Public construction contracts are subject to New York’s competitive bidding statutes. They provide that contracts be awarded to the lowest responsible and responsive bidder. A responsive bidder is a contractor who has complied with the strict requirements of the invitation to bid. Whether a bid is responsive to the bid specifications is a frequent cause of litigation in the bid selection process, as shown in the recent case of Matter of Alpha Construction Resources v New York City Department of Parks and Recreation.
Approximately one year after its corporate formation, Alpha Construction Resources, Inc. bid on two construction projects for the New York City Department of Parks and Recreation, one in Queens and the other in Manhattan. The bid specifications for both projects required the contractor to have successfully completed other comparable projects (the deconstruction and construction of a comfort station and the reconstruction of a playground). The Parks Department rejected both of Alpha’s bids, finding that Alpha was a new corporation and it did not have the required experience with comparable projects.
Alpha commenced an Article 78 proceeding to challenge the Parks Department’s determination. Alpha argued that even if it was a new corporation, each of its four team members had sufficient experience in similar projects, and that the bid requirement that the newly formed organization have experience was arbitrary. Alpha further argued that the only means for Alpha to gain the required experience on a comparable public project would be for the City to give the new corporation that opportunity. According to Alpha, the City’s failure to do so effectively closed bidding to Alpha and anyone but contractors that have successfully bid for City projects.
The court denied Alpha’s petition, finding that the Parks Department’s bid specification requiring bidders, as opposed to their individual employees, to have experience was for the purpose of demonstrating that a bidder’s employees have experience working together as a team. The court further noted that the Parks Department could have allowed for accumulated individual experience, and its failure to do so shows that the Parks Department was looking for prior experience working as an organization. While the court did not dispute the individual experience of Alpha’s four team members, it noted that there was nothing in Alpha’s bid submission showing that it has experience working as a team in the new corporation or that the staff had worked together under a different name or corporation. The court therefore held that the Parks Department had a reasonable basis to conclude that Alpha’s bid was non-responsive.
As for Alpha’s argument that that the experience requirement was discriminatory, the court noted that Alpha failed to show that it could not gain the required experience as a general contractor or a subcontractor on a comparable project, or that the only way for Alpha to gain that experience would be for the Parks Department to give it the work. In the absence of such evidence, the court found that there was nothing discriminatory or arbitrary about the Parks Department’s determination that Alpha failed to satisfy the bid’s experience requirement.
Alpha appears to have made a persuasive argument that its staff of professionals, including an engineer and three persons holding masters degrees in business administration or construction management, and each professional’s experience meet the threshold credentials, experience and performance record required. The court, however, followed well established case law giving broad discretion to public entities when reviewing a responsiveness determination. Where there is a rational basis for the public entity’s insistence upon strict compliance with the bid specifications, the courts will uphold the determination of non-responsiveness.