AGO 1990-016.

• Case Date: May 09, 1990
• Court: Connecticut

Connecticut Attorney General Opinions 1990. AGO 1990-016. May 9, 1990Opinion No. 1990-016Leo V. DonohueState of Connecticut Auditors of Public Accounts State Capitol 210 Capitol Avenue Hartford, Connecticut 06106 Henry J. Becker, Jr. State of Connecticut Auditors of Public Accounts State Capitol 210 Capitol Avenue Hartford, Connecticut 06106 Dear Messrs. Becker and Donahue: This is in reply to your letter asking whether the awarding of the Mid-Connecticut Project contract by the Connecticut Resources Recovery Authority (CRRA) to Combustion Engineering, Inc., complied with statutory requirements. While your question was presented as a request for a legal opinion of the Attorney General, the answer to your question required an extensive investigation by this office into the lengthy factual history of the CRRA award process for that contract. We have reviewed the minutes of CRRA's board of directors from April 27, 1976 through March 13, 1985 concerning the Mid-Connecticut project; the file and chronology you provided us; documents furnished by media sources; various inter-office memoranda and other correspondence, documents, memoranda and chronology provided by CRRA; pertinent court decisions, various press clippings and other materials. We have also interviewed the present President of CRRA, William R. Darcy, the present counsel, Glen A. Gross, and the two past CRRA presidents who participated in the contract procurement, Russell L. Brenneman and Michael C. Cawley. The work in assembling and examining this evidence spanning a period of almost nine years has taken considerable time. I. PRELIMINARY ISSUES The StatuteIn the context of your question the issue is whether open or competitive bidding requirements were followed. In 1987 we advised that open or competitive bidding for any construction contract over $25,000 was mandated by Conn. Gen. Stat. § 22a-266(b). Since then, however, this statute has been amended. It now provides that any CRRA contracts shall be made "on the same basis and subject to the same limitations and considerations applicable to municipal and regional resources recovery authorities pursuant to subsection (c) of section 7-273bb. . . ." The latter states that contracts "may be entered into on either a negotiated or an open-bid basis, and the authority in its discretion may select the type of contract it deems most prudent to utilize. . . ." Thus, open or competitive bidding for these contracts is no longer exclusively required. This change was made by P.A. 87-451, effective July 6, 1987. The contract in question however, was dated December 31, 1984, and ratified by CRRA on March 13, 1985, prior to this amendment. We will therefore review it in light of the statute then in effect, which required open or competitive bidding. The Contract and the Superior Court RulingThe next question is whether this was a construction contract subject to § 22a-266(b). The contract was for the "Design And Construction of a Resource Recovery Facility. . ." (emphasis added). Sec. 6.01 of the contract states: "The contractor shall construct the Facility" and "shall procure and/or furnish all services, labor, equipment and materials necessary to construct the Facility in its entirety. . . ." The contract defines construction, for the purpose of subcontracts, at least, as a contract "to build or erect any building, including site improvements, building mechanical and electrial systems. . . ." Contract, sec. 6.02, p.41, and Ex.H. Other services, however, were also to be performed. These included design of the facility and training of personnel to operate the power block and waste processing components. Contract, sec. 6.01, p.39. In our 1987 opinion we advised that because of its construction aspects, the contract was one for construction under § 22a-266(b), even if it also called for other services. 87 Conn. Op. Atty. Gen. 192 (1987). Since that opinion the Superior Court has ruled that a CRRA contract to design, construct, operate and maintain a resource recovery facility was a full service contract although "[a]dmittedly there was a construction component" to it. Connecticut Resources Recovery Authority v. Freedom of Information Commission, Super. Ct. No. 328720, Aug. 24, 1988, at 4-5, 16; appeal dismissed, 19 Conn. App. 489 (1989). The Court found that the contract was "properly bid under § 22a-268 and not as a construction contract under § 22a-266." Memorandum of Decision at 16. The appeal in that case was dismissed as moot because § 22a-266 had since been amended and because the person who had sought information about the contract was no longer a party. 19 Conn. App. at 494-95. The Superior Court decision is contrary to the Attorney General's opinion above. This opinion is entitled to substantial weight, but is not binding on the Court. Cairns v. Shugrue, 186 Conn. 300, 309 (1982). On the other hand, unreported trial court decisions, although given serious consideration, are not binding on other coordinate courts or higher courts. See Connecticut State Federation of Teachers v. Bd. of Ed. Members, 538 F.2d 471, 485 (2d Cir. 1976); Commission on Hospitals & Health Care v. Lakoff, 214 Conn. 321, 333 (1990). The ultimate issue in Connecticut Resources Recovery Authority was whether a contractor's proprietary information should have been made public, or whether it was "commercial or financial information given in confidence and not required by statute." Connecticut Resources Recovery Authority, at 14. It was not simply whether open or competitive bidding was required, although it would follow from the opinion that it was not required. Id. at 16. Furthermore, the opinion did not completely foreclose the operation of § 22a-266. "Even if § 22a-268 in fact incorporates that part of § 22a-266 which requires that CRRA projects be openly or competitively bid, § 22a-266 does not abrogate the express confidentiality provision of § 22a-268. If it did, the confidentiality provision would become meaningless." Id at 17. [Footnote omitted.] In addition, the Court did not address the legislative history or the differences in the Wisconsin legislation discussed in the Attorney General's opinion. Nor did it deal with the opinion itself. Nor does it indicate whether that the opinion was disclosed to the Court by CRRA or anyone else. It is also noted that the Mid-Connecticut contract at issue was narrower than the one in Connecticut Resources Recovery Authority. The latter included operation and maintenance, and not only design and construction. Id., p.4. Operation and maintenance in the present case were covered by other contracts. However, the Mid-Connecticut contract, like the one in Connecticut Resources Recovery Authority, did include design and construction. § 5.01. It also included training the operating personnel. Id., § 6.01. The fact that a court would nevertheless find that § 22a-266(b), the bidding statute for construction contracts, did not apply means that CRRA could also believe this to be the case. This is true even if the court decision was incorrect on this point. Because the court decision was not by the highest court and therefore not conclusive, however, and because of the other factors discussed, we have examined CRRA's files to determine whether the bidding requirements were in fact complied with. II. BASIC SEQUENCE OF EVENTS CRRA's Selection of a Procurement Approach On May 25, 1976, CRRA reviewed an evaluation of four firms which had submitted proposals for the combined Central/Capitol and South Central regions. These firms were Combustion Equipment Associates Inc./Occidental Petroleum (CEA), Combustion Engineering (CE) (to be distinguished from Combustion Equipment Associates), Wheelabrator/Frye (WF) and Carrier Corporation. CRRA minutes, May 25, 1976. All of these companies, except CEA, had been previously selected by representatives of the South Central Connecticut Region and CRRA for the South Central project. The CRRA decided on a general procurement approach in June 1977. The Staff Procurement Group (SPG), consisting of Mr. Brenneman1 and three other CRRA staff members, outlined four options. These were (1) reopening the procurement process completely; (2) accepting WF and CE as the approved contractors because of their prior approval in the New Haven and New Haven/Hartford combined projects and negotiating with both for the best deal; (3) selecting CE and negotiating only with it, "using (WF) as a 'back up' in the unlikely event that negotiations breakdown"; and (4) "a thorough in house search and, without advertising or formalities, narrow[ing] the field to however many we feel are qualified. (Perhaps four or five)." CRRA would then negotiate with those firms which had the best ideas on how to approach the problem. Procurement Memorandum #1, Interoffice Mem. by Mr. Brenneman, June 6, 1977, pp.1-4. The advantages and disadvantages of each option were listed. Option #1, reopening the process, would ensure nothing was overlooked but would also further delay the project and involve substantial consultant expense. Id., p.2. Option #2, negotiating with WF and CE, would be faster, relatively easily accomplished, and less expensive. It would use the analysis that had already occurred. However, "[t]his option would open the Authority to criticism for failure to consider all possible solutions and basing action today on decisions and information many months old." Id., p.3. The third option, negotiating...