New York State Chapter, Inc. v. New York State Thruway Authority

207 A.D.2d 26, 620 N.Y.S.2d 855, 148 L.R.R.M. (BNA) 2274, 1994 N.Y. App. Div. LEXIS 13038
CourtAppellate Division of the Supreme Court of the State of New York
DecidedDecember 22, 1994
StatusPublished
Cited by14 cases

This text of 207 A.D.2d 26 (New York State Chapter, Inc. v. New York State Thruway Authority) is published on Counsel Stack Legal Research, covering Appellate Division of the Supreme Court of the State of New York primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
New York State Chapter, Inc. v. New York State Thruway Authority, 207 A.D.2d 26, 620 N.Y.S.2d 855, 148 L.R.R.M. (BNA) 2274, 1994 N.Y. App. Div. LEXIS 13038 (N.Y. Ct. App. 1994).

Opinion

OPINION OF THE COURT

Casey, J.

At issue on this appeal is whether respondent State Thruway Authority can, as part of the competitive bidding process on a public construction project, impose a specification which requires the successful bidder to agree to abide by the provisions of a project labor agreement (hereinafter PLA) negotiated and executed by the project construction manager and the various labor unions that have jurisdiction over the work to be done during the project. Supreme Court held that the use of the PLA violates the competitive bidding provision of Public Authorities Law § 359 because it discourages competition by deterring nonunion bidders and fosters favoritism by dispensing advantages to unions and union contractors. The record establishes that the use of the PLA at issue in this case neither precludes nonunion contractors from bidding on the project nor requires the use of only union employees, and the Thruway Authority had a rational basis for concluding that the use of the PLA promotes the public interest that the competitive bidding statutes are designed to protect. We hold, therefore, that the use of the PLA in this case is a valid bid specification which does not violate the competitive bidding requirement of Public Authorities Law § 359.

The relevant project involves the refurbishment of the Thruway Authority’s Tappan Zee Bridge and, according to the Thruway Authority, is the largest such construction project in size, complexity and cost since the bridge was constructed. Of the 23 major construction projects on the bridge since it was built, the successful bidder in 20 of those projects was a union contractor. Based upon the size of the current project and its prior experience on other projects, the Thruway Authority [29]*29concluded that the likely successful bidder would be a union contractor, which would subject the work to the jurisdiction of some 19 local unions with separate labor contracts having different starting times, scheduling restrictions, holidays, grievance resolution procedures, and other terms and conditions of employment. The Thruway Authority also found that each of the labor contracts was scheduled to expire at some time during the term of the bridge construction project. In addition, one of the prior bridge projects in which a nonunion contractor was the successful bidder had resulted in a labor dispute which, according to respondents, caused delays and added administrative costs. Based upon its prior experience and due to concerns for potential labor relations problems and for potential problems associated with scheduling, the Thruway Authority hired a consultant to investigate the matter and to recommend the best means to achieve the efficient, safe and timely completion of the project.

The Thruway Authority thereafter directed its consultant to negotiate with the various trade unions having jurisdiction over the work to be performed during the project and to seek concessions from all the unions concerning work rules and other terms and conditions. The result of the consultant’s efforts was the PLA which, inter alia, creates uniform procedures for dealing with all disputes, contains a comprehensive no-strike clause, establishes a standardized work week, permits flexibility in scheduling, and contains other provisions which, according to the Thruway Authority, standardize the terms and conditions of employment and will reduce the cost of the project. The PLA requires that employees be hired through union halls, except that contractors and subcontractors are permitted to retain up to 12% of their current work force. Union halls are expressly prohibited under the PLA from discriminating in the referral process against prospective employees based upon their union membership or lack thereof. The PLA also specifically recognizes that the successful bidder need not be a union contractor and that the unions will comply with the terms of the PLA regardless of whether the successful bidder is a union or nonunion contractor. The Thruway Authority approved the PLA and included in the project’s specifications the requirement that the successful bidder and all subcontractors comply with the terms of the PLA.

Our analysis begins with petitioners’ claim that the use of the PLA effectively created a "union only” qualification or [30]*30precondition. The courts have struck down qualifications or preconditions imposed on prospective bidders for reasons other than the public policy fostered by the competitive bidding statutes (see, e.g., Associated Bldrs. & Contrs. v City of Rochester, 67 NY2d 854). There is no evidence in the record, however, to demonstrate that the PLA requirement limits prospective bidders to union contractors only. An officer of one of petitioners, a nonunion contractor, alleges that the PLA bars his company from submitting a bid, but he offers no explanation or reason for his conclusion. The PLA is specifically made applicable regardless of whether the successful bidder is a union or nonunion contractor. In view of this provision, there is no support for petitioners’ claim that the PLA excludes nonunion contractors. Nor is there any support for the theory that the PLA creates a precondition which requires "union only” labor. The PLA requires only that, with certain exceptions, at least 88% of a contractor’s employees be hired through referrals from the union hall that has jurisdiction over the particular trade, and that all employees pay the equivalent of union dues. Discrimination against nonunion employees in the referral process is prohibited, and employees who are hired are not required to join the union. In addition to permitting contractors to hire a core of their current employees without using union hall referrals, the PLA also recognizes the right of the contractors to determine the competency of the employees referred by the union hall, to select the employees to be laid off, and to use any other source of employees if a union hall referral is not made within 48 hours.

Assuming that the use of the PLA somehow discourages competition in the bidding process, we conclude that the purpose of Public Authorities Law § 359 and this State’s other bidding statutes is not to foster competition merely for the sake of having unfettered competition. Rather, the competitive bidding required by the statutes is a means of achieving the more basic purpose of obtaining the best work at the lowest possible price while guarding against favoritism, improvidence, extravagance, fraud and corruption (see, Jered Contr. Corp. v New York City Tr. Auth., 22 NY2d 187, 192-193). The statutes are not intended to benefit the bidders and should be construed and administered with sole reference to the public interest (supra, at 193). Thus, specifications for public projects are not illegal merely because they tend to favor one manufacturer or contractor over another, but "an objectionable and [31]*31invalidating element is introduced when specifications are drawn to the advantage of one manufacturer not for any reason in the public interest but, rather, to insure the award of the contract to that particular manufacturer” (Gerzof v Sweeney, 16 NY2d 206, 211). To justify specifications which favor one manufacturer or contractor over another, it must be shown that the specifications are based upon the public interest promoted by the competitive bidding statutes, not just any public interest (compare, Varsity Tr. v Saporita, 71 AD2d 643, affd 48 NY2d 767, with American Inst. for Imported Steel v Office of Gen. Servs., 47 AD2d 118, affd 38 NY2d 991).

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207 A.D.2d 26, 620 N.Y.S.2d 855, 148 L.R.R.M. (BNA) 2274, 1994 N.Y. App. Div. LEXIS 13038, Counsel Stack Legal Research, https://law.counselstack.com/opinion/new-york-state-chapter-inc-v-new-york-state-thruway-authority-nyappdiv-1994.