complete this project within the four year schedule."
(8) Similar Projects/References: "Fletcher-Thompson and Silver Petrucelli have prepared studies and designs for more than a hundred schools . . ."
(9) Concepts Sketch. "The Fletcher-Thompson/Silver Petrucelli team prepared another concept sketch labeled as option B for this project, labeled as option B . . ."
Finally, the separate bid-price folder states "the Fletcher-Thompson/Silver Petrucelli team proposes a stipulated fee of: $2,495,390.00."
As a result of the unsuccessful bid, Fletcher-Thompson may wish to retroactively attempt to annul whatever relationship they may have had with Silver Petrucelli. However, they cannot erase the contents of their bid which is a representation to the Building Committee that the Fletcher-Thompson/Silver Petrucelli team was to jointly participate in the completion of the proposed project. Contrary to the claim of the plaintiff, the Building Committee not only had the right, but an obligation to the citizens of the town of Trumbull to evaluate the skill, ability and integrity of the principals responsible for the design of this seventy-three million dollar project.
"All that is required of officials is that they observe good faith and accord all bidders just consideration, thus avoiding favoritism and corruption. An honest exercise of discretion will generally not be disturbed. Courts will only intervene to prevent the rejection of a bid when the obvious purpose of the rejection is to defeat the object and integrity of competitive bidding." John J. Brennan Construction Co. v. Shelton, 187 Conn. 695, 703 (1982).
This Court concludes that based on the evidence submitted in this hearing, the Trumbull High School Building Committee exhibited an honest exercise of its discretion and their decision should not be disturbed. There has been no evidence of fraud, corruption, favoritism or acts undermining the objectivity and integrity of the bidding process. To the contrary, it is the opinion of this Court that rather than undermining the integrity of the bidding process, the Building Committee, in this instance, sought to preserve the integrity of that process.
The application for injunctive relief is denied and judgment may enter for the defendant.