Opinion
August 4, 1994
Appeal from the Supreme Court, Albany County (Bradley, J.).
Respondent Facilities Development Corporation (hereinafter respondent) sought and received bids for certain general construction work to be performed at Rochester Psychiatric Center in Monroe County. Petitioner's bid, though the lowest, was rejected because petitioner had not demonstrated its ability to competently perform the work to be done, and was therefore considered not to be a responsible and reliable bidder (see, McKinney's Uncons Laws of N.Y. § 4409 [2] [g] [ii] [Facilities Development Corporation Act; L 1968, ch 359, as amended]). Petitioner thereafter commenced this CPLR article 78 proceeding seeking to overturn respondent's rejection of its bid as arbitrary, capricious and without rational basis. Dismissal of the petition by Supreme Court prompted petitioner to appeal.
Petitioner's claim that it was denied procedural due process is unavailing for a "formal trial-type hearing" is not necessary; what is required is that the bidder receive notice of the reason for the rejection and an opportunity to refute the findings upon which it is based (see, Matter of Schiavone Constr. Co. v Larocca, 117 A.D.2d 440, 443, lv denied 68 N.Y.2d 610; cf., Matter of LaCorte Elec. Constr. Maintenance v. County of Rensselaer, 80 N.Y.2d 232, 236-237). At the preaward conference, petitioner was notified that its submissions were not in compliance with the bid specifications in several respects and, accordingly, that it had not adequately demonstrated that it was a responsible and reliable contractor. At that time, petitioner was afforded an opportunity to submit documentation to cure the defects. Then, after the bid was formally rejected, petitioner was granted an informal hearing, the transcript of which is included in the record, at which it attempted, inter alia, to explain the negative references it had received. Thus, petitioner was afforded all the process that it is due under these circumstances.
As to the merits of the rejection itself, we find that petitioner has not met its burden of showing that respondent had no rational basis for its decision (see, Matter of Yorktown Auto Body Works v. State of New York Dept. of Transp., 166 A.D.2d 837, 838; Matter of Stacor Corp. v. Egan, 122 A.D.2d 480, 481). The record reveals that respondent based its determination on several factors, among them petitioner's failure to comply with bid specifications that required proof of completion of three projects of comparable scope, value, and complexity, and disclosure of all serious OSHA violations within the past five years. The failure to disclose several OSHA violations is a material misrepresentation which, despite petitioner's characterization of its omission as a "clerical error", provides sufficient support, alone, for respondent's determination (see, Matter of Brereton Assocs. v. Regan, 94 A.D.2d 886, 887, affd 60 N.Y.2d 807).
A further reason for rejecting the bid was respondent's conclusion that petitioner had not demonstrated "the business and technical organization, plant, resources, financial standing or business experience" needed to perform the contract as specified (McKinney's Uncons Laws of N.Y. § 4409 [2] [g] [ii] [Facilities Development Corporation Act; L 1968, ch 359, as amended]), because it lacked a reasonable plan for hiring and checking the qualifications of the workers necessary to comply with the requirement that 25% of the work be performed by the bidder's own employees. This finding was bolstered by information received by respondent from petitioner's prior clients, which indicated that petitioner did not ordinarily perform any significant amount of the work itself and had, on one occasion, engaged in maneuvers, such as "buying out" subcontracts, "to increase apparent participation".
Respondent's notes from its interviews of the references furnished by petitioner also make evident that petitioner has at least a checkered history with respect to performance, another rational basis for rejecting its bid (see, Matter of Futia Co. v Office of Gen. Servs., 39 A.D.2d 136, 137). Several previous clients indicated that the project manager or superintendent provided by petitioner was "very poor" or "weak", and had either been fired or quit before the job was completed. Some contained comments such as "it's been a battle" and, with respect to organizational ability, "it looks good on paper but is not really there in actuality". Petitioner's attempt, at the hearing, to explain away some — but not all — of these negative references cannot be said to have rendered respondent's reliance upon them wholly irrational. In short, there is ample record support for respondent's determination that petitioner was not, for the purposes of the contract at issue, a responsible and reliable bidder.
Lastly, with regard to petitioner's assertion that respondent failed to comply with the hearing provisions and rulemaking procedures contained in the State Administrative Procedure Act, this argument, having been made for the first time on appeal, is not properly before this Court (see, Matter of Manhattan Indus. v. Tully, 88 A.D.2d 737, 738).
Mikoll, J.P., Crew III, White and Weiss, JJ., concur. Ordered that the judgment is affirmed, without costs.