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NY’s top court ruled: Awarding taxpayer contracts to anyone but lowest qualified bidder is illegal and raises questions of fraud

June 10, 2011

New York’s top court ruled Thursday that awarding municipal contracts for services such as trash hauling to anyone but the lowest qualified bidder is illegal, and raises questions of favoritism or even fraud.

In establishing the new case law, the Court of Appeals rejected the town of Southeast’s selection of a trash hauler costing more than another company that also met bid specifications. Some members of the Putnam County town board thought the more costly bidder was more qualified and responsible.

Five judges on the Court of Appeals concluded the board’s 2009 choice of Suburban Carting for almost $1.5 million a year over AAA Carting and Rubbish Removal for $1.2 million was arbitrary, capricious and violated town and municipal laws.

Judge Carmen Beauchamp Ciparick wrote there was nothing in the record to support the choice and the bid should have included those other factors.

“Accepting a higher bid based on subjective assessment of criteria not specified in the bid request gives rise to speculation that favoritism, improvidence, extravagance, fraud or corruption may have played a role in the decision,” she wrote.

Ciparick wrote that if the board wanted other factors considered, it should have rejected all three bids received and issued another proposal. Chief Judge Jonathan Lippman and Judges Victoria Graffeo, Robert Smith and Theodore Jones Jr. agreed.

Finally, Courts holding the executive branch accountable for breaking the law.

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