Quest Diagnostics Inc. v. County of Suffolk

21 Misc. 3d 944
New York Supreme Court·Decided September 17, 2008·Published·Cited by 3 cases

Opinion

OPINION OF THE COURT

Arthur G. Pitts, J.

In this hybrid CPLR article 78 proceeding and action for declaratory and injunctive relief petitioner seeks a judgment declaring that Local Law No. 4 (1993) of Suffolk County (adding Suffolk County Administrative Code § A4-13) is illegal, invalid, null and void because it violates General Municipal Law §§ 100-a and 104-b (1); annulling the award by respondent County of Suffolk to respondent Sunrise Medical Laboratories, Inc. of a contract to provide medical laboratory services for the Suffolk County Department of Health on the basis that the award was made in violation of lawful procedure, was affected by error of law, and was arbitrary, capricious and an abuse of discretion; enjoining respondent County of Suffolk from performing any obligation or services pursuant to this contract; and directing respondent County of Suffolk to rebid the medical laboratory services contract or to reconsider the proposals made without regard for Local Law No. 4.

In November 2006, respondent County of Suffolk issued a request for proposals (RFP No. 06/23039) for a contract to provide medical laboratory services for the County. Petitioner Quest Diagnostics Incorporated and respondent Sunrise Medical Laboratories, Inc. submitted proposals in response to the RFR and upon review of the proposals, respondent County notified petitioner by letter, dated July 18, 2007, that it was the successful proposer and requested that petitioner contact the County’s Department of Law to enter into a formal contract. On that same date, respondent Sunrise was notified by the County that Quest was the apparent successful proposer on the RFP In response, respondent Sunrise commenced a CPLR article 78 proceeding* against the petitioner herein and the County alleging, inter alia, that the award of the contract to Quest would be in violation of the County’s local preference law (Local Law No. 4). The order to show cause, dated August 17, 2007 (Bivona, J.), bringing on the article 78 proceeding [946] contained a temporary restraining order enjoining the County from taking any action in furtherance of the laboratory services contract 06/23039 purportedly awarded to Quest and provided that such contract would not take effect pending the hearing and determination of the petition.

In October 2007, respondent County issued a new request for proposals (RFP No. 07/23194) for a contract to provide medical laboratory services for the County. Petitioner Quest, respondent Sunrise and a third laboratory, nonparty North Shore-LIJ Laboratories, submitted proposals in response to the new RFP By letter, dated December 17, 2007, respondent County notified petitioner that respondent Sunrise was the successful proposer on RFP 07/23194.

Petitioner Quest challenges respondent County’s determination to award laboratory services contract 07/23194 to respondent Sunrise on the basis that the County’s local preference law is illegal, null and void and on the basis that the County’s determination that respondent Sunrise was the successful proposer was arbitrary, capricious and unlawful.

“New York has a multitude of procurement statutes applicable to public entities, but the underlying purpose is uniform: to assure prudent use of public moneys and to facilitate the acquisition of high quality goods and services at the lowest possible cost [see, e.g., General Municipal Law § 100-a]” (Matter of New York State Ch., Inc., Associated Gen. Contrs. of Am. v New York State Thruway Auth., 88 NY2d 56, 67 [1996]).

Municipal contracts awarded without resort to competitive bidding, other than those exempted from such requirements pursuant to General Municipal Law § 103, are void and unenforceable (JLJ Recycling Contrs. Corp. v Town of Babylon, 302 AD2d 430 [2003]). In particular, there is an exception to competitive bidding requirements for contracts for services requiring specialized skills or training, including professional services or other services requiring technical expertise (Matter of Fawcett v City of Buffalo, 275 AD2d 954 [2000], lv denied 96 NY2d 701 [2001]; see also Trane Co. v County of Broome, 76 AD2d 1015 [1980]).

The court concludes that there is no merit to petitioner’s contention that the medical laboratory services contract between the County and Sunrise must be set aside as violative of the competitive bidding requirements of General Municipal Law § 103. Because the nature of the work covered by the subject contract required specialized services, it is not subject to statu[947] tory bidding requirements. Respondent County’s award of the contract to respondent Sunrise did not violate General Municipal Law § 103 (Zack Assoc., Inc. v Setauket Fire Dist., 12 AD3d 439 [2004]; see also Matter of Doyle Alarm Co. v Reville, 65 AD2d 916 [1978]), because the award of the laboratory services contract was governed by the provisions of General Municipal Law § 104-b.

General Municipal Law § 104-b provides that goods and services which are not required by law to be procured by political subdivisions pursuant to competitive bidding must be procured in a manner so as to assure the prudent and economical use of public moneys in the best interests of the taxpayers of the political subdivision, to facilitate the acquisition of. goods and services of maximum quality at the lowest possible cost under the circumstances, and to guard against favoritism, improvidence, extravagance, fraud and corruption.

To further these objectives, General Municipal Law § 104-b (1) requires the governing board of every political subdivision, by resolution, to adopt internal policies and procedures governing all procurement of goods and services which are not required to be made pursuant to the competitive bidding requirements of General Municipal Law § 103 or any other general, special or local law.

General Municipal Law § 104-b (2) requires that these policies and procedures contain provisions which, among other things:

“a. prescribe a procedure for determining whether a procurement of goods and services is subject to competitive bidding and documenting the basis for any determination that competitive bidding is not required by law;
“b. provide that . . . alternative proposals or quotations for goods and services be secured by use of written requests for proposals, written quotations, verbal quotations or any other method of procurement which furthers the purposes of this section;
“c. set forth when each such method of procurement will be utilized, taking into account which method will best further the purposes of this section and the cost-effectiveness of the method;
“d. require adequate documentation of actions taken in connection with each such method of procurement;
[948] “e. require justification and documentation of any contract awarded to other than the lowest responsible dollar offeror, setting forth the reasons such an award furthers the purpose of this section; and
“f. set forth any circumstances when, or types of procurement for which, in the sole discretion of the governing body . . . , the solicitation of alternative proposals or quotations will not be in the best interest of the political subdivision.”

Free access — add to your briefcase to read the full text and ask questions with AI

Quest Diagnostics Inc. v. County of Suffolk, 21 Misc. 3d 944 (N.Y. Super. Ct. 2008).

21 Misc. 3d 944 (Quest Diagnostics Inc. v. County of Suffolk) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

Related

The Matter of ACME Bus Corp. v. Orange County
68 N.E.3d 671 (New York Court of Appeals, 2016)
AAA Carting & Rubbish Removal, Inc. v. Town of Southeast
74 A.D.3d 959 (Appellate Division of the Supreme Court of New York, 2010)