Omni Recycling of Westbury, Inc. v Town of Oyster Bay

[*1] Omni Recycling of Westbury, Inc. v Town of Oyster Bay 2006 NY Slip Op 52683(U) [22 Misc 3d 1116(A)] Decided on February 10, 2006 Supreme Court, Nassau County Mahon, J. Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431. As corrected in part through February 3, 2009; it will not be published in the printed Official Reports.

Decided on February 10, 2006
Supreme Court, Nassau County

Omni Recycling of Westbury, Inc., Petitioner,

against

Town of Oyster Bay, Town Board of the Town of Oyster Bay and Giove Company, Inc., Respondents.



10718/05



Plaintiff AttorneyAnthony Core516-997-2700

Defendant AttorneyJaspan, Schlesinger, Hoffman516-393-8259

Roy S. Mahon, J.

Upon the foregoing papers, the Petition by Petitioner for an Order for a judgment pursuant to CPLR Article 78, annulling, declaring void, and setting aside Resolution 199-2005of the Town Board of the Town of Oyster Bay, which awarded Contract No. DPW 05-909 for the recycling services of newspaper, mixed paper and corrugated cardboard to Giove Company, Inc., upon the grounds that the procedures used by the Town did not comply with the New York General Municipal Law, the Town of Oyster Bay procurement policy and the New York State Environmental Quality Review Act, is determined as hereinafter provided:

The Petitioner brings the instant Petition to challenge the award of contract DPW 05-909 to the Respondent Giove Company, Inc. by Resolution 199-2005 passed by the Respondent Town Board of the Town of Oyster Bay of the Respondent Town Board of Oyster Bay (hereinafter collectively referred to as Oyster Bay). The contract awarded involves recycling service for newspaper, mixed paper and corrugated cardboard.

The petitioner in substance contends that the process employed by Oyster Bay for the awarding of Contract DPW 05-909 is " . . . contrary to New York State Law for procurement of goods and services". In paragraph 40 the Petitioner sets forth: [*2]

"40. The process utilized by the TOWN for this procurement was contrary to New York State law for the procurement of goods and services by a municipality. The General Municipal Law proffers three (3) general authorities for a municipality in those circumstances to procure a vendor to provide goods and services; General Municipal Law §103, GML §120(w), and GML §104(b), none of which were properly invoked by the TOWN in this instance."

The process employed by the Respondent Oyster Bayinvolved a solicitation for Requests For Proposals dated May 17, 2004 sent by the Respondent Oyster Bay's Department of Public Works to certain entities including the Petitioner and Respondent Giove Company, Inc. The proposed contract in issue does not involve the expenditure of public funds by the Respondent Oyster Bay but rather involves payment by the successful proposer to the Respondent Oyster Bay of a price per ton that said successful party would pay to Oyster Bay to recycle newspaper, mixed paper and corrugated cardboard collected by Oyster Bay in conjunction with Oyster Bay's recycling program. The Petitioner and the Respondent Giove Company, Inc. submitted proposals that were reviewed by the Respondent Oyster Bay with the Respondent Giove Company Inc. being selected and awarded the contract pursuant to Resolution 199-2005.

The Court has reviewed the provisions of General Municipal Law §103 and General Municipal Law §120-w and finds that neither section is applicable to the facts in issue in the instant Petition.

General Municipal Law §103(1) in pertinent part sets forth:

"1. Except as otherwise expressly provided by an act of the legislature or by a local law adopted prior to September first, nineteen hundred fifty-three, all contracts for public work involving an expenditure of more than twenty thousand dollars and all purchases contracts involving an expenditure of more than ten thousand dollars, shall be awarded by the appropriate officer, board or agency of a political subdivision or of anydistrict therein including but not limited to a soil sealed bids in the manner provided by this selection."

The Petitioner cites the case of Matter of Citiwide News v New York City Transit Authority, 62 NY2d 464, 478 NYS2d 593 for the proposition that: " A contract which provides for a lesser income to a governmental unit than a competing contract might provide, is an 'expenditure' within the meaning of [the competitive bidding statute". When viewed in the context of the facts set forth in Citywide News v New York City Transit Authority which additionally involved a rehabilitation of existing newsstands and the construction of additional facilities by the entity responding to the Request For Proposals in that case, the Court's determination therein does not hold that the requirements of the provisions of §103 of the General Municipal Law are applicable to the facts in issue in the instant contract. The Court observes that the Court in Citywide News v New York City Transit Authority, supra, set forth:

"Neither this statute nor that applicable to political subdivisions (General Municipal Law, §103, subd 1), offers any definition of "contract for public work" or otherwise indicates the specific [*3]nature of the contracts falling within the public bidding requirement. It is unclear, however, that a contract in the nature of a lease by a public entity as lessor or by which a franchise or license is granted need not, generally, be subjected to the competitive bidding process, for such a contract does not ordinarily involve an expenditure of public money (e.g., Bus Top Shelters v City of New York, 99 Misc 2d 198, 203; 1982 Opns St Comp No. 82-237).. . .

It is not, of course, always clear whether the Legislature intended its various competitive bidding statutes to be applicable to given transactions. We were recently confronted with such a question in Matter of Exley v Village of Endicott ( (51 NY2d 426). There, a municipality had entered into an arrangement with New York Telephone Company for the provision of certain telephone terminal systems. The agreement had attributes of both a lease and a sale. In the latter, the transaction was subject to public bidding as a "purchase contract" (General Municipal Law, §103, subd 1; see, also, Public Authorities Law, §1209, subd 2). Given what we termed the "hybrid nature" of the transaction, we deeded it necessary to examine the (p 432) "total character of the arrangement". Finding significant the facts that title to the telephone equipment never passed to the municipality, that the telephone company assumed the risk of loss for certain events beyond the customer's control and assumed the obligation to service the equipment, and that there was no hint of subterfuge in the arrangement, we concluded that the transaction was in the nature of a true lease and thus was not within the scope of the competitive bidding statute."

Citywide News v New York City Transit Authority, supra at 470-472

A review of the Request for Proposal For Vendor Services in issue reveals that same is not a contact that would be governed by the provisions of §103 of the General Municipal Law.

§120-w of the General Municipal Law provides in subsections 1(b) and 2:

"1. Definitions. As used in this section:

(b) "Solid waste management-resource recovery facility" or "facility" or "project" means any facility, plant, works, system, building, structure, improvement machinery, equipment, fixture or other real or personal property which is to be used, occupied or employed beyond the initial solid waste collection process for the storage, processing, or disposal of solid waster or the recovery by any means of any material or energy product or resource therefrom including but not limited to recycling centers, transfer stations, baling facilities, rail haul or barge haul facilities, processing systems, resource recovery facilities or other facilities for reducing solid waste volume, sanitary landfills, plants and facilities for compacting, composting or pyrolization [FN1] of solid wastes, incinerators, and other solid waste disposal, reduction or conversion facilities. For the purpose of this section, solid waste management-resource recovery facilities include solid waste recovery and management projects as defined in subdivision two of section 51-0903 of the environmental conservation law.

2. Notwithstanding the provisions of any other law, general, special or local relating to the length, duration and terms of contracts which a municipality may enter into, any municipality may [*4]enter into a contract with any person, upon such terms and conditions as may be agreed upon, for the design, construction, operation, financing, ownership or maintenance of a solid waste management-resource recovery facility, for the processing or disposal of solid waste or for a system of collection and disposal of municipal solid waste through resource recovery which may include source separation, for a period not to exceed twenty-five years, and, except in a city having a population of one million or more, for collection and disposal of municipal solid wastes by means other than resource recovery for a period not to exceed five years as provided for in this section."

A review of the foregoing establishes that in light of the fact that this action does not involve a solid waste management resource recovery facility said section §120-w does not apply to the Request For Proposal in issue herein.

§104-b of the General Municipal Law provides:

"1. Goods and services which are not required by law to be procured by political subdivisions or any districts therein pursuant to competitive bidding must be procured in a manner so as to assure the prudent and economical use of public moneys in the best interests of the taxpayers of the political subdivision or district, to facilitate the acquisition of goods and services of maximum quality at the lowest possible cost under the circumstances, and to guard against favoritism, improvidence, extravagance, fraud and corruption. To further these objectives, the governing board of every political subdivision and any district therein, by resolution, shall adopt internal policies and procedures governing all procurements of goods and services which are not required to be made pursuant to the competitive bidding requirements of section one hundred three of this article or of any other general, special or local law. In cities with a population of one million or more, the procurement policy board shall develop and promulgate such policies and procedures by rule.

2. Such policies and procedures shall contain provisions which, among other things:

a. prescribe a procedure for determining whether a procurement of goods and services is subject to competitive bidding and documenting the basis for any determination that competitive bidding is not required by law;

b. providing that, except for procurements made pursuant to subdivision three of section one hundred three or section one hundred four of this article, section one hundred seventy-five-b of the state finance law, section one hundred eighty-six of the correction law, or the policies and procedures adopted pursuant to paragraph f of this subdivision, alternative proposals or quotations for goods and services shall be secured by use of written requests for proposals, written quotations, verbal quotations or any other method of procurement which furthers the purposes of this section;

c. set forth when each such method of procurement will be utilized, taking into account which method will best further the purposes of this section and the cost-effectiveness of the method;

d. require adequate documentation of actions taken in connection with each such method of [*5]procurement;

e. require justification and documentation of any contract awarded to other than the lowest responsible dollar offeror, setting forth the reasons such an award furthers the purpose of this section; and

f. set forth any circumstances when, or types of procurements, for which, in the sole discretion of the governing body (or in the case of cities with a population of one million or more, the procurement policy board), the solicitation of alternative proposals or quotations will not be in the best interest of the political subdivision or district therein."

Subsection 3(d) of the Respondents Resolution No. 216-2004 (see Petitioner's Exhibit N) was enacted based upon the enabling language set forth in §104-b of the General Municipal Law. Said Resolution provides:

"WHEREAS, General Municipal Law, Section 104-b, requires every town to adopt the bidding requirements of General Municipal Law, Section 103, or any other law; and

WHEREAS, the Town of Oyster Bay, both by Ordinance and by departmental policies and procedures, has a long established framework for the procurement of goods and services; and

WHEREAS, it is desirable to have said policies and procedures embodied in one document; and

WHEREAS, comments have been solicited from those officers of the Town involved with procurement,

NOW, THEREFORE, BE IT RESOLVED, That the Town of Oyster Bay does hereby adopt the following procurement policies and procedures;

. . .

Guideline 3(d). Due to the unique nature of the industry, contracts for the disposal of recyclable materials may be awarded pursuant to a Request for Proposals process. The Town may make an award to any responsible proposer, based upon the determination that the selected proposal is the most responsive to the Request for Proposals. The Town may negotiate with any proposer. In the event that an award is made to a proposer whose proposal does not provide the lowest net cost, or, if an net revenue is projected, the greatest net revenue, the Town must adopt a resolution indicating the reasons that such award is in the public interest."

The Petitioner's application is in the nature of an application pursuant to CPLR §7803(3) that the determination by the Respondent Oyster Bay was "in violation of lawful procedure". A review of the respective submissions and in particular the March 8, 2005 Respondent Oyster Bay Town Board meeting, the Respondent Town's internal review and the respective reports of the Respondent [*6]Oyster Bay's consulting engineers Dvirka and Bartillucci together with the opportunities afforded to the Petitioner in relation to its submission that the Respondent Oyster Bay did not deviate from its enunciated procedure. Additionally, through the respective submissions of John Ellsworth, the Respondent Oyster Bay has established that the classification of the awarding of the contract for the services in issue was properly classified as a TYPE II Action and that Oyster Bay was in conformity with the provisions of 6 NYCRR 617.5 et seq.

Based upon all of the foregoing, the Petitioner's Petition for an Order for a judgment pursuant to CPLR Article 78, annulling, declaring void, and setting aside Resolution 199-2005of the Town Board of the Town of Oyster Bay, which awarded Contract No. DPW 05-909 for the recycling services of newspaper, mixed paper and corrugated cardboard to Giove Company, Inc., upon the grounds that the procedures used by the Town did not comply with the New York General Municipal Law, the Town of Oyster Bay procurement policy and the New York State Environmental Quality Review Act, is denied.

SO ORDERED.

DATED:February 10, 2006......................................................................

J.S.C.