AAA Carting & Rubbish Removal v. Town of Southeast 2011 WL 2222305 (Court of Appeals June 9, 2011) In a 5 to 2 decision, NY’s highest court struck down an award  by the Town Board of a bid for residential refuse removal services on the grounds that the Board based its award on subjective criteria not specified in the bid request. According to General Municipal Law Sec. 103 and Town Law Sec. 122, all contracts for public work must be awarded to “the lowest responsible bidder.” The purpose of these statutes are (1) the 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. Furthermore, it is well settled that the bidding statutes must be construed strictly in order to achieve those purposes. The bid documents stated that the bid was to be awarded to the lowest bidder. However, the Town Board awarded the bid to the second low bidder based on qualitative criteria of safety and reliability which were not stated in the bid documents.  The Town in essence found that the second low bidder was more responsible than the low bidder which the court held was impermissible. The court held that, however well intentioned, the Board could not base its award upon criteria not contained in the bidding proposal, and that the record before the Town Board was “devoid of good reason for rejecting the low bid.”  Furthermore, nowhere was it stated by the Board that the low bidder was not a responsible bidder. As one might expect, the papers submitted by the Town in the litigation made several arguments that the low bidder was not responsible. The Court stated “However, these arguments were never raised on the record prior to rejecting [the low] bid. In fact, these arguments were only raised after [the low bidder] brought this petition and therefore cannot be considered by this Court.” Interestingly, one of the Board members stated in his affidavit that the second low bidder had been selected because it was “more qualified, more ‘responsible and responsive’ and who will provide a higher level of service at a slightly higher monthly cost over the apparent low bidder.” The court noted that this slightly higher cost would have resulted in an additional cost of $857,115 over the contract’s three-year period, and an additional $571,410 if the contract were extended. (Most taxpayers would not consider $1.4 million to be pocket change.) The court therefore concluded that the Town Board acted arbitrarily, capriciously and in violation of the applicable bidding statutes in failing to award the contract to the low bidder. Lastly, the Court stated that if the Town wanted to consider various subjective criteria its proper remedy was “to reject all the bids submitted and begin the process anew, incorporating whatever reasonable and nonrestrictive (which is an issue unto itself) requirements it wishes to consider into the bid solicitation.” Note: This is a solid decision by the Court which upholds the letter and intent of the public bidding laws. To have held otherwise, as argued by the dissent, would be to allow public owners to creatively circumvent the open bidding process, and give rise to the inevitable speculation that favoritism and other negative factors had played a role in the decision making.