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Decision No. 16,100

Appeal of ARAMARK EDUCATIONAL SERVICES, LLC, from action of the Board of Education of the Hauppauge Union Free School District and Whitsons School Nutrition Corporation regarding a contract.

Decision No. 16,100

(July 27, 2010)

Farber Brocks & Zane L.L.P., attorneys for petitioner, Andrew J. Mihalick, Esq., of counsel

Ingerman Smith, L.L.P., attorneys for respondent Hauppauge Union Free School District, Antonia L. Hamblin, Esq., of counsel

Franklin, Gringer & Cohen, P.C., attorneys for respondent Whitsons School Nutrition Corporation, Joshua Marcus, Esq., of counsel

STEINER, Commissioner.--Petitioner, Aramark Educational Services, LLC (“Aramark”), appeals the determination of the Board of Education of the Hauppauge Union Free School District (“respondent board” or “board”) to award a contract to Whitsons School Nutrition Corporation (“Whitsons”) for food service operations for the 2009-2010 school year.  The appeal must be dismissed.

On or about June 25, 2009, the board issued a Request for Proposals (“RFP”) for the district’s food service operations for the 2009-2010 school year.  On or about July 1, 2009, prospective bidders, including Aramark and Whitsons, participated in a mandatory walk-through of the district’s facilities, which was led by the Assistant Superintendent for Business and Operations (“assistant superintendent”).  According to the assistant superintendent, during the walk-through a bidder inquired about the existing collective bargaining agreement applicable to the district’s food service workers and the assistant superintendent informed the prospective bidders that no stipulations regarding benefits, salaries or hours were being made by the school district, that staffing levels were to be determined by each bidder, and that the school district was not opposed to a vendor lowering labor costs as long as the school district received quality service.

Based on questions raised during the walk-through, the assistant superintendent issued a July 7, 2009 memorandum to all bidders (“memorandum”) and attached several documents, including a copy of the incumbent food service management company’s (Aramark) agreement with the local bargaining unit (“agreement”) and a list of existing positions, salaries, benefits and holidays (“list”), stating that the agreement was “being provided for informational purposes only.”

In response to the RFP, both Aramark and Whitsons submitted bids, which the district opened on or about July 16, 2009.  Aramark asserts that, on or about July 27, 2009, its senior district manager (“senior manager”) met with the assistant superintendent to discuss Aramark’s concerns over Whitsons’ alleged noncompliance with the staffing requirements and to urge that respondent board award the contract to Aramark rather than Whitsons.  The senior manager states that the assistant superintendent understood that Whitsons’ bid did not include the required number of labor hours.  To the contrary, the assistant superintendent states that he explained to the senior manager that the “bid specifications did not include minimum staffing requirements.”

By letter to the board dated July 28, 2009, Aramark’s attorney detailed Aramark’s concerns that Whitsons was a non-responsive bidder and urged the board to “reconsider its apparent decision” to award the contract to Whitsons.  At its August 4, 2009 meeting, the board voted to award the contract to Whitsons.  The record indicates that respondents signed the contract on August 13, 2009.  This appeal ensued.[1]

Petitioner alleges that the award of the contract to Whitsons was made in bad faith, was irrational, arbitrary and capricious and violated Education Law §305(14)(a) and General Municipal Law §103(1).  Specifically, petitioner contends that Whitsons’ application deviated from the “required staffing schedule” set forth in the list attached to the July 7 memorandum.  Petitioner seeks an order directing respondent board to either award the contract to petitioner or rebid the contract.

Respondents contend that the contract was properly awarded to Whitsons as the lowest responsible bidder[2] and that the RFP did not require bidders to meet any minimum staffing requirements or labor schedules.  Whitsons also argues that the appeal must be dismissed as untimely and for failure to state a claim upon which relief may be granted.

The appeal must be dismissed as moot.  The Commissioner will only decide matters in actual controversy and will not render a decision on a state of facts which no longer exist or which subsequent events have laid to rest (Appeal of Tine, 46 Ed Dept Rep 579, Decision No. 15,600; Appeal of N.C., 46 id. 358, Decision No. 15,532; Appeal of Lombardo, 46 id. 282, Decision No. 15,508).  The contract in question covered the 2009-2010 school year.  Since the term of the contract has ended, and the relief sought relates solely to the award of the contract for that school year, the appeal is moot.

Even if the appeal were not dismissed as moot, it would be dismissed on the merits.  Contracts subject to competitive bidding shall be awarded “to the lowest responsible bidder” (Education Law §305[14]; General Municipal Law §103[1]).  “Petitioner has the burden to demonstrate ‘actual’ impropriety, unfair dealing or some other violation of statutory requirements when challenging an award of a public contract” (Matter of Acme Bus Corp. v. Bd. of Educ. of Roosevelt UFSD, et al., 91 NY2d 51, 55).  There is a presumption of regularity which attaches to a school district’s award of a competitively bid contract, and “it is incumbent upon the petitioner to overcome that presumption and establish the action to have been without reasonable foundation” (Matter of Baumann & Sons Buses, Inc. v. Patchogue-Medford UFSD, et al., 231 AD2d 566, 567).  The appearance of impropriety is not sufficient to invalidate a competitively bid contract (Matter of Acme Bus Corp. v. Bd. of Educ. of Roosevelt UFSD, et al., 91 NY2d 51, 55).

In an appeal to the Commissioner, a petitioner has the burden of demonstrating a clear legal right to the relief requested and the burden of establishing the facts upon which petitioner seeks relief (8 NYCRR §275.10; Appeal of Brown, 46 Ed Dept Rep 584, Decision No. 15,602; Appeals of Hubbard, 46 id. 533, Decision No. 15,585; Appeal of Darrow, 46 id. 182, Decision No. 15,477).

Petitioner claims that the bid specifications incorporated the July 7 memorandum – to which the then-current collective bargaining agreement and staffing schedule were attached – and therefore included specific staffing requirements to which Whitsons’ bid did not conform.  According to petitioner’s analysis, Whitsons’ bid included only 160.5 labor hours,[3] rather than the 185.5 labor hours required in the bid specifications and included in Aramark’s bid.  Petitioner concludes that Whitsons’ alleged deviation from the required minimum labor staffing resulted in an improperly low labor cost estimate and constitutes a material defect which can only be cured by a rejection of Whitsons’ bid.

The parties cite several portions of the RFP to support their respective positions.  For example, petitioner cites paragraph 17(J) of the RFP, which states that “[s]taffing patterns shall be mutually agreed upon and there shall be no deviations from the recommended staffing pattern contained in Schedule G, without the [district’s] prior approval and consent.”  Respondents cite paragraph 17(M), which states that “[t]he [bidder] shall provide the [district] with a schedule of employees, positions, assigned locations, salaries (and hours to be worked) two full calendar weeks prior to the commencement of operation as reflected in Schedule G.”

According to petitioner, the bid documents make it clear that the board’s bid specifications included required minimum staffing levels, including the hours per day that each position was to be staffed.  I disagree.  While Schedule G-3 contains a list of the district’s then-current food service employees, the RFP does not specify any “minimum” and/or “required” staffing levels.  Rather, the RFP indicates that bidders must include the staffing levels needed to efficiently operate the district’s food service program.  Therefore, I cannot conclude that petitioner has met its burden of establishing that the district’s award of the contract to Whitsons was without reasonable basis.

Petitioner urges that, because the July 7 memorandum stated that the then-current collective bargaining agreement was attached “for informational purposes,” but did not state that the list was also provided for informational purposes, the list became part of the bid specifications and bidders were therefore required to meet the staffing and hourly schedules contained therein.  The record does not support petitioner’s position.  There is no indication in the record that the list was in fact intended to be a “mandatory” or “required” bid specification.

Moreover, as noted above, the assistant superintendent asserts that he informed all prospective bidders during the walk-through that “no stipulations regarding the benefits, salary or hours were being made by” the district, and that “staffing levels were to be determined by each bidder and the School District was not opposed to an individual vendor lowering labor costs as long as the School District received quality service.”  Indeed, this statement is corroborated both by the RFP language itself and in a reply affidavit from Aramark’s associate district manager (“associate manager”), who participated in the walk-through and acknowledged that the assistant superintendent “remarked that staffing levels were to be decided by the bidders.”

While it may be common and practical for a new food service management company to continue existing staff and to match existing hours and benefits, petitioner has not established that bidders were required by the bid specifications to assume the collective bargaining agreement, including the existing staff and hourly schedule, of the incumbent.

Based on the foregoing, I cannot conclude that petitioner has met its burden of proving that the bid specifications contained required staffing and/or hour requirements with which Whitsons’ bid was noncompliant and that the award should be nullified.

Finally, I find no merit to Aramark’s contention that my decision in Appeal of Whitsons School Nutrition Corporation (49 Ed Dept Rep 129, Decision No. 15,977 [“Whitsons”]) dictates a different result in the instant appeal.  Whitsons is distinguishable on its facts because it involved information listed on a labor schedule which was included in the bid specifications and labeled as “minimum” and “required.”  While Whitsons was dismissed on procedural grounds, I noted that, unlike the instant appeal, it was “reasonable to conclude that the information ... was in fact required, including the positions, hours and rates.”

In light of this disposition, I need not consider the parties’ remaining contentions.

THE APPEAL IS DISMISSED.

END OF FILE.

[1] The record indicates that, on August 26, 2009, petitioner served a notice of claim urging the board to vacate its decision to award the contract to Whitsons and to award the contract to Aramark.

[2] The record indicates that Whitsons proposed a cost of $2.008 per meal, while Aramark proposed a cost of $2.0669 per meal.

[3] In its answer, Whitsons explains that, while the total hours on its labor schedule did not include nine and six hours per day for a director and administrative clerk, respectively, this error was a matter of technical noncompliance that the board was entitled to waive.