Awl Indus., Inc. v Triborough Bridge & Tunnel Auth NY Slip Op 30737(U) December 11, 2006 Supreme Court, New York County Docket Number:

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1 Awl Indus., Inc. v Triborough Bridge & Tunnel Auth NY Slip Op 30737(U) December 11, 2006 Supreme Court, New York County Docket Number: /06 Judge: Karen S. Smith Cases posted with a "30000" identifier, i.e., 2013 NY Slip Op 30001(U), are republished from various state and local government websites. These include the New York State Unified Court System's E-Courts Service, and the Bronx County Clerk's office. This opinion is uncorrected and not selected for official publication.

2 [* 1] SUPREME COURT OF THE STATE OF NEARK COUNTY OF NEW YORK: PART X AWL INDUSTRIES, INC., -against- Petitioner, Index no.: Motion seq.: Motion date: / /13/06 TRIBOROUGH BRIDGE AND TIJNNEL AUTHORlTY and ALPS MECHANICAL, INC., DECISION AND ORDER Respondent ~ }{ PRESENT: KAREN S. SMITH, J.S.C.: The instant Article 78 petition is granted, as more fully provided below. Petitioner AWL Industries, Inc. {AWL) brings this Article 78 proceeding to rescind and annul the award by respondent Triborough Bridge and Tunnel Authority (TBTA) of Contract 05-MNT-2742 (Contract) to co-respondent Alps Mechanical Inc. (Alps), and to enjoin respondents from taking any actions in furtherance of the Contract. AWL contends that Alps's bid documents failed to comply with the requirements set forth in the TBTA's Request for Proposal (RFP). The Contract is for the maintenance and repair of heating, ventilation, and air-conditioning systems at various TBTA facilities. Petitioner contends that the TBTA amended its contract requirements in order to award the Contract to Alps, in violation of General Municipal Law (GML) 103 and eublic Authorities Law (PAL) Neither of these statutes is applicable to the TBTA. Article 5-A of the GML governs the award of contracts for work and 1 Oof

3 [* 2] purchases, to which "political -divisions [and or] district[s] therein [are) a party. 11 GML 100-a. GML 100 ( 1) defines "political subdivi~ion" as "a municipal corporation, school district, district corporation and board of cooperative educational services." GML 2, in turn, defines "municipal corporation" as including "only a county, town, city and village." Pursuant to PAL 552, the TBTA is "a public benefit corporation." Consequently, the TBTA is not a municipal corporation, or, accordingly, a political subdivision (or a district therein), and Article 5-A of the GML is inapplicable to its award of contracts. See Opns. NYS Comp., 1988 No ; ~ Bender v Jamaica Hosp., 40 NY2d 560 (1976) (GML 50-d and 50-e inapplicable to New York City Health and Hospitals Corporation); Hassan v Woodhull Hosp. & Med. Cntr., 282 AD2d 709 (2d Dept 2001) (same). Petitioner cites PAL 1209 (1) to the effect that a public authority must award contracts for public work "to the lowest responsible bidder," and argues that, inasmuch as Alps' s bid failed to comply with the RFP, Alps was not a "responsible" bidder. PAL 1209, like the whole of PAL, Article 5, applies solely to the New York City Transit Authority. Contrary to petitioner's assertions, the award of the Contract is governed by PAL 559 and PAL 559 provides that the TBTA "shall do all construction pursuant to a contract or contracts in the manner, so far as practicable, provided in the charter of [New York City] for contracts of such city..," and New York City Charter 313 (6) (2) provides that the City's procurement 2

4 [* 3]. contracts are to be awarded on ee basis of competitive sealed bidding, and provides that "(t]he agency letting the contract... shall... award the contract to the lowest responsible bidder.. " {Emphasis added). PAL 2879 {1) requires every public authority and every public benefit corporation to 11 adopt... comprehensive guidelines which detail [its) operative policy and instructions regarding the... awarding... of procurement contracts. 11 Such guidelines are to include "[r)equirements regarding the selection of contractors, which shall include provisions for the selection of such contractors on a competitive basis, and provisions relating to the circumstances under which the board may by resolution waive competition." PAL 2879 (3) (6) (1). The TBTA's guidelines, Procedure No. P&M-250 (P&M 250), appear as Exhibit 4A to the TBTA's verified answer. Insofar as is relevant here, P&M 250 requires the TBTA Procurement Division to assure that "the proposer to be awarded a contract under the process described in this Procedure is deemed 'responsible' in accordance with the All-Agency Responsibility Guidelines (Responsibility Guidelines)." P&M 250, '.ll RCNY 2-08 (a) (1) provides that City "purchases shall be made from, and contracts shall be awarded to, responsible prospective contractors only." 9 RCNY 2-08 (b) provides that "[a] responsible contractor is one which has the capability in all respects to perform fully the contract requirements and the business integrity to justify the award of public tax dollars," and it lists a number of factors that may be included in gauging such responsibility. Accordingly, although GML 3

5 [* 4] 103 and PAL 1209 are not ~ctly applicable to the instant matter, the case law construing those provisions is highly instructive. ~ Matter of Aurrechione v New York State Div. of Human Rights, 98 NY2d 21 (2002) (federal case law on discrimination helpful where state and local anti-discrimination laws are similar to federal laws). Under GML 103, a municipal contract may not be awarded to a vendor whose bid fails, in a material way, to comply with all the specifications of the municipal agency's request for proposals. ~~I. Janvey & Sons. Inc. v County of Nassau, 90 AD2d 807 (2d Dept 1982), revd on other grounds 60 NY2d 887 ( 1983). Noncompliance is material "when it would impair the interests of the contracting public authority or place some of the bidders at a competitive disadvantage." Matter of Hungerford & Terry. Inc. v Suffolk County Water Auth., 12 A03d 675, 676 {2d Dept 2004), citing Matter of Cataract Disposal v Town Bd. of Town of Newfane, 53 NY2d 266, 272 ( 1981), It is for the agency to determine whether noncompliance with a specification is material, in view of the underlying purpose of GML 103 that all bidders be treated alike so as to avoid corruption or favoritism, and the agency's determination must be upheld if it is supported by a rational basis. ~; Matter of Permis Constr. Corp. v City of New York, 257 AD2d 480 (1st Dept 1999); In re C. K. Rehner, Inc., 106 AD2d 268 (1st Dept 1984). Petitioner 1 s challenge bears on two issues. Petitioner contends that Alps lacks both the experience and the technical 4

6 [* 5] staffing that the RFP requires. --th regard to the former, the RFP requires that a proposer "shall have a minimum of 10 years experience managing, improving, and handling the HVAC maintenance program for large industrial/commercial facilities where total annual contracts are at least $5 million." Alps's proposal listed 14 contracts, totalling $24, 746, , that it had completed, beginning in September 1997, that is, a little more than eight years prior to its January 2006 proposal. As both Alps and the TBTA point out, Alps also listed contracts on hand, at the time that ALPS submitted its bid, the values of which, when added to the values of the completed contracts, yielded more than $5 million a year, when averaged over 10 years. Had Alps performed these contracts (the court notes, parenthetically, that items (7) and (9) on the list of contracts on hand are identical), the averaging, over 10 years, of work performed in eight years might well have been an irregularity that the TBTA could reasonably have waived. The facts are otherwise, however. Although Alps had performed at least 75% of the work on many of the uncompleted contracts, Alps had completed no more than 25% of the work on contracts worth approximately $14.8 million, and on three of these, worth a total of $8,909,000, Alps had not yet performed any work. While the RFP did not require that only completed contracts could count as experience, it did provide that the value of contracts was a measure of the required experience. Contracts on which no work, or less than a quarter of the work required, has been performed are not evidence of any experience, 5

7 [* 6] other than that of securing con ~cts. Adding the $24,746, in completed contracts to $19,862,304 in substantially completed contracts yields $44, 609, , which, averaged over 10 hypothetical years, yields approximately $4.46 million per year, that is, approximately 89% of the required yearly value of contracts. This shortfall, too, the TBTA might reasonably have waived. However, all of the 21 contracts on hand were awarded in 2000, or later. All but one of them were awarded in 2003, or later, that is, within the three years immediately preceding Alps's bid, and twelve of those, with an aggregate value of $ million, were awarded in These recently awarded contracts do not even remotely satisfy the requirement of "10 years experience where total annual contracts are at least $5 million." (Emphasis added.) This is not a case like Matter of Suit-Kate Corp. v City of Binghamton Bd, of Contract and Supply (216 AD2d 831 [3d Dept 1995]), upon which the TBTA relies. In that case, the contacting entity had determined that certain projects, that the winning bidder had performed, sufficiently resembled those required in the bid specifications that literal compliance with the specifications was unnecessary. Here, by contrast, nothing in Alps's bid approximately met the TBTA's stated requirements for experience. As it should be unnecessary to say, this court has no opinion of how much experience the TBTA should have required in order for it to be confident that a proposer would adequately perform the Contract. However, having set forth the requirements that it did, 6

8 [* 7].... the TBTA's subsequent relian. on contracts which had not substantially been performed, as evidence of the experience required by the RFP, and the TBTA's decision to average, over 10 years, the value of contracts only recently awarded, despite the RFP's requirement of annual values for 10 years, have no rational basis. To be sure, Alps's best and final offer was $1.3 million less than that of AWLS. P&M 250, however, like New York City Charter 313, requires that contracts be awarded to the lowest responsible bidder, not simply to the lowest bidder. Respondents point out that the RFP provided that the TBTA could amend the terms thereof. It does not follow, however, that the TBTA was free to do so retroactively, so as to benefit one particular proposer at the expense of another. In view of the discussion above, it is not necessary to discuss petitioner's challenge to the sufficiency of Alps's staffing. Accordingly, it is; ORDERED, ADJUDGED AND DEREED that the petition is granted, the award of Triborough Bridge and Tunnel Authority Contract 05-MNT- 2742TBTA is vacated, said contract is rescinded, and the Triborough Bridge and Tunnel Authority is directed to re-open the bidding. the court. The foregoing constitutes the decision, order and judgment of Dated: December ~J_l_, 2006 FILED 7 ENTER: Hon. Karen S. smith, :,.:I., S. c. :::