New York's competitive bidding statutes serve a dual purpose. The primary purpose is to benefit the taxpaying public by enabling government agencies to obtain the best price for public construction projects through open, competitive bidding. The secondary purpose is to assure that contractors are on an equal footing when bidding public works.
These statutes are designed to reject a contractor who is unqualified or whose bid is not responsive to the invitation to bid. The award must be made to the lowest responsible and responsive bidder. The factor most likely to cause problems in the bid selection process is responsiveness, as shown in the case of Matter of K.S. Contracting Corp. v New York City Department of Design and Construction.
In September of 2010, the DDC solicited bids for a general construction project to renovate the Bronx River Arts Center. The title of the solicitation referred to the work as general construction, and the contractor requirements specified that the contractor must have completed three similar projects in scope to the required work within the past five years. These requirements permitted the bidder to use the experience of its employees gained at different entities if the employee had a significant management role in the prior entity and had a significant management rule in the bidding entity for at least six months prior to bid.
K.S. submitted a bid which ultimately turned out to be the low bid. In setting forth its experience, K.S. listed projects which involved primarily exterior renovation. K.S. also listed projects by other entities which involved its current employees. The DDC rejected K.S.'s bid, finding that it was not responsive to the solicitation. K.S. brought a lawsuit challenging the DDC's finding.
The Court upheld the DDC's finding that K.S.'s bid was not responsive to the solicitation because of its failure to meet the project's experience requirements. Specifically, the Court upheld the city's determination that because the project involved significant interior renovation work, K.S.'s exterior renovation projects were ineligible to be counted as experience sufficient to meet the bid's requirements. In doing so, the Court held that the city's listing of the project as a "general construction work" project, as opposed to a "major gut renovation work" did not require it accept exterior renovation experience as the equivalent of interior renovation experience. The Court also upheld the city's discounting of the experience of one of its employees because his previous position as a "Construction Project Manager" was not a significant managerial role.
The determination of who is and who is not a responsive bidder depends on the exercise of discretion. If the municipality has a rational basis for determining that a bidder has not met the bid qualifications requirement, a court will uphold the discretionary determination of non-responsiveness.