SEABURY CONSTRUCTION CORP VS DEPARTMENT OF ENVIRONMENTAL PROTECTION
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SEABURY CONSTRUCTION CORP. VS. DEPARTMENT OF ENVIRONMENTAL PROTECTION
The price preference program for minority-owned and woman-owned business enterprises and qualified joint ventures in public works procurement projects with the City of New York was declared invalid by the New York State Supreme Court of New York County.1 The City had implemented a price preference procurement program under the authority of the New York City Charter (“NYC Charter”), which generally requires that all competitive procurements using sealed bids be awarded to the lowest responsible bidder. Section 313(b)(2) of the NYC Charter has an exception to the general rule:
The agency letting the contract … shall … award the contract to the lowest responsible bidder, unless the mayor shall determine … that it is in the best interest of the city that a bid other than that of the lowest responsible bidder shall be accepted.
In 1991, a new NYC Charter section was added which required the Department of Business Services to promulgate rules to ensure meaningful participation of minority-owned and woman-owned businesses in the City’s procurement procedures. The rules which were promulgated established a 10 percent “target percentage” for minority-owned and woman-owned businesses, and qualified joint ventures. If a bid from a minority-owned or woman-owned business, or a qualified joint venture was not the lowest bid, but was within the target percentage of the lowest bid, then the purchasing agency would forward that bid and the lowest bid to the Mayor for a determination as to whether it was in the best interest of the City to award the contract to other than the lowest responsible bidder.
In early 1993, the Department of Environmental Protection awarded three projects to two companies that were qualified joint ventures. The lowest responsible bidder for these contracts had been submitted by Seabury Construction Corporation (“Seabury”). The two companies awarded the contracts submitted bids which were higher than Seabury’s bids, but were within the 10 percent “target percentage.” The City’s Chief Procurement Officer, acting for the Mayor, had determined that it was in the City’s best interest to accept the higher bid from the qualified joint ventures.
Seabury then sued the City, claiming that NYC Charter § 313(b)(2) violated section 103(1) of the General Municipal Law (“GML”). The relevant part of GML § 103(1) reads as follows:
Except as otherwise expressly provided by an act of the legislature or by a local law adopted prior to September first, nineteen hundred fifty-three, all contracts for public work involving an expenditure of more than twenty thousand dollars … shall be awarded by the appropriate officer, board, or agency of a political subdivision … to the lowest responsible bidder….
The court turned its attention to NYC Charter § 313(b)(2) in an effort to determine whether that section of the NYC Charter was adopted prior to September 1, 1953. However, both counsel and the court appear to have overlooked a key statutory construction analysis which could have provided a colorable, though likely unsuccessful, argument contrary to the court’s conclusion.
GML § 103 was enacted in 1953.2 The relevant part of the original statute read as follows:
Except as otherwise expressly provided by an act of the legislature, or except in an emergency, all contracts for public work involving an expenditure of more than twenty-five hundred dollars … shall be awarded by the appropriate officer, board, or agency of a political subdivision … to the lowest responsible bidder….
The phrase, “or by a local law adopted prior to September first, nineteen hundred fifty-three” is conspicuously absent from the original legislation. The department memorandum relating to the bill includes the following remarks:
The primary objective of this bill is to harmonize and to extend the application of laws relating to public bidding on contracts let by counties, cities, towns, villages, school districts and district corporations….
Section 103 will apply “except as otherwise expressly provided by an act of the legislature”. The quoted phrase was inserted in view of provisions in city charters and other laws of limited application which may prescribe different requirements with respect to public bidding.”
The law was then amended in 1955.3 The amended law read as follows:
Except as otherwise expressly provided by an act of the legislature or by a local law adopted prior to September first, nineteen hundred fifty-three, or except in an emergency, all
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Local government in the United Kingdom, Local government in the United States, Municipal charter, Urban studies and planning
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