M.G.L. c. 30B requires that contracts valued at more than $10,000 be awarded through either an invitation for bids or a request for proposals (RFP) process. The specific requirements for conducting such a formal competition are found in M.G.L. c. 30B, §§5 and 6, respectively. Section 5 sets out procedures for soliciting bids and awarding a contract to the lowest responsive and responsible bidder, while section 6 establishes a process for evaluating competing proposals using comparative criteria and price to select the most advantageous offer. Both of these sections require the solicitation to include a purchase description for the supplies or services sought and all evaluation criteria that will be used to determine the acceptability and suitability of proposed supplies or services, including standards for quality, workmanship, and results of inspections or tests.
A carefully drafted purchase description is a vital element of any M.G.L. c. 30B procurement. The purchase description must contain a detailed description of supplies needed, a clear description of the scope of services and work products required in a services contract, and enough information about the quantities needed, using either actual quantities or the best available estimates, to permit vendors to submit a firm price. The purchase description should also include the schedule for performance, delivery terms, warranty terms, and other required business terms of the procurement. A procurement can be successfully challenged by an aggrieved bidder (or by ten taxpayers) if the purchase description is not sufficiently detailed to enable vendors to submit bids on a common footing.
The purchase description as defined in M.G.L. c. 30B constitutes the specifications upon which the contract will be based. Adequate specifications for the contract are essential to fair competition. Massachusetts courts have delineated the standards that specifications must meet in a series of decisions interpreting various state and local procurement statutes; the principles set forth in these decisions apply to procurements undertaken under M.G.L. c. 30B, as well as to contracts awarded under other public bidding statutes.
An awarding authority must specify the quantity and quality of supplies or services needed with as much definiteness as practicable.
This basic principle -- the necessity of adequate specifications to permit fair competition -- was set out in Sweezey v. Mayor of Malden, 273 Mass. 536, (1931). In Sweezey, the City of Malden solicited bids pursuant to a local ordinance for a street paving contract. The Sweezey court found that the City did not comply with the ordinance because the City's specifications for the paving work failed to specify the required grade, quality, and type of material to be used and the manner in which the paving surface was to be laid. The Court invalidated the contract award, explaining that:
To permit each bidder to furnish his own specifications for the construction of the wearing surface might, and probably would, allow a substantial variance in the manner of construction and its cost. Such a manner of bidding would not result in bids being submitted on any common basis. Where, as here, each bidder is invited to bid upon his own specifications, it is plain that there can be no real competition between such bidders. Such an advertisement not only destroys competition, but gives city officials an opportunity to exercise favoritism in awarding contracts.
Id. at 542. To ensure genuine competition, "[t]he advertisement and the plans and specifications must state the quantity and quality of the work required with as much certainty and definiteness as may be practicable." Id. at 540.
An awarding authority may solicit bids on alternative specifications or on a job whose scope is bracketed within well-defined limits.
Another SJC decision, Devir v. Mayor of Malden, 277 Mass. 502 (1931), followed closely on the heels of Sweezey, and elaborated on the parameters of the requirement for detailed specifications. In Devir, another paving contract subject to the same bidding ordinance at issue in the Sweezey case was challenged on the basis of the City's use of indefinite specifications. In Devir, the City's specifications allowed bidders to bid alternatively on either or both of two different types of specified paving surfaces. In addition, bidders were instructed to submit bids on a per square yard basis and were informed that the City would award a contract to pave any one or more of four specified areas on four different streets. Bidders were free to bid on each of these streets separately or on any combination of the streets named.
The Devir decision upheld the contract award, noting that this manner of soliciting bids, which left open alternatives for the type of material and the amount of work, did not per se violate the requirement for fair competition on equal footing. Under the facts presented in this case, the Court found that the bidders had an adequate description of the two types of paving surface to permit them to prepare competitive unit prices. In addition, the bidders knew the number of square yards to be paved on each of the four streets, and the minimum and maximum amount of work to be performed, depending on the City's decision to pave one or all of the streets. The Court found that based on this information, each bidder had an equal opportunity to submit a competitive price.
An awarding authority may not use open-ended or "problem-oriented" specifications.
The inherent danger in using open-ended specifications was squarely addressed in a landmark Massachusetts procurement case, Datatrol , Inc. v. State Purchasing Agent, 379 Mass. 679 (1980). Datatrol dealt with a challenge to the award of a contract by the State Lottery Commission for a computer system pursuant to M.G.L. c. 7, §22, the statute governing the Commonwealth's procurement of supplies. It is noteworthy that the applicable statute consisted of one terse sentence requiring advertisement and the receipt of bids that contained no language requiring detailed specifications. Despite the sparse statutory language, the Datatrol court found that the Commission's RFP process violated the legal requirement for open competition because it failed to provide vendors with an adequate description of the desired computer system.
In Datatrol, the RFP used by the State Lottery Commission contained a description of the purposes of an On-Line Number Selection Lottery Processing System, the jobs the system would do, and the support services to be furnished by the bidder. The RFP did not contain detailed descriptions of many aspects of the system itself; instead, the specifications for the technical components of the proposed hardware and software were left open. The RFP also asked vendors to specify a proposed business arrangement for the procurement. The Commission characterized its RFP as a "problem oriented bid specification"; that is, it posed a general problem to be solved and asked bidders to supply the specifications for a system that would solve the problem.
The Datatrol decision makes it clear that this "problem-oriented" approach to procurement does not satisfy the requirement of fair and open competition for public contracts. Datatrol reaffirmed the Sweezey principle that specifications must be sufficiently specific to ensure that vendors are competing on a common footing. Noting that M.G.L. c. 7, §22 did not explicitly require award to the low bidder, the Court explained that the requirement for definite specifications is not dependent upon a statutory low bidder requirement. The rationale for the common footing requirement is not simply to make possible a mathematically precise comparison of bid prices, but also to ensure that proposals solicited through an RFP process can be meaningfully compared and evaluated on the basis of the specified evaluation criteria.
According to Datatrol, the point of the common footing requirement is not to ensure such definite specifications that all bidders are bidding on exactly the same thing. The requirement is designed to ensure meaningful, manageable comparison of competing offers. The Court reiterated the rule established in the Devir decision that an awarding authority may solicit bids on alternative specifications, or on a job whose scope is bracketed within well-defined limits, as long as the process ensures fair comparison.