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Decision No. 13,215

Appeal of WESTERN NEW YORK COMPUTING SYSTEMS, INC./MICROAGE from action of the Board of Cooperative Educational Services for Onondaga, Cortland and Madison Counties and Computerland, Inc. regarding the awarding of a contract.

Decision No. 13,215

(July 12, 1994)

Boylan, Brown, Code, Fowler, Randall & Wilson, Esqs., attorneys for petitioner, James E. Metzler, Esq., of counsel

Bond, Schoeneck & King, Esqs., attorneys for respondent BOCES, Thomas D. Keleher and Thomas M. Shephard, Esqs., of counsel

Zeichner, Ellman & Krause, Esqs., attorneys for respondent Computerland, David B. Chenkin and Barry J. Glickman, Esqs., of counsel

SOBOL, Commissioner.--Petitioner appeals respondent board's award of several purchase contracts to respondent Computerland, Inc. The appeal must be dismissed.

In November 1993, respondent BOCES requested bids for the purchase of personal computers, related hardware, software and services. The request for bids included specifications for a variety of products under four different headings. Section I covered computer systems. Section II requested bids for peripheral equipment including monitors, printers and plotters. Section III covered support services, and Section IV involved leases and lease/purchase options. Within each of those sections, groupings of computer products were listed, and it was on each of those groups that contract awards would be made.

The bid request asked vendors to submit bids based upon a percentage reduction off of a manufacturer's suggested retail price ("discount off list"). The request also permitted the submission of alternative bids, which might include different pricing methods and the acceptance of "equivalent bids where it is determined to be in the best interest" of BOCES.

On December 7, 1993 respondent opened 14 bids submitted by various vendors. Not all vendors bid on every computer product group. Five of the fourteen vendors, including petitioner and respondent Computerland, submitted bids using an alternative pricing method based on a percentage or margin over the vendor's cost or "cost plus" pricing. (The parties agree that costs of products to petitioner and respondent Computerland are essentially the same and that any difference in their cost plus bids reflects the difference in the vendors' margin). Because respondent BOCES was not familiar with cost plus pricing, on December 23, 1993, it requested clarifying information on the cost plus bids from the vendors who submitted such bids. Vendors were not allowed to submit new or altered bids, but were only allowed to submit information to assist respondent BOCES in reviewing the previously submitted cost plus bids.

On January 7, 1994 respondent BOCES opened all submitted clarifying information. The information was reviewed, and on January 20, 1994 respondent BOCES awarded contracts for computer products to nine different vendors, including petitioner and respondent Computerland. No contracts were awarded for items listed in Sections III and IV of the request for bids. Of the approximately 110 computer product groups in Sections I and II, respondent awarded 49 contracts to Computerland. Of those 49 contracts, 35 were awarded on a discount off list basis and 14 were awarded on a cost plus basis. This appeal ensued.

As a preliminary matter, petitioner has for the first time raised new issues in its memorandum of law. However, a memorandum of law may not be used to belatedly add assertions which should have been included in the petition (Appeal of Executone Northeast, Inc., 29 Ed Dept Rep 18; Matter of Bd. of Ed., Broadalbin CSD, 24 id. 51; Appeal of Johnson, 26 id. 42). Accordingly, the new assertions contained in petitioner's memorandum of law will not be considered in reviewing the merits of this appeal.

The letting of public contracts is governed by Article 5-A of the General Municipal Law, which requires that a municipality advertise for bids and award purchase contracts in excess of $10,000 to the lowest responsible bidder (General Municipal Law '103(1)). The public bidding statutes were enacted for the benefit of taxpayers, not for the benefit or enrichment of bidders, and should be construed and administered as to accomplish such purpose fairly and reasonably with sole reference to the public interest (Jered Contr. Corp v. New York City Tr. Auth., 22 NY2d 187; LeCesse Bros. Contr. v. Town Bd. of Williamson, 62 AD2d 28, 34-35, aff'd., 47 NY2d 960). Those statutes were designed with the dual purpose of fostering honest competition so that the municipality might obtain the best work and supplies at the lowest possible prices and also to guard against favoritism, improvidence, extravagance, fraud and corruption (Jered Contr. Corp v. New York City Tr. Auth., supra; LeCesse Bros. Contr. v. Town Bd. of Williamson, supra.; Matter of Sweet Assoc. v. Gallman, 36 AD2d 95; aff'd 29 NY2d 902).

Although it is not entirely clear, petitioner seems to contest the 14 contracts awarded to respondent Computerland on a cost plus basis. Petitioner contends in a confusing manner that respondent BOCES did not award the disputed contract on either a discount off list basis or a cost plus basis, but on a unit price basis. Petitioner then argues that the unit pricing used by respondent Computerland was based on a cost plus factor of 9.78%. Petitioner also maintains that when analyzed, the unit prices cited by respondent Computerland reflect a cost plus 6.2%, which was allegedly rejected by respondent BOCES and is inconsistent with Computerland's awarded bid of cost plus 9.78%. Finally, since petitioner's bid was cost plus 6.45% versus Computerland's bid of cost plus 9.78%, petitioner was the lowest bidder and entitled to be awarded the contracts in question.

However, the record does not support petitioner's contentions and it appears petitioner has misunderstood the content of the bid submitted by respondent Computerland. There is simply nothing in the record to support petitioner's contention that the contracts in question were awarded on a unit price basis. Indeed, it is clear that the disputed contracts were awarded on a cost plus basis. While the bid submitted by respondent Computerland does mention a cost plus rate of 9.78%, it is clear that the cited figure refers to a "blended" rate which is the average of the cost plus percentage for all of the bids it submitted in each of the categories established by the BOCES in its request for proposals. That "blended" rate would apparently only take effect if Computerland was awarded most of the contracts on which it submitted bids.

The bid submitted by Computerland provided a comparison of prices of representative items under the discount off list approach and the cost plus approach. In its bid, the cost plus percentage varied for each product group. For instance, the cost plus percentage for systems was 6.2% while the cost plus percentage for certain printers was 11.2%. The record indicates that BOCES awarded contracts to Computerland which Computerland had bid at a cost plus rate of 6.2% versus petitioner's rate of 6.45%. As noted above, petitioner's costs are the same as Computerland. Accordingly, petitioner was not the lowest bidder and I find no basis to annul the contracts in question.

Petitioner also contends that BOCES improperly compared prices submitted by it to prices submitted by Computerland. Specifically, petitioner contends that BOCES compared prices submitted by Computerland on "bare bones" systems versus prices on "fully featured" systems submitted by it. In light of the fact that the contracts in question were awarded on a cost plus basis, I find that argument irrelevant. As noted above, neither vendor had a cost advantage over the other. Therefore, the only relevant comparison was the percentage factor used by the vendors. Variations in individual models quoted is immaterial.

Petitioner also maintains that BOCES awarded contracts to Computerland for products for which it did not submit a bid. In an appeal to the Commissioner of Education, the petitioner has the burden of establishing the facts upon which it seeks relief (Appeal of Cerilli, 33 Ed Dept Rep 385; Appeal of Pickreign, 28 id. 163). Petitioner's conclusory allegation on this issue is denied by respondents. Since petitioner has not provided any evidence to establish that allegation, it has not met its burden of proof and the petition must be dismissed.

I have reviewed petitioner's remaining contentions and find them without merit.

THE APPEAL IS DISMISSED.

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