In May 2024, a trial court in New York upheld the rejection of a low bid on a New York City Housing Authority (NYCHA) project due to the contractor’s failure to include two letters of assent from its subcontractors. Framan Mechanical, Inc. v. New York City Housing Authority, 2024 NY Slip Op 31688 (Sup. Ct. N.Y. Cnty.).
In Framan, a contractor was low bidder on a boiler replacement NYCHA project. However, NYCHA rejected the bid as non-responsive for the sole reason that Framan neglected to include letters of assent from its subcontractors as required in the request for quotation (RFQ). In refusing to vacate NYCHA’s bid rejection, the court found that because the RFQ warned bidders that failure to include the letters of assent would result in a bid being declared non-responsive, it had a rational basis for rejecting it. The court further agreed with NYCHA that, because the letters of assent were material to the bid, failure to provide them was not a mere non-material error as argued by Framan.
Comment:
Courts in New York routinely uphold the rejection of competitive bids where they fail to comply with the literal requirements of bid specifications. That is because public agencies have discretion to reject bids that do not comply with their competitive bid requirements. Thus, absent unfair dealing or an abuse of discretion, courts will not interfere with an agency’s management of its bid operations. Accordingly, contractors should never assume that various bid requirements are non-material and therefore not necessary to address in their bid package or that certain requirements can be addressed after a bid opening. Instead, contractors should always err on the side of caution and comply with each literal requirement of an RFQ.
About the author: George Marco is an attorney practicing in the field of construction law. He also holds a Bachelor of Science in Mechanical Engineering and was previously employed as a Project Manager for a public improvement contractor.
If you would like more information regarding this topic or any other related to construction law please contact George Marco at george@gmarcolaw.com or call (516) 464-2320.
Disclaimer: This article is for informational purposes only and not intended to serve as legal counsel.
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