Public construction contracts in New York are subject to the statutory competitive bidding requirements. They provide that the contract shall be awarded to the lowest responsible and responsive bidder. A “responsible” bidder is a contractor who has the skill, integrity, experience, financial and technical resources to complete the work in a satisfactory manner. A “responsive” bidder is a contractor who has complied with the exact requirements of the bid invitation.
Bid protests frequently arise when the contractor’s bid is rejected because it was found to be “non-responsive”, as shown in the recent case of E.W. Tompkins Company, Inc. v. State University of New York.
In January 2008, the State University of New York advertised for bids on a project involving the upgrade of a heating and cooling plant at its Albany campus. The work included asbestos abatement, demolition of parts of the existing system, installation of new equipment, new piping and extensive electrical work. The bid specifications required the successful contractor to have “completed at least three similar projects within the immediate past five years involving centrifugal chillers, boiler house controls, HTW generator burner replacement with controls, and replacement of large diameter piping over significant distances.” The specifications further stated that “references must be submitted with the bid, documenting the scope of work completed, the contract value, the time frame it was completed under, and the name of the client.”
E.W. Tompkins Company, Inc. submitted its bid for the project on February 2008. After reviewing the bid, SUNY’s Associate Director of Architecture, Engineering & Construction sent a letter to the contractor requesting additional information with respect to the three projects that the contractor listed in its bid as evidence that it had the requisite prior work experience. After supplying its response to SUNY’s request, the contractor was notified that although it was the lowest bidder, its bid had been deemed “non-responsive” and the contract would be awarded to a competitor.
SUNY based its non-responsive determination on the contractor’s failure to provide the requested information and SUNY’s inability to verify that the contractor’s prior work experience met the requirements of the specifications. Additionally, SUNY noted that the three projects listed by the contractor in its bid as evidence of this prior work experience had, in fact, been performed by another firm, Albany Specialties, Inc.
Upon receipt of the non-responsive determination, the contractor had its attorney send a letter to the SUNY representative that, for the first time, advised that the contractor had merged with Albany Specialties, Inc. in 2005, which had the requisite experience. Based on the supplemental information, the contractor asked that its bid be reconsidered. SUNY denied the request to reconsider, awarded the contract to the second bidder and the contractor sued SUNY.
The trial court held that SUNY had a reasonable basis to conclude that the contractor’s bid was non-responsive and dismissed the case. The contractor appealed.
Decision The appellate court affirmed the lower court’s holding. In so doing, the court relied on well established case law stating, “judicial review of an agency’s decision denying or awarding the contract is limited to ascertaining whether there is a rational basis to support the agency’s determination.” In addition, the court stated that “an agency, when composing bid specifications, may establish requirements – as long as they are rationally based – that set forth criteria for experience and qualifications that must be met for an entity to be an eligible bidder and, it may disqualify a bidder for failure to comply with these requirements.”
In applying the law to the facts, the court simply recounted the contractor’s original failure to provide any description of the scope for work completed for each project it identified as relevant, the contractor’s insufficient clarification, the performance of the relied upon work by a separate entity, and the contractor’s failure to indicate in any of its bid documents that it had merged with the company who did perform the work. Based on these facts, the appellate court found SUNY’s decision of “non-responsiveness” to have a rational basis.
Courts give broad discretion to public entities when reviewing a responsiveness determination. Where the agency’s insistence upon strict compliance with the bid specifications has a rational basis, the courts will uphold the determination of non-responsiveness.
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