Brega Transp. Corp. v. Brennan

• Decision Date: 24 April 2013
• Citation: 964 N.Y.S.2d 203,105 A.D.3d 985,2013 N.Y. Slip Op. 02707
• Parties: BREGA TRANSPORT CORP., respondent, v. Paul BRENNAN, etc., et al., appellants.
• Court: New York Supreme Court — Appellate Division

105 A.D.3d 985

964 N.Y.S.2d 203

2013 N.Y. Slip Op. 02707

BREGA TRANSPORT CORP., respondent,

v.Paul BRENNAN, etc., et al., appellants.

Supreme Court, Appellate Division, Second Department, New York.

April 24, 2013.

Eckert Seamans Cherin & Mellott, LLC, White Plains, N.Y. (Thomas M. Smith of counsel), for appellants.

Burton Dorfman, P.C., Piermont, N.Y. (Burton I. Dorfman of counsel), for respondent.

DANIEL D. ANGIOLILLO, J.P., THOMAS A. DICKERSON, CHERYL E. CHAMBERS, and PLUMMER E. LOTT, JJ.

In an action, inter alia, for a judgment declaring that the specifications of Invitation to Bid for Transit Operations and Maintenance RFB–RC–2012–02 violate General Municipal Law § 103 and the Rockland County Charter, the defendants appeal, as limited by their brief, from so much of a judgment of the Supreme Court, Putnam County (Nicolai, J.), dated March 30, 2012, as declared that the specifications of Invitation to Bid for Transit Operations and Maintenance RFB–RC–2012–02 violate General Municipal Law § 103 and the Rockland County Charter, enjoined the County from proceeding with the bidding process, and directed the County of Rockland to issue a revised request for bids.

ORDERED that the judgment is reversed insofar as appealed from, on the law, with costs, and it is declared that the specifications of Invitation to Bid for Transit Operations and Maintenance RFB–RC–2012–02 do not violate General Municipal Law § 103 and the Rockland County Charter.

The County of Rockland (hereinafter the county) sought bids for public bus transportation via Invitation to Bid for Transit Operations and Maintenance RFB–RC–2012–02 (hereinafter the RFB). After reviewing the RFB, Brega Transport Corp. (hereinafter Brega) determined that it could not meet the bid specifications and protested them as improperly exclusionary and discriminatory. The county executive denied the bulk of Brega's protests, and Brega sought review via a CPLR article 78 proceeding. The Supreme Court converted the proceeding to a declaratory judgment action, as requested by Brega, and entered judgment, inter alia, declaring that the RFB violated General Municipal Law § 103 and the Rockland County Charter.

General Municipal Law § 103(1) provides, inter alia, that, in awarding any contract in excess of $35,000, public entities must award the contract to “the lowest responsible bidder.” “The central purposes of New York's competitive bidding statutes are the ‘(1) protection of the public fisc by obtaining the best work at the lowest possible price; and (2) prevention of favoritism, improvidence, fraud and corruption in the awarding of public contracts' ” (Matter of AAA Carting & Rubbish Removal, Inc. v. Town of Southeast, 17 N.Y.3d 136, 142, 927 N.Y.S.2d 618, 951 N.E.2d 57, quoting Matter of New York State Ch., Inc., Associated Gen. Contrs. of Am. v. New York State Thruway Auth., 88 N.Y.2d 56, 68, 643 N.Y.S.2d 480, 666 N.E.2d 185;see Matter of L & M Bus Corp. v. New York City Dept. of Educ., 17 N.Y.3d 149, 156, 927 N.Y.S.2d 311, 950 N.E.2d 915;Matter of Conduit & Found. Corp. v. Metropolitan Transp. Auth., 66 N.Y.2d 144, 148, 495 N.Y.S.2d 340, 485 N.E.2d 1005;Matter of Construction Contrs. Assn. of Hudson Val. v. Board of Trustees, Orange County Community Coll., 192 A.D.2d 265, 267, 600 N.Y.S.2d 953).

“New York's competitive bidding statutes do not compel unfettered competition, but do demand that specifications that exclude a class of would-be bidders be both rational and essential to the public interest” (Matter of New York State Ch., Inc., Associated Gen. Contrs. of Am. v. New York State Thruway Auth., 88 N.Y.2d at 67–68, 643 N.Y.S.2d 480, 666 N.E.2d 185). As this Court has stated: “Municipalities may fix reasonable standards and limitations on products and services, even if they tend to favor one bidder over another by their operation, provided that the public interest is served and not compromised thereby. On the other hand, General Municipal Law § 103 is violated by bid requirements which reduce competition for reasons which do not inure to the benefit of the public, but rather serve other, unrelated purposes” (Matter of Construction Contrs. Assn. of Hudson Val. v. Board of Trustees, Orange County Community Coll., 192 A.D.2d at 267–268, 600 N.Y.S.2d 953 [citations omitted]; see Matter of New York State Ch., Inc., Associated Gen. Contrs. of Am. v. New York State Thruway Auth., 88 N.Y.2d at 67, 643 N.Y.S.2d 480, 666 N.E.2d 185;Matter of E.W. Tompkins Co., Inc. v. State Univ. of N.Y., 61 A.D.3d 1248, 1250, 877 N.Y.S.2d 743). Accordingly, “[a] municipality must err on the side of inclusion, and eschew unnecessarily narrow definitions of the statutory term ‘responsible bidder’ ” (Matter of Construction Contrs. Assn. of Hudson Val. v. Board of Trustees, Orange County Community Coll., 192 A.D.2d at 268, 600 N.Y.S.2d 953, quoting General Municipal Law § 103). Nevertheless, it is a municipality's right to determine whether a bid meets its specifications, and that determination is entitled to deference if it is supported by “any rational basis” (Matter of Hungerford & Terry, Inc. v. Suffolk County Water Auth., 12 A.D.3d 675, 676, 785 N.Y.S.2d 506).

Where bid specifications are “not facially anticompetitive,” courts apply “ordinary rational basis review” (Matter of L & M Bus Corp. v. New York City Dept. of Educ., 17 N.Y.3d at 160, 927 N.Y.S.2d 311, 950 N.E.2d 915). A “spectral ‘appearance of impropriety’ is insufficient proof to disturb a [municipality's] determination under the competitive bidding statutes” (Matter of Acme Bus Corp. v. Board of Educ. of Roosevelt Union Free School Dist., 91 N.Y.2d 51, 55, 666 N.Y.S.2d 996, 689 N.E.2d 890, quoting Matter of Conduit & Found. Corp. v. Metropolitan Transp. Auth., 66 N.Y.2d at 150, 495 N.Y.S.2d 340, 485 N.E.2d 1005 [internal quotation marks omitted] ). Instead, a party challenging a procurement “has the burden to demonstrate ‘actual’ impropriety, unfair dealing or some other violation of statutory requirements” (Matter of Acme Bus Corp. v. Board of Educ. of Roosevelt Union Free School Dist., 91 N.Y.2d at 55, 666 N.Y.S.2d 996, 689 N.E.2d 890, quoting Matter of Conduit & Found. Corp. v. Metropolitan Transp. Auth., 66 N.Y.2d at 149, 495 N.Y.S.2d 340, 485 N.E.2d 1005).

Here, the Supreme Court improperly shifted the burden of proof from Brega to the county. Since Brega made only conclusory assertions and failed to demonstrate that the county's bid specifications were irrational or exclusionary, the court erred in invalidating the RFB on that basis ( see Matter of Eldor Contr. Corp. v. Town of Islip, 277 A.D.2d 233, 234–235, 716 N.Y.S.2d 681;see also Matter of E.W. Tompkins Co., Inc. v. State Univ. of N.Y., 61 A.D.3d at 1250–1251, 877 N.Y.S.2d 743;Matter of Positive Transp. v. City of N.Y. Dept. of Transp., 183 A.D.2d 660, 660–661, 584 N.Y.S.2d 51).

The Supreme Court also found that the bid specifications improperly usurped the role of the Rockland County Legislature because they provide that: “Where the...