Public construction contracts are subject to New York’s competitive bidding statutes. They provide that contracts be awarded to the lowest responsive and responsible bidder. A responsive bidder is a contractor who has complied with the strict requirements of the bid documents. 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 Amcon Contracting Corp. v Dormitory Authority of the State of New York.
In January of 2013, Amcon Contracting Corp. submitted a bid to the Dormitory Authority of the State of New York to perform exterior restoration and asbestos abatement at the Helen Hayes Hospital. In June, DASNY awarded the contract to Amcon. DASNY, however, rescinded the award after it had been advised that Amcon was suspended from the New York City School Construction Program. DASNY re-bid the project, and Amcon was once again the low bidder. This time, DASNY rejected Amcon’s bid on the grounds that it was not responsive to the solicitation because it failed to include a unit price worksheet. DASNY’s rejection determination was challenged by Amcon in an Article 78 proceeding.
In its Article 78 proceeding, Amcon maintained that the bid documents did not require the unit price worksheet, but even if they did, the failure was a “minor informality which should have been waived”.
The court dismissed Amcon’s challenge, holding that the bid specifications specifically required the submission of a unit price worksheet. As to Amcon’s argument that the failure to submit the worksheet was a “minor informality”, the court did note that the values scheduled on the worksheet amounted to only $34,435, or a mere 1.57% of Amcon’s overall $2,199,000 bid. However, the court held that the failure to submit this worksheet in the first place deprived DASNY of the opportunity to determine whether the information which was to have been submitted was, in fact, minor. Therefore, the court could not conclude that a $34,435 discrepancy, even though proportionately small when compared to the overall bid, was actually immaterial.
As to the argument that DASNY had the discretion in the bid documents to waive irregularities, the court held that this power was written into the bid specifications for DASNY’s benefit, and that DASNY was not required to waive the submission for Amcon’s benefit.
Here, the Amcon court applied well settled case law to hold that the determination of a public agency that a variance from the bid specifications is material will be upheld by the courts if the agency’s determination of a non-responsive bid is supported by any rational basis.
Contractors would be well advised to strictly comply with the bid instructions. Public agencies have broad discretion in both determining what constitutes compliance with the bid documents, as well as what items of compliance they choose to waive—provided that the waiver is a technical noncompliance or a mere irregularity. An agency, however, may not waive a material noncompliance with a bid specification because the waiver would give the bidder an unfair competitive advantage over other bidders.
Mr. Miuccio is a partner of the law firm of Welby, Brady & Greenblatt, LLP and General Counsel to the Construction Industry Council of Westchester & Hudson Valley, Inc. and the Building Contractors Association of Westchester & the Mid-Hudson Region, Inc. Gregory J. Spaun, a partner with the firm, assisted with the writing of this article.