Metcalf v. BSC Group, Inc. ( 2023 )

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SJC-13407
RUSSELL METCALF & another1 vs. BSC GROUP, INC., & others;2
DEPARTMENT OF TRANSPORTATION, third-party defendant.
Suffolk. May 3, 2023. - August 21, 2023.
Present: Budd, C.J., Gaziano, Lowy, Cypher, Kafker, Wendlandt,
& Georges, JJ.
Massachusetts Wage Act. Public Works, Wage determination.
Contract, For services. Labor, Public works, Wages.
Statute, Construction. Practice, Civil, Summary judgment.
Civil action commenced in the Superior Court Department on
September 14, 2017.
The case was heard by Christine M. Roach, J., on motions
for summary judgment.
The Supreme Judicial Court on its own initiative
transferred the case from the Appeals Court.
Kristie A. LaSalle (Lou Saban also present) for the
plaintiffs.
Jonathan C. Burwood for BSC Group, Inc., & others.
Kate Isley, Assistant Attorney General, for Department of
Transportation.
1 Steven Theurer.
2 BSC Companies, Inc.; and David Hayes.
2
Jon C. Cowen & Michael Robertson, for American Council of
Engineering Companies of Massachusetts, amicus curiae, submitted
a brief.
WENDLANDT, J. Like the idiomatic "square peg in a round
hole,"3 we conclude that the Prevailing Wage Act, G. L. c. 149,
§§ 26-27H (Prevailing Wage Act or Act), which governs contracts
for the construction of certain public works projects, does not
"fit" the two professional engineering services contracts at
issue in the present case. These professional services
contracts, which the third-party defendant, the Department of
Transportation (MassDOT), awarded to the defendants, BSC Group,
Inc., and BSC Companies, Inc. (collectively, together with the
companies' president, the defendant David Hayes, BSC), were
untethered to a particular public works construction project and
were awarded based on BSC's qualifications to provide expert
professional consulting services to MassDOT over the course of
years, consistent with or pursuant to G. L. c. 7C, § 58 (§ 58).
3 S. Smith, On the Conduct of the Understanding, Lecture IX,
in Elementary Sketches of Moral Philosophy, Delivered at the
Royal Institution, in the Years 1804, 1805 and 1806, at 109-110
(1850) ("If you choose to represent the various parts in life by
holes upon a table, of different shapes, -- some circular, some
triangular, some square, some oblong, -- and the persons acting
these parts by bits of wood of similar shapes, we shall
generally find that the triangular person has got into the
square hole, the oblong into the triangular, and a square person
has squeezed himself into the round hole").
3
Unlike contracts for public works construction projects
governed by the Act, these contracts were not competitively bid
and were not awarded to the lowest bidder; indeed, the
compensation MassDOT would pay for BSC's professional services
was not considered by MassDOT until after the agency had
selected BSC in view of its expertise. Rather than specifying
that BSC's employees would be paid at least a prevailing wage
determined by the Department of Labor Standards (DLS), as is
required for contracts covered by the Act, the BSC contracts --
the second of which expressly was issued pursuant to § 58 --
specified only the hourly rate and maximum total compensation
that MassDOT would pay to BSC, based on MassDOT's own
determination as to what was fair and reasonable in view of
BSC's credentials and experience.
Concluding that the contracts are not governed by the Act
and that BSC was not required to pay its employees a prevailing
wage pursuant to the contracts, we affirm the Superior Court
judge's grant of summary judgment in favor of BSC on the
4
Prevailing Wage Act claims of its former employees, the
plaintiffs, Russell Metcalf and Steven Theurer.4,5
1. Background. a. Facts. "The following facts are
either undisputed 'or viewed in the light most favorable to
. . . the party against [whom] summary judgment entered.'" HSBC
Bank USA, N.A. v. Morris, 490 Mass. 322, 323 (2022), quoting
Berry v. Commerce Ins. Co., 488 Mass. 633, 634 (2021).6
This case centers on two requests for responses (RFRs)
issued by MassDOT. MassDOT released the first in June 2011,
seeking proposals from prequalified professional services firms
to provide engineering field surveying services "on general
highway and bridge projects or as directed as needed," "under
the direction of the MassDOT Survey Supervisor" on an on-call
basis. The selected consultant also would share responsibility
with MassDOT employees for "general supervision of Survey Crews
assigned to construction operations." In connection with the
4 For the same reasons, we affirm the Superior Court judge's
grant of summary judgment in favor of the third-party defendant,
MassDOT, on BSC's third-party claims for indemnification and
unjust enrichment.
5 We acknowledge the amicus brief submitted by the American
Council of Engineering Companies of Massachusetts.
6 The parties have supplied a fully developed record on
summary judgment. Contrast Marsh v. Massachusetts Coastal R.R.,
492 Mass. 641, 643 (2023) (motion to dismiss stage).
5
RFR process, MassDOT did not ask the DLS7 to determine the
prevailing wage rates for the anticipated work; no prevailing
wage rate schedule was provided to firms responding to the RFR.
Responding firms were to submit their qualifications for
the work and were to be selected exclusively on that basis.8 The
firms were not asked to submit, and did not submit, information
regarding the financial aspects of their proposals, including
any proposed compensation to the firm or any proposed wage rates
for the firm's employees to perform the anticipated work. The
contracts thus could not be -- and were not -- awarded on a low-
bid basis.
7 The programs and responsibilities of the Department of
Labor Standards, prior to a reorganization of the Executive
Office of Labor and Workforce Development in 2011, were housed
in other divisions. See Lighthouse Masonry, Inc. v. Division of
Administrative Law Appeals, 466 Mass. 692, 693 n.3 (2013). For
convenience, we use "DLS" when referring to these other
divisions prior to the 2011 reorganization.
8 Responses were to include the "qualifications of [the]
[pro]spective consultant's personnel," "experience on similar
projects," and "general understanding of the scope of services,"
along with a list of references, a list of potential conflicts,
an approved affirmative action certificate, evidence of
prequalification, audit data, and a brief statement as to
insurance and risk management. Responses would be evaluated and
scored on the basis of personnel, equipment, experience in
performing similar work, demonstrated understanding of the scope
of services and completeness of responses to the RFR,
performance on previous municipal or governmental contracts
(including references), and capacity to work within the outlined
areas.
6
Following presentation of BSC's qualifications, MassDOT
selected BSC to provide the requested specialized consultant
services to the agency; the financial terms of the deal,
including proposed compensation rates to be paid to BSC, were
negotiated thereafter, based on a consideration of BSC's
qualifications and MassDOT's determination of reasonableness and
fairness.9 The parties then executed the first contract, which
governed their relationship from 2012 to 2014.10
In June 2014, before the end of the first contract, MassDOT
released the second RFR, seeking proposals from prequalified
firms to provide essentially the same type of engineering field
surveying services as sought under the first RFR. The process
was, in all relevant respects, the same. As with the first RFR,
MassDOT did not ask DLS for a prevailing wage schedule, and none
was provided to firms responding to the RFR. Again, MassDOT
selected BSC for the work based on its qualifications,
negotiating BSC's compensation thereafter following the same
process. The parties then executed the second contract, which
governed their relationship from 2015 to 2017.
9 BSC provided MassDOT with its rates of pay for employees
to be assigned to the contract, and MassDOT calculated the price
it determined was reasonable and fair to pay BSC by adding "a
blended rate of pay per type of employee to an audited overhead
rate calculated for BSC by MassDOT."
10The original contract, which ran until 2013, was extended
through 2014.
7
Neither contract specified that the services were to be
rendered in connection with a particular public works
construction project; instead, BSC agreed to provide its
engineering field surveying services on "general highway and
bridge projects or as directed as needed" in "District Three"
over a period of years.11 The contracts did not set forth a
prevailing wage schedule and did not include an agreement by BSC
to pay its employees based on prevailing wage rates determined
by DLS; instead, the contracts specified hourly rates, and the
maximum total compensation, that MassDOT would pay to BSC for
its engineering field surveying services. No provision
prescribed the wage amount that BSC was to pay to its
employees.12
Pursuant to the contracts, BSC provided two- and three-
person crews of professional engineering field surveyors
directly to MassDOT to perform field surveying services on
various public works projects as directed by MassDOT -- one such
crew comprised the plaintiffs, Metcalf and Theurer.13 The
11District Three comprises towns and cities in western
Middlesex and Worcester counties.
12Rather than setting forth a minimum wage for BSC's
employees, the contracts set limits on labor costs on a not-to-
exceed basis. These limits were also set forth in sample
contract provisions attached to the RFRs.
13From January 2012 through June 2017, BSC employed Metcalf
as a survey party crew chief. From April 2013 through
8
plaintiffs performed engineering field surveying services on
about thirty bridge- and roadway-construction projects in
District Three.
While the plaintiffs "worked under MassDOT's supervision,
they often performed surveys requested by the on-site general
contractor," after receiving MassDOT's "approv[al]," and their
work "directly aided in the construction process." According to
one of their MassDOT supervisors, the plaintiffs' role at many
project sites was "[t]o support construction operations with
construction layout." Field surveyors employed by contractors
at some of these project sites were paid prevailing wages, as
set by DLS, for performing the same or similar work.14
b. Procedural history. The plaintiffs filed an amended
complaint against BSC, alleging that it violated the Prevailing
Wage Act by paying them less than the prevailing wage for the
work they performed. BSC filed a third-party complaint against
MassDOT, essentially seeking indemnification should BSC be held
liable to the plaintiffs under the Act. A Superior Court judge
granted summary judgment in favor of BSC and MassDOT, on the
December 2016, BSC employed Theurer as a survey instrument
operator.
14After Theurer resigned from BSC, he worked for another
company, earning a prevailing wage for performing "the same
exact work" he had performed for BSC on one of the same
projects.
9
ground that BSC was not liable under the Prevailing Wage Act
because MassDOT neither sought a prevailing wage rate
determination from DLS nor incorporated a prevailing wage rate
schedule into the contracts.15
2. Discussion. a. Standard of review. "Our review of a
decision on a motion for summary judgment is de novo." HSBC
Bank USA, N.A., 490 Mass. at 326, quoting Berry, 488 Mass. at
636. Viewing "the evidence in the light most favorable to the
party against whom summary judgment entered," HSBC Bank USA,
N.A., supra at 326-327, "[s]ummary judgment is appropriate where
there is no material issue of fact in dispute and the moving
party is entitled to judgment as a matter of law." Id. at 326.
"An appellate court may affirm a correct result based on reasons
that are different from those articulated by the judge below."
Clair v. Clair, 464 Mass. 205, 214 (2013).
Where, as here, we are called to construe the terms of a
statute and its applicability, we begin with the statute's plain
language. See Patel v. 7-Eleven, Inc., 489 Mass. 356, 362
(2022), quoting Tze-Kit Mui v Massachusetts Port Auth., 478
Mass. 710, 712 (2018) ("our analysis begins with 'the principal
source of insight into legislative intent' -- the plain language
The judge did not reach the alternate argument raised by
15
the parties that the Prevailing Wage Act did not apply to the
professional services contracts, which instead were subject to
the provisions of § 58.
10
of the statute"). "[C]ourts must look to the statutory scheme
as a whole . . . so as to produce an internal consistency within
the statute" (citation and quotation omitted). Plymouth
Retirement Bd. v. Contributory Retirement Appeal Bd., 483 Mass.
600, 605 (2019). Our aim when construing a statute is to
construe it "in harmony with prior enactments to give rise to a
consistent body of law," if possible. Alves's Case, 451 Mass.
171, 178 (2008), quoting Hadley v. Amherst, 372 Mass. 46, 51
(1977). We give deference to agency interpretations in areas
where the Legislature has delegated decision-making authority to
the agency when the "interpretation is not contrary to the plain
language of the statutes or their underlying purposes."
Mullally v. Waste Mgt. of Mass., Inc., 452 Mass. 526, 533 (2008)
(opinion letter issued by DLS's predecessor was entitled to
deference).
b. Contract for professional services. There can be no
doubt that the two RFRs and subsequent contracts were issued
consistent with or expressly pursuant to the procedures set
forth in § 58. Section 58, which was enacted and became
effective during the term of the first contract, sets forth the
procedures by which certain State agencies, including MassDOT,
are to procure "architectural, engineering[,] or related
professional services," defined to include, as relevant to the
present case, "land surveying" professional services that are
11
"required to be performed or approved by a person licensed,
registered[,] or certified to provide such services," and other
professional services of an architectural or engineering nature
or "incidental services, which members of the related
professions . . . may logically or justifiably perform,"
including "construction phase services." G. L. c. 7C, § 58 (a).
Section 58 delineates that the agency seeking such services
must publish, as MassDOT did in connection with each RFR, a
bulletin requesting that interested firms16 "submit a statement
of qualifications," and then select the firm "on the basis of
qualifications for the type of professional services required."
G. L. c. 7C, § 58 (c)-(e). As required by § 58, MassDOT
solicited pricing information "to determine consultant
compensation only after the agency . . . selected a firm and
initiated negotiations with the selected firm" (emphasis added).
G. L. c. 7C, § 58 (e) (1). And as also required by § 58,
MassDOT "negotiate[d] conditions including, but not limited to,
compensation level" payable to BSC and that MassDOT, in its sole
discretion determined to be "reasonable and fair . . . tak[ing]
into account the estimated value of the services to be rendered
16"Firm" under § 58 includes an entity "authorized by law
to practice the profession[] of . . . land surveying." G. L.
c. 7C, § 58 (a).
12
and the scope, complexity[,] and professional nature thereof."
G. L. c. 7C, § 58 (f) (1).
The plaintiffs do not dispute that the second contract
specifically was issued pursuant to § 58; nor do they
meaningfully claim that the first contract was different in
scope or procured in a different manner.17 Instead, the
plaintiffs contend that because they performed jobs identical to
those performed by "laborers in the construction of public
works," see G. L. c. 149, § 26,18 BSC's § 58 contracts with
MassDOT are governed by the Prevailing Wage Act. We disagree.
By its plain terms, the Prevailing Wage Act applies to "a
contract for the construction of public works." G. L. c. 149,
§ 27. See Construction Indus. of Mass. v. Commissioner of Labor
& Indus., 406 Mass. 162, 170 (1989) ("The scheme of G. L.
c. 149, § 27, quite clearly requires that the commissioner set
wage rates for each public works job. Any time that any public
official or public agency plans to award a public works
contract, the commissioner will set the wage rates applicable to
17MassDOT contends, and the plaintiffs do not dispute, that
it has been MassDOT's long-standing practice to hire consultants
through professional services contracts based on their
qualifications, including prior to the enactment of § 58.
18General Laws c. 149, § 26, provides that "[t]he rate per
hour of the wages paid to . . . laborers in the construction of
public works shall not be less than the rate or rates of wages
to be determined by the commissioner [of DLS] as hereinafter
provided."
13
that project"). By contrast, the BSC contracts were untethered
to a specific public works construction project, specifying only
that the professional engineering field surveying services would
be provided on "general highway and bridge projects or as
directed as needed" in "District Three" over a period of years.
More importantly, the Legislature set forth a procedure for
the selection of firms to provide professional services to
agencies, like MassDOT, under § 58 that is incompatible with the
procedures under the Prevailing Wage Act. Under the latter,
"[p]rior to awarding a contract for the construction of public
works," the public official responsible for causing the public
works to be constructed must provide to DLS a list of the
specific jobs to be employed on the construction project; in
turn, DLS then sets the prevailing wage rate for each job based
on market conditions, and the agency attaches the resulting
schedule to its call for bids. G. L. c. 149, § 27.
Public works construction contracts covered by the Act are
publicly advertised and generally are awarded to the lowest
bidder. See G. L. c. 30, § 39M (a) (contracts for construction
of public works "shall be awarded to the lowest eligible
responsible bidder on the basis of competitive bids"). See also
Associated Subcontractors of Mass., Inc. v. University of Mass.
Bldg. Auth., 442 Mass. 159, 160 (2004) ("By statute, most public
construction projects in the Commonwealth are subject to a
14
statutory competitive bidding process"). Because of the
pressure inherent in a low bid contest and the attendant
incentive to pay employees less than market wages in order to
submit the lowest bid, the Act requires that contractors bidding
on a public works construction project be provided with the
prevailing wage rate schedule prior to submitting their bids.
The Act further ensures that the contractors use the
schedule in submitting their budget proposals by holding them
liable to pay their employees according to the prevailing wage
rates.19 In this manner, "[t]he Act is designed to avoid
rewarding a contractor that submits an artificially low bid on
public works projects by paying its employees less than the
prevailing wage." Marsh v. Massachusetts Coastal R.R., 492
Mass. 641, 642 (2023). See Donis v. American Waste Servs., LLC,
485 Mass. 257, 263-364 (2020), quoting Mullally, 452 Mass. at
533 (Act "prevents a contractor from 'offer[ing] its services
19The plaintiffs' contention that the determination whether
the Act applies involves a retrospective, fact-intensive inquiry
into the work performed by each employee is unworkable as a
practical matter and unsupported by the Act, which anticipates
prevailing wage rates to be set "[p]rior" to the award of the
contract at issue and that contractors will use those rates in
determining the labor costs portion of their proposed bids.
G. L. c. 149, § 27. See In re: Wage Determination Appeal;
Central Artery/Tunnel Project; Engineering Field Survey Services
Contract (MO25V), at 8 (Dep't of Labor & Indus. July 11, 1995)
("Based on the nature and purpose of the work to be performed
under the Survey Contract, the individuals to be employed
thereunder will not be engaged 'in the construction of public
works'" [emphasis added]).
15
[to the Commonwealth] for less than what is customarily charged
by its competitors for nonpublic works contracts'"). Indeed,
the Commonwealth, by ensuring that the low bid contractor's
proposal includes labor costs calculated using the prevailing
wage, itself pays a premium to ensure that laborers on the
Commonwealth's public construction projects are paid the
prevailing wage. See Marsh, supra at 653.
By contrast, professional services firms under § 58 are
selected by the agency based on the qualifications of the
firms.20 The firms submit proposals that delineate the firms'
expertise and experience; no information about costs is required
or considered by the agency in its selection process. See G. L.
c. 7C, § 58 (e) (1) ("An agency may solicit or use pricing
policies and proposals or other pricing information to determine
consultant compensation only after the agency has selected a
firm and initiated negotiations with the selected firm").
Rather than having DLS set prevailing wage rates "[p]rior to
awarding a contract," G. L. c. 149, § 27, § 58 requires
20See G. L. c. 7C, § 58 (d) ("An agency shall evaluate the
firms submitting statements of qualifications, taking into
account qualifications, letters of interest and technical
proposals, and the agency may consider, but shall not be limited
to, considering, ability of professional personnel, past record
and experience, performance data on file, willingness to meet
time requirements, location, workload of the firm and any other
qualifications based on factors that the agency may determine in
writing are applicable").
16
agencies, like MassDOT, to select professional services firms
solely on the basis of their qualifications, without any "formal
or informal submission of verbal or written estimates of costs
or proposals in terms of dollars, hours required, percentage of
construction cost or any other measure of compensation." G. L.
c. 7C, § 58 (d).
After a firm is selected based on its qualifications, the
agency determines the costs it will pay to this most qualified
firm based on the agency's sole determination of reasonableness
and fairness. See G. L. c. 7C, § 58 (f) (1). Section 58 does
not require that wages for the firm's employees be set forth in,
appended to, or included by reference in the resulting contract.
That the Legislature crafted the § 58 procedures to be
incompatible with the Prevailing Wage Act procedures thus
buttresses our conclusion that these types of contracts are not
governed by the Act. Indeed, § 58 contracts, because they are
not awarded on a low-bid basis, do not trigger the same
legislative concern that drives the Prevailing Wage Act. See
Marsh, 492 Mass. at 646-648.
The plaintiffs suggest reading § 58 and the Act to require
an agency to select a professional services firm based upon its
qualifications and then to use prevailing wage rates to
determine the firm's compensation. This construction is
unsupported by the aforementioned process set forth in the Act.
17
Indeed, as discussed supra, § 58 allows the agency to determine
the amount it is willing to pay the consultant based on its (not
DLS's) determination, in its sole discretion as to what is
reasonable and fair; nothing in § 58 discusses the minimum wages
the consultant must pay to its employees or permits a consultant
to pass any prevailing wage obligation along to the
Commonwealth. Given these divergent statutory schemes, the
plaintiffs' reading is unsupported.
Thus, while field surveying work performed under a contract
for the construction of a public works project requires payment
of a prevailing wage,21 such work, when performed under a
contract for professional services, does not. As DLS has
concluded, "it is often the case that the prevailing wage
requirements will apply to only one of two employees performing
similar or identical tasks yet working under different types of
contracts" (emphasis added). In re: Wage Determination Appeal;
Central Artery/Tunnel Project; Engineering Field Survey Services
Contract (MO25V), at 13 (Dep't of Labor & Indus. July 11, 1995).
21The "long-standing administrative interpretation" of DLS,
as summarized in a 2011 opinion letter, "reflects that the work
of field engineers (surveying) performed under construction
contracts let by awarding authorities in the Commonwealth is
'construction work' within the meaning of [G. L.] c. 149,
§ 27D[,] and, therefore, is subject to the prevailing wage law"
(emphasis added).
18
The plaintiffs were not entitled to a prevailing wage for their
work under the professional services contracts.22,23
Judgments affirmed.
22For this reason, we also affirm the grant of summary
judgment in MassDOT's favor on BSC's third-party claims.
23Because nothing in the record supports the plaintiffs'
thinly veiled suggestion that MassDOT colluded with BSC to avoid
paying employees a prevailing wage, we need not reach the
plaintiffs' posited scenario. And because we conclude that the
contracts were not governed by the Prevailing Wage Act, we do
not reach the question whether, if the Act governed the
contracts, BSC would be liable, even though MassDOT did not ask
DLS to set a prevailing wage rate and did not include a
prevailing wage rate schedule in the contracts.