A recent case out of the Appellate Division, Second Department is instructive to
public works contract bidders, who believe that the low bidder gets the contract. The
case is In the Matter of AAA Carting and Rubbish Removal, Inc. v. Town of Southeast.1
In this case the Town awarded a contract for rubbish removal to the second low bidder
(Suburban Carting). and the low bidder (AAA Carting) sought court review of the
Town’s decision by bringing an Article 78 proceeding. The Town favored the second
low bidder on the basis that it could offer superior service as compared to the low bidder.
To the Town, the second low bidder was the lowest responsible bidder even though the
cost would be higher.
The Supreme Court, Putnam County, granted the low bidder’s Article 78 petition, thereby
overturning the Town’s decision to award the contract to the second low bidder. The
second low bidder (not the Town) appealed to the Appellate Division, Second
Department. The appellate court reversed the lower court and dismissed the low bidder’s
Article 78 petition, leaving intact the contract between the Town and the second low
bidder.
In reversing the lower court, the appellate court summarized several principals of law that
potential bid challengers should be aware of:
a. A court reviewing an Article 78 bid challenge may not substitute its
judgment for that of the public body unless the decision is arbitrary and capricious or the
public body’s exercise of discretion lacks a rational basis.
b. It is not the reviewing court’s role to weigh the desirability of any action
or to choose among alternatives.
c. General Municipal Law §103(1) requires any public works contract for
more than $10,000 to be awarded to “the lowest responsible bidder”. This is an elastic
concept that includes “consideration of skill, judgment and integrity”.
d. Public bodies may investigate the experience and background of the
bidder.
e. Public bodies need not give “slavish attention to financial considerations
alone.”
f. Where good reason exists, the low bid may be disapproved or all the bids
rejected.
g. Where a public body exercises its discretion and rejects one or more bids,
its decision “ought not to be disturbed by the courts unless it is irrational, dishonest or
otherwise unlawful.”
Successful bid challenges are difficult to achieve. Now you know why.
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This alert provides general information only. It is not intended to provide legal advice.
We encourage you to contact an attorney should you desire to discuss specific situations
for which you may need legal advice.
1 74 AD3d 959 (2nd Dept. 2010)
