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Decision No. 15,564

Appeal of BUSINESS SYSTEMS OF CNY, INC. from action of the Board of Education of the Chittenango Central School District and Northland Networks Ltd., Northland Telephone Systems Ltd. and Oneida County Rural Telephone Company, all doing business as Northland Communications, regarding a contract.

Decision No. 15,564

(April 12, 2007)

Iaconis, Iaconis & Baum, attorneys for petitioner, Paul F. Iaconis, Esq., of counsel

Ferrara, Fiorenza, Larrison Barrett & Reitz, P.C., attorneys for respondent Board of Education of the Chittenango Central School District, Miles G. Lawlor, Esq., of counsel

Scolaro, Shulman, Cohen, Fetter & Burstein, P.C., attorneys for respondents doing business as Northland Communications, Andrew M. Knoll, Esq., of counsel

MILLS, Commissioner.--Petitioner appeals the determination of the Board of Education of the Chittenango Central School District (“respondent board”) to award a telecommunications system contract to Northland Communications (“Northland”).  The appeal must be dismissed.

On May 3, 2006, respondent board published a notice to bidders stating that it would receive bids on a district telephone system on May 24, 2006.  Petitioner, Northland and one other communications company submitted bids.  The district’s business administrator reviewed the bids.

In a memorandum to the superintendent dated June 14, 2006, the business administrator noted that petitioner was the apparent low bidder. He also listed a number of deficiencies in petitioner’s bid.  He noted that petitioner had failed to supply: an authorization document from the equipment manufacturer; a demonstration that it had successfully installed at least five of the proposed systems; an assurance that it could provide normal and emergency service as required; or specific information about its service technicians as required in the project specifications.  He also noted, among other things, that the specifications required a Private Branch Exchange (“PBX”) system and petitioner proposed a hybrid PBX and Voice Over Internet Protocol system that might not accommodate future expansion.  He concluded that petitioner had not proposed a system that met the specifications and had not demonstrated that it was capable of providing required service.  He therefore recommended that the contract be awarded to Northland.

The business administrator addressed respondent board at its June 20, 2006 meeting.  He repeated the concerns outlined above and noted that petitioner’s bid required that it be paid fifty percent of the contract price upon acceptance of the bid.  He contends that this raised concerns about petitioner’s financial ability to carry out the project.  Respondent board voted to award the contract to Northland.

The following day, the business administrator advised petitioner’s president that the contract had been awarded to Northland.  The parties disagree about whether the business administrator gave an adequate explanation why petitioner did not win the bid.  On June 26, 2006, the district and Northland executed a contract for the telephone project.  Northland began work shortly thereafter and was expected to complete the project by October 2006.

Petitioner asked the district for a copy of Northland’s bid and received it on June 28, 2006.  By letter to the business administrator dated July 3, 2006, petitioner’s attorney asserted that petitioner submitted the lowest responsible bid and that there were a number of deficiencies in Northland’s bid.  He stated that the district must either have made a substantial miscalculation of Northland’s bid or violated the requirements of the Education Law and the General Municipal Law that contracts be awarded to the lowest responsible bidder.  He suggested that the district meet with petitioner to review the bids; he also urged the district to reject all bids and re-bid the project. 

The business administrator received this letter on or about July 10, 2006.  He asserts that he called petitioner’s attorney later that week and explained that many of the factual allegations in his letter were incorrect.  Petitioner’s attorney asserts that he was told the letter had been forwarded to counsel for the district, that he did not receive a timely response and that he later made an unsuccessful attempt to reach that attorney to discuss the matter.

Petitioner’s attorney made requests under the Freedom of Information Law (“FOIL”) for respondent board’s meeting minutes, related documents and the contract.  His requests were dated July 12 and July 17, 2006.  The business administrator responded to the requests on July 26, 2006.  He supplied some documents and advised that others were available upon payment of copying charges.  Petitioner’s attorney picked up the documents on August 4, 2006.  On or about August 7, 2006, he took steps to determine Northland’s corporate status and business address.  On August 11, 2006, petitioner’s counsel had the petition served on respondent board and on the three entities doing business as Northland.

At some point in July, the district business administrator asked an architectural and engineering firm to review petitioner’s bid.  In a report dated August 15, 2006, that firm identified several “definitive discrepancies” between the specifications and petitioner’s bid.  The report also recommended against the payment structure proposed in petitioner’s bid.

Petitioner asserts that respondent improperly awarded the contract to Northland when petitioner was the lowest responsible bidder.  Petitioner acknowledges that its appeal was not commenced within 30 days of the contract award but argues that the appeal should not be dismissed as untimely.  Petitioner asserts that its delay in commencing this appeal should be excused because the school district did not timely respond to its inquiries about the claimed deficiencies in its bid or other justifications for awarding the contract to Northland.  Petitioner also asserts that the district did not respond to its FOIL requests until 30 days had elapsed from the contract award.  Petitioner contends that it would have been premature to commence an appeal before it had a full opportunity to determine whether the award to Northland was justified.  Petitioner asks that I annul the contract, direct that it be awarded to petitioner and grant petitioner counsel fees and expenses.  In the alternative, petitioner asks that if the work under the contract has already been substantially completed by Northland, I award petitioner money damages for its lost profits.

Respondent board asserts that it properly awarded the contract to Northland, that the appeal is untimely, and that money damages and attorneys’ fees are not available in an appeal pursuant to Education Law §310.  Northland argues that the appeal is untimely and that it is not liable to petitioner.

     The appeal must be dismissed as untimely.  As petitioner acknowledges, an appeal to the Commissioner must be commenced within 30 days from the making of the decision or the performance of the act complained of, unless any delay is excused by the Commissioner for good cause shown (8 NYCRR §275.16; Appeal of O’Brien, 44 Ed Dept Rep 43, Decision No. 15,092; Appeal of Spina, 43 id. 354, Decision No. 15,016).  An appeal challenging a contract award must be commenced within 30 days of the award becoming final (Appeals of American Quality Beverages et al., 42 Ed Dept Rep 144, Decision No. 14,804; Appeal of McDougall and Murphy, 37 id. 611, Decision No. 13,941; Appeal of Eastman Kodak Company, 32 id. 575, Decision No. 12,918).

     Respondent’s business administrator notified petitioner that the contract had been awarded to Northland on June 21, 2006.  Petitioner did not serve the petition on

respondents until August 11, more than 30 days later.  Indeed, petitioner acknowledges that it did not commence the appeal until more than 30 days after the contract was executed on June 26.

     Petitioner’s request, by letter dated July 3, 2006, that respondent board reconsider its decision did not extend the time within which the appeal should have been commenced (Appeal of Eastman Kodak Company, 32 Ed Dept Rep 575, Decision No. 12,918).  Nor do petitioner’s efforts to obtain additional information about the winning bid compel me to excuse the delay (seeApplication of Kavitsky, 41 Ed Dept Rep 231, Decision No. 14,672; Appeal of D.C., 41 id. 277, Decision No. 14,684).  Petitioner’s counsel’s July 3 letter demonstrates that petitioner had sufficient information to challenge the contract award at that time.  Petitioner’s counsel did not make the FOIL requests until much of the time to appeal had expired, and respondent board responded within a reasonable time.  Although petitioner’s counsel’s illness slightly delayed his efforts to pick up the responsive documents, the time to commence an appeal already had expired even if the 30 days were counted from execution of the contract rather than the award.  Similarly, petitioner encountered some difficulty determining Northland’s corporate status and address, but those efforts were also made after the time to commence the appeal had expired.

     In addition, petitioner seeks relief that is not available in this proceeding.  Petitioner requests counsel fees and costs and, if Northland has substantially completed the work, compensation for petitioner’s lost profits.  It is well-settled that the Commissioner of Education lacks authority to award damages, costs or attorney’s fees (Appeal of D.J.H., 45 Ed Dept Rep 45, Decision No. 15,255; Appeal of Galluzzo, 45 id. 294, Decision No. 15,328).

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