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Decision No. 14,170

Appeal of BIRNIE BUS SERVICE INC. from action of the Board of Education of the City School District of the City of Auburn and National School Bus Service, Inc. regarding a transportation contract.

Decision No. 14,170

(July 22, 1999)

Meggesto, Crossett & Valerino, attorneys for petitioner, James A. Meggesto, Esq., of counsel

Charles A. Marangola, Esq., attorney for respondent school district

Phillips, Lytle, Hitchcock, Blaine & Huber, attorneys for respondent National School Bus Service, Preston Zarlick, Esq., of counsel

 

MILLS, Commissioner.--Petitioner Birnie Bus Service, Inc. ("Birnie") appeals the decision of the Board of Education of the City School District of the City of Auburn ("respondent board") to award a transportation contract to National School Bus Service, Inc. ("respondent NSB"). The appeal must be dismissed.

Petitioner had provided transportation and vehicular maintenance to the City School District of the City of Auburn ("district") since July 1990. In January 1997, respondent board issued a request for proposals ("RFP") for its pupil transportation and vehicular maintenance contracts for three years beginning with the 1997-1998 school year. While the district had previously used a "cost per bus" basis to determine the home-to-school pupil transportation contract, the new specifications called for bids on a "time" basis. For example, under its previous contract with petitioner for 1996-1997, the district had paid a set rate per bus regardless of the amount of time the bus was used during the day. In contrast, for the 1997-1998 school year, the district decided to determine the hours required for pupil transportation and the minimum number of buses required to fulfill those time requirements, and to award the new contract based on the total hours those buses were required to be in use. On January 17, 1997, respondent held a pre-bid meeting, at which John Warren, petitioner’s representative, was present. At that meeting, Jeanette Netti, the district’s transportation supervisor, and Dr. Richard Ahola, the district’s transportation consultant, reviewed the new specifications.

Petitioner and NSB, among others, submitted bids that were publicly opened on February 5, 1997. NSB’s bid was the lowest for pupil transportation, but its bid for vehicular maintenance was higher than petitioner’s. The following table reflects petitioner’s and NSB’s bids:

NSB

NSB Base

bid +

Maintenance

Birnie

Birnie Base bid + Maintenance

Year 1

Base bid

$904,500.00

$929.157.50

$976,311.08

$994.515.36

Year 2

Base bid

$909,720.00

$934,377.50

$1,005,600.42

$1,023,804.70

Year 3

Base bid

$914,940.00

$939,597.50

$1,035,768.32

$1,053,972.60

Vehicu-lar Maint.

$35.00/hour or

$24,657.50/year

based on 704.5 hours

$25.84/hour or

$18,204.28/year

based on 704.5 hours

Six days later, petitioner’s representative John Warren, met with school superintendent William Miller. According to Mr. Warren’s affidavit, he asked the superintendent if the district’s routes were going to be different from those currently utilized, and Mr. Miller responded that to his knowledge, there were no changes anticipated. Mr. Warren states that he then informed Mr. Miller that the bid specifications encompassed significantly more transportation service than was currently being provided. Mr. Warren states further that they also discussed petitioner’s proposed renewal offer allegedly tendered August 14, 1996, which included a 0% increase for the first year, and petitioner’s willingness to perform the maintenance contract.

By letter dated March 3, 1997, prior to the contracts’ award, petitioner’s counsel wrote to respondent board’s counsel. That letter indicated that the scope of routing in the RFP was significantly different than that currently used, and in fact, represented a 30% overstatement of the work to be performed. Petitioner’s counsel suggested rejecting all bids and readvertising for new bids.

On March 11, 1997, respondent board awarded contracts for both pupil transportation and vehicular maintenance to NSB. This appeal ensued. Petitioner’s request for interim relief was denied on April 21, 1997.

Petitioner contends that all bids for pupil transportation should have been rejected because there was a substantial and material mistake in the bid specifications of which respondent board was aware, namely, that the specifications grossly overstated the district’s actual transportation needs. Petitioner also asserts that it should have been awarded the contract for vehicular maintenance since its bid price was lower than NSB’s bid. Petitioner requests that I order respondent board to rebid the contract for transportation and award it the contract for vehicular maintenance.

More particularly, petitioner asserts that for the previous school year (1996-1997), the routes encompassed twenty 4-hour buses, two 5-hour buses and five 6-hour buses daily (120 hours/day). In comparison, the district’s bid specifications called for four 4-hour runs, eleven 5-hour runs and fourteen 6-hour runs (155 hours/day). Petitioner alleges that the bid specifications contain 35 unneeded hours/day or 30% more time than actually required. Petitioner then calculated NSB’s cost for each hour bus, and determined that under the previous 1996-1997 structure (what petitioner alleges is the district’s actual need), the cost would be at least $120,000 less than NSB’s bid price of $904,500. Petitioner also alleges that the bid specifications call for 10 extra unneeded runs/day and from 25 to 57 extra hours/day for time allotted for pre and post transportation checks, for travel time to and from the garage, early release and safety drills, and additional needs based upon speculative parochial school and zoning changes. Petitioner contends that 105 hours/year for safety drills, 216 hours/year for early release time, and travel time to and from the garage should not be chargeable. Petitioner asserts that neither Ms. Netti nor Dr. Ahola sought any advice or information from it regarding the current route structure or any proposed changes, as the district had done in the past. Petitioner contends that had they consulted Birnie, it would have informed the district about the excess hours, and how restructuring at the parochial school and redistricting could be accommodated without additional transportation services. Petitioner also claims that by overstating its needs in the specifications, respondent board deterred smaller companies who might have bid, hindered accurate cost analyses by bidders, and created excess taxpayer costs. Petitioner contends that paying for unnecessary work constitutes a gift of public funds in violation of the New York State Constitution, Article 8, "1.

Furthermore, petitioner asserts that the bidding process was so flawed that in effect, NSB was awarded the contract without having to bid competitively for the actual work to be performed. Petitioner also argues that whether NSB was the lowest responsible bidder is irrelevant because the bid specifications were so overstated that all bidders were adversely affected and the entire bid process was unlawful. In addition, petitioner asserts that respondent board acted arbitrarily, capriciously and contrary to the best interests of the taxpayers in awarding the contract to NSB. It alleges that respondent board failed to consider its renewal proposal at a lesser cost, failed to consider privatizing special education buses, and failed to award petitioner, whose bid was nearly $9/hour lower than NSB’s, the contract for vehicular maintenance. Petitioner maintains that respondent board awarded the maintenance contract to NSB in retaliation against petitioner after petitioner informed respondent board’s counsel on March 3 of its intent to seek review of the bid process. Finally, petitioner notes that the large discrepancy between NSB’s bid and the next lowest bid is suspect, because NSB’s bid was the only one close to the current contracted amount for services, even though the bid specifications called for increased services.

Respondents contend that petitioner lacks standing and has failed to meet its burden of proving that the bid specifications overstated the scope of work to be performed. Respondents assert that the award of the contracts for transportation and vehicular maintenance to NSB was reasonable and in the district’s best interests, and that the bid specifications accurately and unambiguously incorporate the pupil transportation needs of the district. According to respondents, Dr. Ahola and Ms. Netti developed the bid specifications after a thorough investigation of the district’s pupil transportation needs and the bid specifications contained the number of runs, the duration of each run, and the number of days of performance.

Respondents also assert that at the January 17 pre-bid meeting, Dr. Ahola discussed an error on page 9, paragraph 18c of the bid documents, concerning how the lowest bid was to be calculated. Respondents assert that thereafter, a corrected page 9 with an accompanying memorandum was furnished to all contractors and bidders.

Paragraph 18c originally read:

The base bid award will be based on the lowest qualified bid, the lowest bid being BASE BID Line Item 1(c) on "Form of Proposal". Determination of qualifications has been established in section 17 above.

It was corrected to read:

The base bid award will be based on the lowest qualified bid, the lowest bid will be calculated as explained by Footnotes 1 and 2 (pages 156, 157, and 162). Determination of qualifications has been established in Section 17 above.

Footnotes 1 (for the base bid) and 2 (for the alternate 1 bid) provide:

1. Award of contract will be based upon the predicted use of 4 four-hour buses, 11 five-hour buses, and 14 six-hour buses [emphasis added].

2. Award of contract will be based upon the predicted use of 4 four-hour buses, 7 five-hour buses, and 14 six-hour buses.

Respondents assert that NSB submitted its bid with the proper corrected page 9 inserted, but that petitioner submitted its bid with the original, incorrect page, and thus failed to comply with the bid requirements. Respondents argue that such failure renders petitioner’s bid unqualified and is a legitimate basis for the rejection of petitioner’s bid.

Respondents assert further that prior to the opening of the bids on February 5, 1997, no representative of petitioner stated that the specifications were incorrect, misleading or improper. Respondents assert that petitioner first expressed dissatisfaction over the bid specifications at the February 11 meeting between Mr. Warren and Superintendent Miller, six days after the bids were opened. Respondents contend that petitioner is alleging that the bid specifications are incorrect because petitioner needs this contract to offset anticipated losses from its low bid contract with another school district.

Respondents maintain that the bid specifications are clear in stating that the current routes, stops and time schedules are tentative, and are designed to allow it the flexibility to achieve low cost, prudent pupil transportation. Respondents assert that the district reserved the right to make changes to meet its actual needs, and retained in the bid specifications the right to establish bus routes, readjust routes and increase or decrease drivers and/or buses to prevent contracting for more buses than it may need. Furthermore, respondents maintain that NSB is the lowest responsible bidder.

I will first address the procedural issue of standing. Respondents assert that petitioner did not submit a qualified bid by its failure to include the correct page 9. In addition, respondents argue that petitioner was not the lowest bidder for either the base transportation contract or the maintenance contract. Respondents aver that the bid submitted by Montauk Bus Company, Inc., for maintenance was lower than that of petitioner, and the record indicates that Birnie was the highest bidder (of four) for the base transportation bid. Thus, respondents argue that petitioner is not aggrieved and lacks standing to maintain an appeal.

The technicality of submitting the wrong page 9 does not disqualify petitioner, especially since petitioner was able to adequately complete the bid proposal. As a bidder, petitioner has standing to bring an appeal of the bid process (Jerkens Truck & Equipment, Inc. v. Yonkers, 174 AD2d 127).

I turn now to the merits. It is well settled that contracts subject to competitive bidding shall be awarded "to the lowest responsible bidder" (Education Law "305[14]; General Municipal Law "103[1]). In an appeal to the Commissioner, the petitioner has the burden of demonstrating a clear legal right to the relief requested and the burden of establishing the facts upon which it seeks relief (8 NYCRR "275.10; Appeal of Acme Bus Corporation, 37 Ed Dept Rep 219, Decision No. 13848; Appeal of Catherine B., 37 id. 34, Decision No. 13797; Appeals of Lindauer and McKee, 34 id. 596, Decision No. 13421). Petitioner admits that its bid was not the lowest for transportation, and argues only that its bid was lower than NSB’s for maintenance. In fact, in neither case is petitioner the lowest responsible bidder. Accordingly, I find that petitioner has not met its burden of proof.

Furthermore, it is not a violation of the competitive bidding statutes to solicit separate bids but to award the entire project to the overall low bidder (Matter of National School Bus Service, Inc., 23 Ed Dept Rep 377, Decision No. 11252). Respondents maintain that when the transportation bid and the maintenance bids are combined, NSB’s bid is the lowest of all bidders and significantly lower than petitioner’s (see table, supra). The bid specifications provide that respondent board would take "bids on both full contract transportation and contract maintenance of the district-owned fleet" (page 15, section II, paragraph 11). However, there is nothing in the bid specifications that requires respondent board to award the contracts to different vendors. Indeed, at page 7, paragraph 12, the specifications provide in relevant part:

THE BOARD OF EDUCATION RESERVES THE RIGHT TO WAIVE WHAT IT DEEMS BIDDING OR SPECIFICATION INFORMALITIES RELATING TO A SPECIFIC BID, TO REJECT ANY AND ALL BIDS, TO RE-ADVERTISE AND INVITE NEW BIDS, OR TO ACCEPT THE WHOLE OR A PART OF A BID, OR TO ACCEPT PARTS OF BIDS FROM MORE THAN ONE BIDDER, AS IN THE BOARD’S JUDGMENT, IT DEEMS TO BE IN THE BEST INTEREST OF THE SCHOOL DISTRICT. [emphasis in original]

And, at page 14, section II (BID FOR PUPIL TRANSPORTATION), paragraph 4:

RIGHT OF THE BOARD OF EDUCATION TO AWARD CONTRACT. The Board of Education reserves the right to award contracts on the basis of overall advantages to the school district with respect to overall requirements. The Board of Education reserves the right to reject one or all bids.

Thus, respondent board had the option to reject any or all bids and award the contracts on the basis of overall advantages to and in the best interest of the district. Accordingly, it was neither arbitrary, capricious nor unreasonable for respondent board to award both the transportation and maintenance contracts to the same bidder, where it was to respondent’s advantage to deal with the same vendor (seeMatter of National School Bus Service, Inc., supra).

As I stated in Appeal of Acme Bus Corporation, supra,

This is not a case where the rules were changed during the bidding process, or where the respondent adjusted and recomputed the bids using a different set of standards (see, Matter of Coram Bus Service, Inc., 23 Ed Dept Rep 493). In contrast to Coram, this is not a case where "the bid proposal and specifications are so indefinite that they deprive prospective bidders of the opportunity to submit responsive bids based on their actual costs."

In the instant case, petitioner admits that the bid specifications are unambiguous and clear, and that it submitted its bid based on the routing structure embodied in the specifications. Instead, petitioner argues that "the statement from Mr. Miller is the genesis of this appeal . . . if there are no significant changes in transportation needs, then the greatly inflated specifications for service are seriously in error." Although petitioner demonstrates differences between the specifications and the work it performed during the 1996-1997 school year, its allegations that the specifications grossly overstate the district’s needs for the 1997-1998 school year (and subsequent years) are speculative. Petitioner fails to meet its burden of proving that the actual scope of work needed by the district for the 1997-1998 school year is significantly different from the scope of the bid specifications. Petitioner supplies only the statement by Mr. Miller that to his knowledge, there were no anticipated changes in routing, whereas respondent board maintains that the bid specifications are precise and address its needs. Moreover, respondent board asserts that the bid specifications clearly reserved its right to make changes to meet the district’s actual needs.

In addition to the portions of the bid specifications cited above, other sections contain language giving respondent board flexibility. Specifically, page 14, section II, paragraph 2, also provides in part:

The Board of education [sic] reserves the right to award the contract for a one, two or three year period and to reject any or all bids if it deems such action to be in the best interest of the district.

Page 17 section III (ROUTING AND SCHEDULING), paragraphs 3 and 4, provide in part:

3. The routes, stops and time schedules are tentative and may be changed at the option of the Board of Education . . ..

4. (a) Whenever the bus requirements, as determined by the School District, increase to the degree that additional drivers and/or buses are required due to readjustments of existing routes, the Bidder shall provide additional drivers and/or buses as required. These additional services shall be furnished at the bid price.

(b). Conversely, if transportation requirements should change to the degree that one or more drivers and/or buses need not longer be utilized, costs shall be reduced in the manner indicated in Section II, paragraph "4(a)" above . . . .

(c). The determination of lowest responsible bidder will be made on the basis of the proposed routes (emphasis added).

Page 26, Section X (ADDITION OR DELETION OF BUSES), provides:

1. After the bid is awarded, the Auburn Enlarged City School District Board of Education and/or administration reserves the right to add or delete buses from the number originally needed for regular to-and-from school transportation. The total contract cost will be adjusted using the per-bus prices provided by the bidder on the bid forms . . .

Page 27 Section XI (ROUTE SCHEDULING), paragraph 2, provides:

The District reserves the right to change any and all routes, times routes are to be operated, bus stops, and other such adjustments that conditions may necessitate without additional compensation to the contractor except as provided in the Bid Proposal.

Also, bidders were required to set forth the ‘add’ or ‘delete’ price for the addition or elimination of a route where applicable (pages 154 and 156). And, the "form of proposal" on page 155 states that the number of buses for the base bid is estimated at 29 (emphasis added). (See also page 162, footnotes 1 and 2, cited in text at page 17, supra.)

Based on the record, I find no evidence that respondent board failed to comply with the bid specifications in awarding the contracts for transportation and maintenance to NSB. Nor is there evidence in the record of fraud or collusion by NSB or respondent board, as alleged by petitioner. In addition, I find that petitioner failed to meet its burden of proving that the bid specifications were ambiguous, improper or misleading. Petitioner’s allegations that the bid specifications do not meet the needs of the district are speculative and assume evidence not in the record. Moreover, I find that the bid specifications clearly stated that the district’s transportation needs were tentative and estimated, and reserved the district’s right to make changes as necessary.

Finally, there is a dispute between the parties about when petitioner tendered a contract renewal offer, the contents and circumstances concerning that offer, and whether the offer was communicated to respondent board. In any event, respondent board has no legal obligation to accept such a proposal (Education Law "305(14); 8 NYCRR "156.5; Baumann & Sons Buses v. Bd. Of Ed., Northport-East Northport Union Free School District, 46 NY2d 1061; Appeal of National School Bus Service, Inc., 31 Ed Dept Rep 416, Decision No. 12685). I have reviewed the parties’ remaining contentions and find them without merit.

THE APPEAL IS DISMISSED.

END OF FILE