By Order to Show Cause dated February 22, 2011 (Hummel, J), petitioner Dan's Hauling & Demo, Inc. (hereinafter, Dan's Hauling), seeks and Order annulling the respondent City of Troy's (hereinafter, "the City") determination to award a demolition contract to respondent DiTonno & Sons LLC (hereinafter, DiTonno). Oral argument was held on March 10, 2011. Thereafter, the Court permitted additional submissions to address certain issues raised during oral argument.

The work at issue in this proceeding is the demolition of Troy's former City Hall. On November 16, 2010, the City issued its Invitation to Bid wherein it requested bids from qualified contractors able to provide, inter alia, a demolition plan, asbestos abatement and building decontamination, demolition, and removal of materials from the demolition site.Relevant to this dispute, in the general instructions to bidders the City explained:

The contractor who is awarded the bid for this project must demonstrate his competency in demolition and asbestos abatement with respect to buildings of this type and size. The contractor must demonstrate having complete, or is in the process of completing, at least 4 projects of similar scope within the last six years. The contractor who has been awarded the bid shall be asked to provide an outline of experience. The outline will also include personnel licensed to handle asbestos abatement. The contractor shall list his professional engineer that will provide guidance where needed during the demolition process to ensure the structural stability in various members.

"requires that all contractors must be bondable and insured and that the low bidder files both a Performance Bond and a Labor and Materials Bond for the full amount of the contract. Arrangements should be made with a surety company prior to submitting a bid. The Contract will be completed only after the bid has been awarded

(Id.).The bid instructions explained that the bid had to include the bid proposal, the non-collusive bidding certification, a bid bond (securing 5% of the bid amount), and a certificate of insurance.

Both Dan's Hauling and DiTonno submitted bids on December 14, 2010. Indisputably, DiTonno's bid was approximately 10,000.00 less than Dan's Hauling's bid. On December 31, 2010, the City awarded to bid to DiTonno. Although the submissions do not include a copy of the signed agreement by and between the City and DiTonno, it appears to be undisputed that DiTonno commenced work on the project on December 31, 2010.

In this CPLR Article 78 proceeding, Dan's Hauling claims that the City's determination to [*2]award the contract to DiTonno was arbitrary and capricious. It contends, more specifically, that the City allowed DiTonno " to change its scope of work that was required in the bid documents when it was allowed to perform demolition prior to asbestos abatement" (Petition ¶ 14, Exhibit G). Further, it contends that the City showed favoritism because DiTonno did not have meet the experience requirements set forth in the bid documents (Petitioner ¶¶ 18-25).Finally, petitioner argues that the City's apparent determination to waive the requirement that DiTonno provide a performance and labor and materials bond was a material deviation from the bid specifications^[FN1].

General Municipal Law §103 provides that certain contracts for public work and purchases must be competitively bid. The purpose of the competitive bidding laws is

" to guard against favoritism, improvidence, extravagance, fraud and corruption.' *** These laws were not enacted to help enrich the corporate bidders but, rather, were intended for the benefit of the taxpayers. They should, therefore, be construed and administered with sole reference to the public interest'. *** This public interest, ... is sought to be promoted by fostering honest competition in the belief that the best work and supplies might thereby be obtained at the lowest possible prices.

The law does not permit continuous, private negotiation of publicly bid contracts (Sinram-Marnis Oil Co. v. New York 74 NY2d 13, 18 [1989]). "Instead, a bidder is expected to submit its best offer and either stand by it or, after the firm offer period has expired, withdraw the bid..." (Id.). Accordingly, the law prohibits post-bid modifications to bids that result in increased costs to the municipality (Id.). Similarly, although post-bid negotiations with the low bidder in order to obtain price concessions may occur, "a municipality may not ease contract specifications after bids have been submitted ...*** Were it otherwise, legitimate bidders, who might have been willing to reduce their bids had they known that the specifications of the job would be relaxed, would be unfairly deprived of the opportunity to do so" (Fischbach & Moore, Inc. v. New York City Transit Authority, 79 AD2d 14 [1981] lv. den. 53 NY2d 604).Finally, although a municipality may, post-bid, waive "technical non-compliance" with its specifications, it cannot excuse "material and substantial" variations between the bid and the specifications (Le Cesse Bros. Contracting, Inc. v. Town Board of Williamson, 62 AD2d 28, 32 affd 46 NY2d 960 ). "Judicial review of an agency's decision denying or awarding a contract is limited to ascertaining whether there is a rational basis to support the agency's determination' ***, and the burden of proof rests with the party challenging the decision" ( E.W. Tompkins Co. v. State Univ. of NY, 61 AD3d 1248 [2009] [cit. om.])

Here, petitioner contends that the City allowed DiTonno to start demolition work before asbestos abatement. In support of this claim, petitioner submits newspaper articles reporting that demolition work had begun on December 31, 2010 and a Notice of Violation issued by the New [*3]York State Department of Labor on January 20, 2011 indicating that the State's inspector observed that, "[a]sbestos containing material was not abated prior to demolition activities" (Exhibit H). Petitioner contends that this was a change in the scope of the work described in the bid documents and that if the project had continued, the cost of the project would have been less, to DiTonno's sole benefit.

The municipality has the authority to determine whether a variation is a material one or merely a permissible irregularity (Hungerford & Terry, Inc. v. Suffolk County Water Auth., 12 AD3d 675 [2004]). A variation is material only if it would "impair the interests of the contracting public authority or place some of the bidders at a competitive disadvantage" (Id.). In this Court's view, the record does not support petitioner's argument that there was a material variation between the bid and the specifications. As set forth above, it is undisputed that DiTonno was the low bidder. Also undisputed is that some work on the demolition project did begin on December 31, 2010.The City's engineer explains, however, that the work was performed because the City's engineering department determined that some investigatory work was necessary to establish field conditions. Further, he avers that this work did not have a material impact on the cost of the work and that DiTonno did not receive any additional compensation for the work. Based on Mr. Reeves's affidavit, the Court finds that there was a rational basis for the City's determination that the work was not a material variation from the bid specifications.

As set forth above, petitioner also claims that the City's determination to select DiTonno was arbitrary and capricious and showed favoritism because DiTonno was not qualified to submit a bid. . The determination that a bidder has the requisite experience to complete a job will be upheld so long as a rational basis exists for the determination (Suit-Kote Corp. v. City of Binghamton Bd. of Contract & Supply, 216 AD2d 831, 833 [1995]). Here, the Invitation to Bid was clear that once selected, the successful bidder would have to demonstrate its qualifications. In this regard, the City's engineer explains that once DiTonno was determined to be the low bidder, the City met with its representatives to discuss the project. According to Mr. Reeves, respondent selected DiTonno, in part, because it "partnered with a nationally recognized engineering firm" that had extensive experience with demolition of structures like City Hall. In this Court's view, Mr. Reeves's affidavit provides a rational basis for the City's determination that DiTonno was qualified to perform the bid work.

The Court reaches a different conclusion, however, with regard to the City's apparent determination to waive the requirement that the successful bidder provide a performance and payment bond. The City advises that DiTonno filed a "Certificate of Liability Insurance for Professional Liability Coverage" and that, pursuant to the sample contract provided with the bid package, DiTonno only had to provide a "performance bond and a labor/materials bond" if it did not provide the professional liability policy (see Sample Contract, Article 9; Sarris Correspondence dated March 10, 2011 and March 14, 2011 ). As set forth above, the bid documents are clear that the successful bidder would be required to provide a performance and payment bond. Further, to the extent Article 9 of the sample contract appeared to conflict with this requirement, the City issued an addendum in response to bidders' questions as follows:

Q:"23. Article 9 states that if the contractor fails to submit a Professional Liablity insurance policy, they are to provide a 100% labor/material and a 100% labor bond. Aren't [*4]performance and labor/material bonds already required?

A:"Performance and labor/material bonds are required for this project.

Moreover, on this project, the DiTonno was statutorily required to provide a labor and materials payment bond and the City has no authority to waive this mandate (State Finance Law §137; A.C. Legnetto Constr. v. Hartford Fire Ins. Co., 92 NY2d 275 [1998]; Dutchess Quarry & Supply Co. v Firemen's Ins. Co 190 AD2d 36 [1993]).This change, if allowed, is a material one because, absent proper bonding, the City's interests are not protected on this project. Further, the unsuccessful bidders properly included the cost of obtaining bonds in their bids, thus, they were at a competitive disadvantage.

Finally, notwithstanding the foregoing, the Court finds that the record fails to provide sufficient support for petitioner's claim that the contract was awarded in violation of the City's ordinance, rules, or regulations.

Accordingly, based on the foregoing, it is

ORDERED AND ADJUDGED, that the petition is granted, UNLESS within ten days from the date of service of this Decision and Order, with Notice of Entry, respondent DiTonno provides a performance bond and labor/materials bond in the form set forth in the Invitation to Bid dated November 16, 2010; and it is further

ORDERED AND ADJUDGED that if respondent DiTonno fails to provide a performance and labor/materials bond in the form required within the above time frame, the City must re-issue an invitation to bid for the remainder of the demolition work.

This Memorandum constitutes the Decision and Order of the Court. This Original Decision and Order is returned to petitioner's attorney. The below referenced original papers are being mailed to the Rensselaer County Clerk. The signing of this Decision and Order shall not constituted entry of filing under CPLR 2220. Counsel is not relieved from the provision of that rule regarding filing, entry, or notice of entry.

SO ORDERED

ENTER

Dated:Albany, New York

,2011

_____________________________________Michael C. Lynch

Justice of the Supreme Court

Papers Considered:

(1)Order to Show Cause dated February 22, 2011 (Hummel, J), with Verified Petition and Exhibits A-H, Affidavit in Support (Daniel G. Wolfe), Affirmation in Support (John J. Bove, Esq.) and Memorandum of Law;

(2)Attorney Affidavit in Opposition sworn March 7, 2011 (Lia B. Mitchell, Esq.) with Exhibits A-E (including Affidavit of Russell Reeves at Exhibit B, Memorandum of Law in Opposition;

(3)Affidavit sworn March 10, 2011 (Michael Ames);

(4)Sur-Reply Affidavit in Support sworn March 10, 2011 (Daniel G. Wolfe); [*5]

(5)Affidavit sworn March 10, 2011 (Michelle Marks);

(6)Correspondence dated March 10, 2011 (Charles Sarris), Correspondence dated March 14, 2011 (Charles Sarris), Correspondence dated March 14, 2011 (John Jay Bove, Esq.), Correspondence dated March 15, 2011 (Robert Rausch, Esq.), Correspondence dated March 15, 2011 (John Jay Bove, Esq.), Correspondence dated March 15, 2011 (Charles Sarris, Esq.);

(7))DiTonno's Verified Answer to the Petition dated March 10, 2011; City of Troy's Verified Answer dated March 14, 2011.