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ALB RESTAURANTS, LLC, Petitioner, v. ALBANY COUNTY AIRPORT AUTHORITY and OHM Concession Group, LLC, Respondents.
Petitioner ALB Restaurants, LLC (“ALB”) brings this special proceeding pursuant to CPLR article 78, seeking to annul a concession contract awarded by respondent Albany County Airport Authority (“Authority”) to respondent OHM Concession Group, LLC (“OHM”). The Authority and OHM oppose the verified petition (“Petition”) through a verified answer (“Answer”) and a verified opposition (“Opposition”), respectively.
The Authority is a public benefit corporation created by the State of New York (see Public Authorities Law, ch 43–a, art 8, tit 32). The Authority operates the Albany County Airport (“Airport”) pursuant to a lease with the County of Albany, which owns the Airport.
ALB was formed in June 2017 for the purpose of bidding on a request for proposals (“RFP”) issued by the Authority for food and beverage concessions at the Airport. ALB is jointly owed by Orlando Pizza Systems, LLC (“Orlando Pizza”), which holds a 70% membership interest, and Silver Linings, LLC, which owns the remaining 30% interest. Biagio Scotto is the managing member of Orlando Pizza.
In June 2005, the Authority solicited proposals for the operation of two food and beverage concessions at the Airport. Villa Pizza of New York, Inc. (“Villa”) was awarded the contract, and it opened two restaurants: “Villa Fresh Italian Kitchen” and “Green Leaf's and Bananas.” In 2009, Restaurant at Albany Airport, LLC (“RAA”), an entity related to Villa, was substituted as the concessionaire.
As the scheduled termination of the concession agreement was approaching in 2016, the Authority expressed a desire to continue RAA's services on a month-by-month basis while it issued an RFP for the two RAA concession locations, which are located in the secure portion of the Airport, and a third location that is accessible to the public without clearing security.
On May 18, 2017, the Authority published an RFP inviting bids from prospective concessionaires (see Petition, Ex. D [“RFP”] ). Bidders were required to submit proposals identifying the restaurant concepts that they intended to pursue for the three concession spaces, together with evidence of their permission to use those concepts at the Airport. The deadline for the submission of proposals was extended several times: initially to July 18, 2017, and later to August 10, 2017.
Six concessionaires submitted proposals to the Authority, including petitioner ALB and respondent OHM, a corporation that develops and manages concessions at transit facilities throughout the country. Following review of proposals, the Authority notified bidders on October 19, 2017 that OHM's proposal had received the highest score by a wide margin (see id., Ex. L). The Authority awarded the food and beverage concessions to OHM on November 6, 2017 (see id., Ex. M), and a concession contract (“Contract”) was executed on February 23, 2018 (see id., Ex. P).
ALB alleges that OHM obtained the contract award through fraud and forgery. Specifically, the Petition alleges that OHM's proposal to the Authority “was based, at least in part, on a fraud with respect to the consent from at least one of their proposed licensors/franchisors, and serious misrepresentations regarding [its] prior history of performance (Petition, ¶ 54; see also id., Exs. F–1 through F–3 [“OHM Proposal”] ).
ALB explains that OHM's proposal represented that its concession sites at the Airport would contain a Chick–fil–A, Wolfgang Puck Pizza Kitchen, and American Market by Todd English. Petitioner alleges that OHM submitted a forged letter from Todd English Enterprises (“TE Enterprises”) falsely claiming that OHM had Todd English's approval to include the American Market concept in its proposal (see Petition, Ex. N [“OHM Letter”] ). In this connection, ALB submits an affidavit from Chef English averring that he did not sign or authorize the OHM Letter, and he did not consent to the inclusion of his brand in OHM's proposal (see English Aff. & annexed exhibits).
Petitioner also alleges that OHM made several other misrepresentations to the Authority concerning projects that were underway in New York State. Specifically, the Petition alleges that OHM misrepresented in its proposal the status of a project under development with Todd English in Times Square, as well as OHM's progress in developing a “food hall” at the Port Authority Bus Terminal (see Petition, ¶¶ 68–71).
Finally, petitioner alleges that OHM engaged in improper communications with the Authority during the procurement process. In particular, ALB alleges that OHM communicated with persons at the Authority other than “designated staff” during the pendency of the RFP, in contravention of State Finance Law § 139–j and the terms of the RFP (Petition, ¶¶ 29–46).
On the basis of the foregoing allegations, ALB seeks an order and judgment: (i) annulling the RFP award and Contract; (ii) directing the Authority to award the concession to ALB, as the highest-scored responsible bidder, or, in the alternative, directing the Authority to rebid the concessions; and (iii) enjoining any work from being performed pursuant to the Contract.
EXHAUSTION OF ADMINISTRATIVE REMEDIES
“It is hornbook law that one who objects to the act of an administrative agency must exhaust available administrative remedies before being permitted to litigate in a court of law” (Watergate II Apts. v. Buffalo Sewer Auth., 46 NY2d 52, 57  [citation omitted] ). “This doctrine furthers the salutary goals of relieving the courts of the burden of deciding questions entrusted to an agency, preventing premature judicial interference with the administrators' efforts to develop ․ a co-ordinated, consistent and legally enforceable scheme of regulation and affording the agency the opportunity, in advance of possible judicial review, to prepare a record reflective of its expertise and judgment” (id. [internal quotation marks and citations omitted] ). The exhaustion requirement has been applied in the context of a losing bidder's challenge to a procurement (see e.g. Matter of AAA Carting & Rubbish Removal, Inc. v. Town of Stony Point, NY, 159 AD3d 1036, 1038 [2d Dept 2016]; see also Walton v. New York State Dept. of Correctional Servs., 8 NY3d 186, 195  ).
The Authority submits the affidavit of its general counsel, Peter Stuto, and a copy of the Authority's Vendor Protest Policy and Procedures (see Stuto Aff., Ex. 1 [“Protest Policy”] ). The Protest Policy provides dissatisfied bidders with an administrative remedy to challenge “[a]n award or proposed award of [a] contract by [the] Authority” (id., II [A]  [c] ). Under this policy, ALB was required to file a formal written dispute with the Authority no later than November 16, 2017—ten (10) days after the date on which the Authority awarded the concession agreement to OHM—setting forth a detailed statement of the legal and factual grounds for the dispute and copies of relevant documents (see id., II [B] ). Stuto avers that ALB never filed an administrative dispute pursuant to the Protest Policy (see Stuto Aff., ¶ 9).
The Court concludes that, on this record, the Authority and OHM have failed to demonstrate their entitlement to dismissal of the Petition for lack of exhaustion. As observed by ALB in opposing respondents' invocation of the exhaustion doctrine: the Protest Policy was not distributed with the RFP; the policy was not referenced by the Authority when bidders were notified that OHM had been awarded the concession; the Protest Policy does not appear to have been published or made available on the Authority's website; the copy of the Protest Policy submitted by the Authority does not bear a publication date or an effective date; and the Authority has not demonstrated that bidders were given notice of the Protest Policy through other means (see Scotto Reply Aff., ¶¶ 42–46; Lauricella Reply Aff., ¶¶ 15–17). In the Court's view, the Authority's failure to establish that it gave ALB adequate notice of the administrative remedy for challenging the Contract award precludes its reliance on that remedy to bar this judicial proceeding (see generally Matter of Barrett v. Morgenthau, 74 NY2d 907, 909 ; Matter of Laugh & Learn v. State of NY Dept. of Motor Vehs., 263 AD2d 854, 855–856 [3d Dept 1999] ).
The Court further concludes that resort to the administrative remedy would have been futile here (see Watergate II Apts., 46 NY2d at 57). The documents from the procurement record upon which this CPLR article 78 proceeding is based were not available to petitioner until the Contract was executed on February 23, 2018 (see RFP, p. 10 [proposals “will be kept secret during the evaluation/negotiation process”] ). Under the Protest Policy, however, any administrative challenge to the Authority's selection of OHM had to have been filed more than three months prior—at a time when the Authority had not yet produced to ALB the allegedly forged letter from Todd English and the emails that allegedly evidence OHM's improper communications. Further, respondents do not, and cannot, claim that ALB was aware of the basis of this proceeding prior to receiving the procurement record from the Authority pursuant to the Freedom of Information Law.
For the foregoing reasons, the branch of respondents' opposition seeking the dismissal of the Petition due to ALB's failure to comply with the Protest Policy is denied.
ALLEGATIONS OF NON–RESPONSIBILITY/NON–COMPLIANCE
Petitioner argues that the contract award to OHM must be annulled because the Authority acted arbitrarily, capriciously and contrary to law. ALB alleges that OHM's submission of a proposal that included a forged document and fraudulent misrepresentations renders OHM a non-responsible bidder and demonstrates its lack of honesty, integrity, good faith and fair dealing. ALB further alleges, on the basis of the foregoing, that OHM's proposal must be deemed non-compliant with the RFP specifications. Finally, ALB argues that prohibited contacts between OHM and the Authority during the pendency of the procurement provide a further basis for determining OHM to be a non-responsible bidder and annulling the contract award.
A. Standard of Review
In reviewing administrative action taken by a governmental agency, the Court's role is limited to determining whether the agency's “determination was made in violation of lawful procedure, was affected by an error of law or was arbitrary and capricious or an abuse of discretion” (CPLR 7803 ; see Matter of Pell v. Board of Educ. of Union Free School Dist. No. 1 of Towns of Scarsdale and Mamaroneck, Westchester County, 34 NY2d 222, 230–231  ). “The burden of proof in this regard rests with petitioners” (Matter of Johnson Elec. Constr. Corp. v. New York State Dept. of Transp., 124 AD3d 1199, 1200 [3d Dept 2015] [citations omitted] ).
“An action is arbitrary and capricious when it is taken without sound basis in reason or regard to the facts” (Matter of Peckham v. Calogero, 12 NY3d 424, 431 , citing Matter of Pell, 34 NY2d at 231). Under this deferential standard of review, the Court must sustain a determination supported by a rational basis “even if the court concludes that it would have reached a different result than the one reached by the agency” (id.; see Matter of Heintz v. Brown, 80 NY2d 998, 1001  ). Further, “where ․ the judgment of the agency involves factual evaluations in the area of the agency's expertise and is supported by the record, such judgment must be accorded great weight and judicial deference” (Flacke v. Onondaga Landfill Sys., 69 NY2d 355, 363 ; accord Matter of Catskill Heritage Alliance, Inc. v. New York State Dept. of Envtl. Conservation, 161 AD3d 11, 19 [3d Dept 2018] ).
B. Allegations of Fraud and Forgery
Petitioner alleges that the OHM obtained the concession Contract through fraud and forgery. Specifically, ALB asserts that OHM misrepresented that it had the consent of Todd English to include the American Market concept in its proposal to the Authority, and it submitted a forged document to that effect. ALB further alleges that OHM's proposal included other misrepresentations of fact “intended to bolster its past history and performance” (Petition, ¶ 68).
1. Allegations Concerning American Market by Todd English
a. Factual Allegations
Petitioner alleges that OHM fraudulently misrepresented its authority to include the American Market concept in its proposal by, among other things, submitting a forged letter purportedly authored by Todd English. According to the moving affidavit of Chef English, the OHM Letter “is not on the letterhead of Todd English Enterprises, was not authored by [English] and the signature is not [English's] signature” (English Aff., ¶ 5). Further, in a letter to Villa annexed to his affidavit, Chef English maintains that he “did not give OHM [his] consent to move forward with any projects using [him] or any of [his] brands at the Albany Airport” (English Aff., Ex. B [“Villa Letter”] ). Chef English avers to the authenticity of the Villa Letter and to the truth and accuracy of its contents (see English Aff., ¶ 6).
In opposition, OHM does not attempt to establish the authenticity of the disputed letter, but instead maintains that it was entitled to rely upon the OHM Letter under the doctrine of apparent authority. In this regard, OHM relies primarily on the affidavit of Richard Chinsammy, a senior executive with the corporation. Chinsammy explains that OHM had been approached by Vince Modica, a consultant to Chef English, regarding a business relationship whereby OHM would license Todd English's proprietary American Market brand for food and beverage projects (see Chinsammy Aff., ¶ 20). OHM submits portions of a license agreement with TE Enterprises dated July 20, 2016 (see id., Ex. 1 [“License Agreement”] ).
Following execution of the License Agreement, OHM allegedly sought to bring Todd English concepts to other concessions that it was seeking to develop, including an American Market at LaGuardia Airport and an Olive's Restaurant in Long Branch, New Jersey (see Chinsammy Aff., ¶ 22). However, OHM was not awarded the LaGuardia Airport concession, and the Long Branch developer decided to pursue a custom concept (see id.). Nonetheless, Chinsammy avers that OHM also was in discussions to bring Todd English concepts to the Port Authority Bus Terminal and Times Square (see id.). Chinsammy maintains that he “had extensive conversations with Chef English about each of these projects as well as other prospects and plans,” usually via telephone or text messages (id., ¶ 23).
OHM initially planned to propose an Einstein's Bagel Bakery (“Bakery”) in the Airport's pre-security concession site (see id., ¶ 24). In furtherance of that plan, OHM contacted the Bakery to secure its approval and retained an architect to produce renderings and floor plans (see id., ¶¶ 24–26). However, Chinsammy avers that in a June 2, 2017 call regarding the LaGuardia Airport project, Chef English authorized OHM to use his American Market concept at the Airport in lieu of the Bakery (see id., ¶¶ 27–28). OHM claims to have immediately notified its architect of the change (see id., ¶ 27).
As to the delivery of the OHM Letter, Chinsammy avers that he was scheduled to dine at Chef English's restaurant at the Plaza Hotel on July 6, 2017 with Milan Patel (the chief executive of OHM), Vinod Patel (a founder and financial advisor to OHM) and several Japanese businessmen (see id., ¶ 18). At the time, Chef English was in Tuscany, Italy, and Chinsammy avers that the two spoke by telephone on July 6, 2017, sometime prior to the scheduled dinner (see id., ¶¶ 31–32). During the call, Chef English allegedly promised to provide his written approval for the inclusion of an American Market concept in OHM's proposal to the Airport prior to the then-existing July 18, 2017 deadline (see id., ¶ 32 & Ex. 2).
While dining at Chef English's restaurant on July 6, 2017 with Milan Patel, Vinod Patel and the Japanese businessmen, an unidentified male employee associated with Chef English and/or the restaurant approached the table and handed Chinsammy the OHM Letter (see id., ¶ 33). Both Vinod Patel and Milan Patel aver to having personally witnessed the hand delivery of the letter to Chinsammy by this unidentified male (see id.; see Vinod Patel Aff., ¶¶ 3–5; Milan Patel Aff., ¶¶ 4–6). Chinsammy and Chef English exchanged text messages the following day, but it appears that neither made any reference to the delivery of the OHM Letter the evening before (see Chinsammy Aff., ¶ 35 & Ex. 3).
In or about October 2017, the Authority and OHM became aware of a sexual harassment lawsuit filed against Chef English (see id., ¶ 40 & Ex. 4). Chinsammy was contacted by Ms. Chadderdon, the Authority's concession manager, on November 5, 2017 and allegedly advised that the Airport wished to avoid the controversy associated with Chef English (see id., ¶ 41). As a result, OHM proposed replacing the American Market with a generic deli concept, which the Authority approved (see id.).1 OHM then terminated the License Agreement pursuant to a “Morals Clause” (id., ¶ 42; see License Agreement, ¶ 6.2). Chef English disputed the termination, and the matter is in arbitration (see Chinsammy Aff., ¶ 43).
At some point, Chef English entered into a business relationship with the Villa Restaurant Group, a corporation affiliated with petitioner (see English Aff., ¶ 6), and the Villa Letter annexed to Chef English's affidavit expresses his willingness “to discuss a deal [with ALB] at the Albany Airport” (English Aff., Ex. B). In light of the foregoing, OHM suggests that Chef English's averments are “less than credible” due to this alleged “financial incentive to be untruthful” (Opposition, ¶ 47; see also Chinsammy Aff., ¶ 48; Authority Opp. Mem., p. 23 [“a biased affiant in that, having been left on the altar by OHM, [Chef English] has now joined Petitioner in the hopes of opening a restaurant at the Airport”] ). OHM also observes that Chef English's affidavit is silent on the parties' alleged preexisting business relationship, including the License Agreement.
In reply, Chef English reaffirms that he did not give OHM consent to move forward with any projects involving his brands at the Airport (see English Reply Aff., ¶¶ 5, 7). Chef English further avers that he did not authorize any employee (or anyone else associated with him) to prepare the OHM Letter or to affix his signature thereto (see id., ¶ 8). Finally, Chef English avers that he did not authorize or direct anyone to deliver the OHM Letter (see id., ¶ 9).
ALB also submits proof in reply from its counsel, who avers that the Authority's counsel, Richard Meyers, “relayed a markedly different story to ALB about the OHM Todd English Letter, and how OHM received it” (Lauricella Reply Aff., ¶ 33). According to Attorney Lauricella, the Authority's counsel represented to him that the OHM Letter had been personally delivered to Chinsammy by Gina Gargano, Chef English's personal assistant, in the basement of the Plaza Hotel at a meeting arranged specifically for that specific purpose—“not while [Chinsammy and the Patels were] dining with ‘Japanese’ business men” (id., ¶ 34).2 Relatedly, ALB observes that OHM failed to confirm the identity of the male employee who allegedly delivered the letter or confirm its receipt of the letter with Chef English.
Finally, ALB insists that it had not discussed the possibility of an American Market at the Airport with Chef English or offered him any inducement to be a witness in this proceeding (see Scotto Reply Aff., ¶¶ 48–50). While “Villa, the parent company of [ALB's majority owner], has a long standing relationship with Chef English” (id., ¶ 51), ALB's conversations with Chef English regarding the Airport “only arose in January 2018 after he was surprised to learn that his name and concept had been used in this RFP by OHM” (id., ¶ 56). Chef English similarly avers that his “sole purpose in submitting [his] affidavit[s] was to be truthful about the circumstances and to protect [his] name and brand from unauthorized use” (English Reply Aff., ¶ 10).
“Apparent authority will only be found where words or conduct of the principal—not the agent—are communicated to a third party, which give rise to a reasonable belief and appearance that the agent possesses authority to enter into the specific transaction at issue” (Edinburg Volunteer Fire Co., Inc. v. Danko Emergency Equip. Co., 55 AD3d 1108, 1110 [3d Dept 2008] [citations omitted] ). Further, “a third party with whom the agent deals may rely on an appearance of authority only to the extent that such reliance is reasonable” (Hallock v. State of New York, 64 NY2d 224, 231  ).
Thus, to successfully invoke apparent authority, OHM must establish words or conduct on the part of Chef English (the principal) that gave rise to a reasonable belief on the part of OHM (the third party) that the male “associate or manager employed by Chef English” (the agent) was imbued with authority to deliver the OHM Letter (Chinsammy Aff., ¶ 33; see Hallock, 64 NY2d at 231). OHM relies largely on the alleged telephone conversation between Chinsammy and Chef English on July 6, 2017, in which Chef English confirmed his approval of OHM's proposal for an American Market at the Airport and promised to provide written confirmation prior to the deadline (see Opposition, ¶ 34; Chinsammy Aff., ¶¶ 31–32). However, Chef English has submitted affidavits in which he denies having given such consent to OHM.
Given the conflicting record evidence concerning the factual underpinnings of OHM's invocation of apparent authority, the Court concludes that triable issues of fact have been raised (see CPLR 7804 [h]; see also Price v. Giffin, 28 AD2d 1200, 1201 [3d Dept 1969] [whether principal “has clothed its agent with apparent authority to act for it in a given matter is a question of fact for the jury where the evidence with respect to the determining facts is conflicting”] ). Accordingly, ALB's allegations of misconduct by OHM relative to its inclusion of the American Market concept in its proposal and OHM's defense that it acted with apparent authority in submitting the OHM Letter to the Authority must be resolved at trial.
2. Other Alleged Misrepresentations
ALB alleges that OHM made several other material misrepresentations of fact to the Authority that were “intended to bolster its past history and performance” (Petition, ¶ 68). Specifically, ALB claims that OHM falsely represented in its proposal that it was developing a project with Chef English in Times Square that would be completed by December 2017 and developing five concepts at the Port Authority Bus Terminal for a project expected to open in December 2017 (see id., ¶¶ 68–71).
The challenged representations are found in a portion of the proposal describing OHM's ongoing efforts to establish several major concession venues in New York (see Petition, Ex. F–1).3 ALB offers no evidentiary proof to support its allegation that OHM's representations concerning the New York concessions were not true when made on August 9, 2017, and, in fact, these allegations of fraud are made solely upon information and belief (see id., ¶¶ 68–69). Further, the uncontroverted proof submitted by OHM in opposition to the Petition affirmatively demonstrates that the challenged representations were true when OHM's proposal was submitted to the Authority.
Specifically, OHM's proof shows that it was not until November 2017 that it learned that the landlord for the Times Square project was unwilling or unable to deliver possession of the demised premises, and that project currently is in litigation (see Chinsammy Aff., ¶¶ 50–53). As for the Port Authority Bus Terminal project, Chinsammy avers that: OHM entered into a lease with the Port Authority on December 30, 2015 to build a food court at the bus terminal; design and development of the project began in 2016, with the goal of a 2017 opening; the specifications for the project were changed in highly significant respects in June 2017; and the project remains underway pursuant to a revised schedule approved by the Port Authority (see id., ¶¶ 56–63).
Based on the foregoing, petitioner's unsupported allegations of misrepresentations concerning the status of the New York projects are without merit and do not provide a basis for annulment of the contract award or any other relief in this proceeding.
C. Allegations of Improper Communications
Finally, ALB alleges that the contract award must be annulled and OHM determined to be a non-responsible bidder because OHM engaged in improper communications with the Authority. Specifically, ALB alleges that OHM senior executives engaged in impermissible communications during the restricted period with individuals at the Authority other than the designated staff person, in violation of State Finance Law (“SFL”) § 139–j and terms of the RFP.
The RFP advises bidders that SFL § 139–j imposes “certain restrictions on communications between the Authority and [bidders] during the procurement process” (RFP, p. 4). Subject to exceptions not implicated here, “[a] proposer is restricted from making contact from the earliest notice of intent to solicit offers through final award and approval of the contract by the Authority (‘restricted period’) to other than designated staff” (id.). Bobbi Matthews was the Authority's designated staff person for the RFP (see id.).
1. Alleged Improper Communications
Petitioner submits four sets of email communications during the restricted period that are alleged to evidence improper communications between OHM executives and the Authority.
First, Chinsammy emailed Helen Chadderdon, the Authority's concession manager and a member of the evaluation committee, on July 27, 2017 to let her know that he received a message that she had called (see Petition, Ex. G). This communication was made prior to the submission of proposals to the Authority.
Second, Chinsammy emailed Chadderdon on August 22, 2017—12 days after bidders submitted their proposals—to thank her “for taking to time to clarify [OHM's] RFP submission” relative to the Chick–fil–A concept (id., Ex. H). Attached to Chinsammy's email is a two-page document consisting of bullet points that (i) provide certain clarifications regarding the Chick–fil–A concept and (ii) give the Authority the option of a different concept for the Chick–fil–A space or foregoing an award of the third concession space entirely (see id.). Chinsammy then emailed Chadderdon a revised design for the Chick–fil–A space on August 23, 2017, together with a brief note citing OHM's flexibility and creativity (see id., Ex I).
Third, Chinsammy and Milan Patel emailed members of the evaluation committee on September 19, 2017 (see id., Ex. J). The OHM emails thanked committee members for the opportunity to make a presentation earlier that day, reaffirmed OHM's commitment to provide a letter from Chick–fil–A clarifying its position on inclusion and diversity in the workplace, and emphasized that OHM would be a “true partner[ ]” to the Authority (id.).
Finally, in an October 2017 email exchange, Milan Patel emailed Chadderdon the contact information for several construction companies (see id., Ex. K).
Petitioner argues that these communications were made by OHM executives to members of the RFP evaluation committee for the purpose and intent of obtaining an unfair advantage over other bidders. ALB takes particular issue with: (i) the clarification and flexibility bullet points annexed to Chinsammy's August 22, 2017 email (see id., Ex. H), which are said to amount, “more or less[, to] a direct sales pitch” (Petitioner's Mem., p. 26); the August 23, 2017 sales verbiage regarding OHM's flexibility and creativity (Petition, Ex. I); and the assurances given by OHM in the September 19, 2017 “thank you” emails (id., Ex. J).4
2. The Authority's Response
The Authority submits the affidavit of Helen Chadderdon to provide context regarding the challenged communications.
According to Chadderdon, her July 27, 2017 telephone call to Chinsammy was part of a process whereby she contacted every entity that had expressed interest in the RFP but had not yet committed to submit a proposal (see Chadderdon Aff., ¶¶ 55–57). Chadderdon explains that she called Chinsammy as one of 25 or so calls that she made to drum up interest in the RFP and remind potential bidders of the impending deadline (see id., ¶ 57). Chadderdon recalls leaving a message to that effect for Chinsammy, but does not recall if they spoke (see id.).
Chadderdon explains that the August 22, 2017 email was sent three days prior to the first meeting of the evaluation committee, so that she would be clear at the meeting as to: (i) OHM's intentions for the Chick–fil–A space on Sundays, when the restaurant is closed; and (ii) whether OHM's proposal was contingent on being awarded all three concession locations (see id., ¶¶ 58–60).
Finally, the Authority asserts that the September 19, 2017 emails merely were an innocuous follow-up to the meeting with the evaluation committee earlier that day, and the October 2017 email exchange was initiated after a reference supplied by OHM reported some concerns about the timeliness of the concessionaire's build-out of a different site, and Chadderdon requested additional construction references (see id., ¶¶ 61–64).
The Authority therefore contends that the challenged communications were innocuous, not intended to influence the procurement process, and did not result in any actual impropriety or prejudice to ALB.
3. OHM's Response
The challenged communications are addressed by OHM in the Chinsammy affidavit. He does not recall speaking to Chadderdon relative to the July 27, 2017 communication, but he shares her recollection that the call was made to inform OHM of the proposal deadline (see Chinsammy Aff., ¶ 75).
Regarding the August 22 and 23, 2017 communications, Chinsammy avers that Chadderdon called him to request clarification regarding the use of the Chick–fil–A space on Sundays, and he advised her that the design of the space could allow for the use of “Grab & Go” stations when the restaurant is closed (id., ¶ 79). At Chadderdon's specific request, he then forwarded several options to address her questions and concerns, as well as Chick–fil–A design documents (see id., ¶ 80).
Chinsammy describes the September 19, 2017 emails as merely expressing OHM's appreciation for the opportunity to make a presentation to the committee (see id., ¶¶ 85–87), and he confirms Chadderdon's account of the October 2017 communications (see id., ¶¶ 88–89).
“The central purposes of New York's competitive bidding statutes are ‘(1) protection of the public fisc by obtaining the best work at the lowest possible price; and (2) prevention of favoritism, improvidence, fraud and corruption in the awarding of public contracts’ ” (Matter of Transactive Corp., 236 AD2d at 52, quoting Matter of New York State Ch., Inc., Associated Gen. Contrs. v. New York State Thruway Auth., 88 NY2d 56, 68  ). “Inasmuch as the intended beneficiaries of these statutes are the taxpayers, [the Court] must weigh [petitioner's] challenge with sole reference to the public interest” (id.). Thus, in analyzing the procurement process used by the Authority, the Court must consider whether there is proof of favoritism, fraud or corruption, or a material and substantial irregularity that undermined the fairness of the process (see id. at 53–54).
The Court concludes that the proof adduced by ALB in support of its claim of improper communications between OHM and the Authority falls well short of demonstrating “favoritism, fraud or corruption [or] any unfair advantage to [OHM] at [ALB's] expense” (id. at 53). The evidence concerning the July 27, 2017 communications shows that Chadderdon called 25 or so potential vendors simply to remind them of the deadline for the submission of proposals. Further, Chadderdon initiated the August 22 and 23, 2017 communications to ensure that she fully understood OHM's intentions for the Chick–fil–A space before the committee met to discuss the proposal on August 25, 2017. And the September 19, 2017, emails merely were “thank you” letters with reference to some limited follow-up requested by the committee. Finally, Chadderdon initiated the October 2017 communication for the purpose of obtaining additional construction references for OHM. Of these communications, only the “thank you” emails of September 19, 2017 were initiated by OHM, and the substance of these emails largely is innocuous.
Nor has petitioner proven that annulment of the Contract is required under SFL § 139–j. Pursuant to paragraph (10) (b) of the statute, “[a] finding that an offerer has knowingly and willfully violated the [communications requirement of the statute] shall result in a determination of non-responsibility for such offerer, and such offerer ․ shall not be awarded the procurement contract ․” Thus, a non-responsibility determination under the statute must be based on proof that the bidder deliberately undertook to violate the communication restrictions of the statute with knowledge of such restrictions (see generally Penal Law § 15.05).
There simply is no basis in the present record to conclude that OHM consciously and intentionally violated SFL § 139–j by responding to inquiries from the Authority's concession manager (and member of the evaluation committee) and by providing the requested clarifications and follow-up. Even as to the August 22 and 23, 2017 communications, which were the communications that most arguably could be said to have represented an effort by OHM to influence the procurement process (see SFL § 139–j  [c] ), there is no fair view of the proof adduced by ALB that supports the conclusion that OHM intentionally set out to violate the procurement laws by responding to inquires from the Authority's concession manager.5 Likewise, while the “thank you” emails may technically have been improper under SFL § 139–j, particularly as to the small amount of sales verbiage included therein, the Court is satisfied that the communications were harmless and, in any event, do not constitute proof of a knowing and willful effort by OHM to violate the State's procurement laws.
To be sure, the Court does not countenance the Authority's failure to strictly comply with obligations under SFL § 139–j (and the terms of the RFP) by communicating with OHM through persons other than designated staff. “[V]endors who participate in the procurement process and the residents of the state should feel confident that the process is fair” (L 2010, ch 4, § 1 [legislative findings and statement of intent for amendments to SFL § 139–j] ). This salutary objective may be frustrated where a public entity uses improper means of communication during the pendency of a procurement, even if it acts in good faith for purposes that it believes to be proper.
That said, the law does not command a perfect procurement. Rather, the common-law principles succinctly marshaled by the Third Department in Matter of Transactive Corp. (supra ) call for a procurement process free of favoritism, fraud, corruption and serious unfairness. And SFL § 139–j proscribes the award of a contract to a bidder who engages in improper communications only where the statutory violation is knowing and willful.
Measured against these standards, the Court is satisfied that ALB has failed to meet its burden of demonstrating that the challenged communications warrant annulment of the contract award. Accordingly, the Court rejects the branch of the Petition founded on allegations of improper communications.
Accordingly,6 it is
ORDERED and ADJUDGED that the Petition is granted to the limited extent of ordering a trial pursuant to CPLR 7804 (h) as to petitioner's allegations of misconduct in connection with the OHM Letter and OHM's defense that it relied upon apparent authority in submitting the OHM Letter; and it is further
ORDERED and ADJUDGED that the Petition is denied in all other respects; and it is further
ORDERED that the parties to this proceeding shall appear for a conference on July 9, 2018 at 1:30 p.m. to, among other things, select a trial date.
This constitutes the Decision, Order & Judgment of the Court, the original of which is being transmitted to the Albany County Clerk for electronic filing and entry. Upon such entry, counsel to petitioner shall promptly serve notice of entry on all other parties to this action (see Uniform Rules for Trial Cts [22 NYCRR] § 202.5–b [h] ,  ).
1. The Authority had broad discretion to allow OHM to substitute a different concept in place of the American Market by Todd English (see RFP, § 7.2 & Ex. IV, § 5.13; Matter of Transactive Corp. v. New York State Dept. of Social Servs., 236 AD2d 48, 54 [3d Dept 1997], affd on other grounds 92 NY2d 579  ).
2. Attorney Lauricella further affirms that Ms. Gargano denied knowledge of the OHM Letter, but that assertion is inadmissible hearsay (see id., ¶ 36). Likewise, the portion of Scotto's reply affidavit repeating what he was told by others regarding the OHM Letter similarly is inadmissible (see ¶¶ 60–64).
3. Thus, while ALB claims that OHM intended these representations to bolster its record of past performance, it is clear from the proposal that the representations concerned projects that were underway but not yet completed.
4. Petitioner further observes that the emails reference unmemorialized telephone conferences.
5. Further, the Authority had the discretion to determine, and did implicitly determine, that OHM's responses to the Authority's requests and its clarifications of the response to the RFP did not undermine the fairness of the bidding process (see SFL §§ 139–j ; 163  [f] ), and ALB has not demonstrated any irrationality in such determination.
6. The Court has considered petitioner's remaining arguments and contentions, but finds them to be without merit.
Richard M. Platkin, J.
Response sent, thank you
Docket No: 901572–18
Decided: June 20, 2018
Court: Supreme Court, Albany County, New York.
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