Matter of Merco Inc. v Niagara Falls Water Bd.
Annotate this CaseDecided on November 30, 2009
Supreme Court, Niagara County
In the matter of Merco, Inc., Petitioner,
against
Niagara Falls Water Board, Respondent.
139011
Peter M. Kutil, Esq.
King & King, LLP
Attorneys for Petitioner
27 - 12 Thirty-seventh Avenue
Long Island City, New York 11101
John J. Ottaviano, Esq.
Harris Beach, PLLC
Attorneys for Respondent
P.O. Box 1230
172 East Avenue
Lockport, New York 14095
Damon A. DeCastro, Esq.
Roscetti & DeCastro, P.C.
Attorneys for Yarussi Construction, Inc.
730 Main Street
Niagara Falls, New York 14301
Ralph A. Boniello, J.
Petitioner Merco, Inc., (hereinafter, "Merco") an unsuccessful bidder,
commenced the instant proceeding pursuant to CPLR article 78. The Petitioner alleges that
Respondent Niagara Falls Water Board (hereinafter, "Board") violated the requirements of
General Municipal Law § 103 by awarding or taking steps to award the contract for phase 2
of the North Gorge Interceptor Capacity Restoration Project (hereinafter, "Project") to Yarussi
Construction, Inc. (hereinafter, "Yarussi"). Specifically, the Petitioner claims that the bid in the
sum of $8,928,500.00 submitted by Yarussi on October 27, 2009, was a conditioned bid and
non-responsive, in that, the bid price did not include the removal of any contaminated materials
for the subject tunnel. Further, Petitioner asserts that Respondent Board acted improperly in
allowing Yarussi to amend its sealed bid after all the bids were opened by "retracting" its
previous objections concerning the dispute over the quantity of the contaminated materials that
was to be removed. The Petitioner also now argues due to the late disclosure of Yarussi's bid that
the failure of Yarussi to supply information as to prior contracts and projects in its bid per SP-10,
No.11 constitutes a material omission rendering Yarussi's bid non-responsive. As a result, the
Petitioner argues that the Board should have accepted its bid in the sum of $8,949,550.00
(second lowest) and awarded them the contract.
Initially, the Court finds that Yarussi is a necessary party and directs that they be so added. Although Yarussi was not named they were served with the Order to Show Cause and Petition and did submit a responsive affidavit and appeared before Court on the return date. Given that time is of the essence in order to secure stimulus funding and no prejudice can be shown, the Court denies the Respondent's request to dismiss the Petition for failure to previously add Yarussi as a party. Further, such dismissal would be without prejudice and only prolong the proceeding jeopardizing the stimulus funding.
Generally, public contract bidding statutes are designed to foster competition so the municipality can obtain the best work and supplies at the lowest price and safeguard against favoritism, improvidence, extravagance, fraud and corruption (Jered Contracting Corp. v New York City Transit Authority, 22 NY2d 187 [1968]; Le Cesse Bros. Contracting, Inc. v Town Board of Williamson, 62 AD2d 28 [4th Dept 1978]). The law is clear that public authorities are required to advertise for sealed bids and award such contracts to the lowest responsible bidder (General Municipal Law § 103).
It is well settled that a municipality may decline bids which fail to comply with the literal requirements of the bid specifications, or it may waive a technical noncompliance with bid specifications if the defect is a mere irregularity and it is in the best interests of the municipality to do so (Le Cesse Bros. Contracting, Inc., supra). Noncompliance is considered material only when it would impair the interests of the contracting public authority or place some of the bidders at a competitive disadvantage (Cataract Disposal, Inc. v Town Bd. of Newfane, 53 NY2d 266 [1981]). Further, a governmental agency has the right to determine whether a variance from bid specifications is material or whether to waive it as a mere irregularity, and that determination must be upheld by the courts if supported by any rational basis (Eldor Contr. Corp. v Suffolk County Water Auth., 270 AD2d 262 [2nd Dept 2000]). [*2]
In the case at bar, we have reviewed all of the allegations of noncompliance and find that such defects were all mere irregularities of form or of a technical nature. Specifically, Yarussi's qualifications are well known to the Board in light of the fact that Yarussi had performed work during the initial phase of the Project. Further, the Board did not waive the requirement that the bids not contain any conditions, it merely allowed Yarussi to comply with such requirement after the bids were opened (see, Diamond "D" Constr. Corp. v County of Erie, 209 AD2d 922 [4th Dept 1994]). Significantly, the Petitioner failed to establish how those instances of noncompliance put any other bidder at a competitive or economic disadvantage and/or impaired the interests of the County Id. In fact, given that Yarussi's bid was over $20,000.00 lower than Petitioner's bid, it was in the best interests of the Board to award the contract to Yarussi.
Accordingly, the Petition is dismissed and the Temporary Restraining Order is vacated.
The signing of this Decision and Order shall not constitute entry or filing under CPLR 2220. Counsel is not relieved from the applicable provisions of this rule with regard to filing, entry and Notice of Entry.
This Decision constitutes the Order of this Court and shall be filed as such.
___________________________________
RALPH A. BONIELLO, III.
Supreme Court Justice
Dated:November 30, 2009
Niagara Falls, New York
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