SUPREME COURT OF THE STATE OF NEW YORK

Appellate Division, Fourth Judicial Department

791.1 

CA 12-00843 

PRESENT: SCUDDER, P.J., SMITH, FAHEY, LINDLEY, AND MARTOCHE, JJ. 

 

IN THE MATTER OF ACCADIA SITE CONTRACTING, INC., 

PETITIONER-APPELLANT, 

V MEMORANDUM AND ORDER

ANTHONY F. CARUANA, SUPERVISOR, TOWN OF TONAWANDA, 

MEMBERS OF TOWN OF TONAWANDA BOARD, IN THEIR 

OFFICIAL CAPACITIES, YARUSSI CONSTRUCTION, INC., 

AND CONCRETE APPLIED TECHNOLOGIES, INC., 

RESPONDENTS-RESPONDENTS. 

 

LIPSITZ GREEN SCIME CAMBRIA LLP, BUFFALO (JEFFREY F. REINA OF

COUNSEL), FOR PETITIONER-APPELLANT. 

DUKE, HOLZMAN, PHOTIADIS & GRESENS LLP, BUFFALO (PATRICIA GILLEN OF

COUNSEL), FOR RESPONDENT-RESPONDENT CONCRETE APPLIED TECHNOLOGIES,

INC. 

COLUCCI & GALLAHER, P.C., BUFFALO (PAUL G. JOYCE OF COUNSEL), FOR

RESPONDENTS-RESPONDENTS ANTHONY F. CARUANA, SUPERVISOR, TOWN OF

TONAWANDA, AND MEMBERS OF TOWN OF TONAWANDA BOARD, IN THEIR OFFICIAL

CAPACITIES.

 

Appeal from a judgment (denominated order) of the Supreme Court,

Erie County (John F. O’Donnell, J.), entered April 23, 2012 in a

proceeding pursuant to CPLR article 78. The judgment dismissed the

proceeding and vacated a temporary restraining order. 

It is hereby ORDERED that the judgment so appealed from is

unanimously affirmed without costs.

Memorandum: Petitioner commenced this CPLR article 78 proceeding

seeking, inter alia, to restrain the Town of Tonawanda respondents

(collectively, Town) from proceeding on a contract with respondent

Concrete Applied Technologies, Inc. (CATCO), the second lowest bidder

for a public works project aimed at repairing and improving the Town’s

sanitary sewer system (project), and requiring the Town to re-bid the

contract for the project. After granting petitioner a temporary

restraining order (TRO) pending a hearing and later holding such a

hearing, Supreme Court dismissed the proceeding and vacated the TRO. 

We granted a stay pending this expedited appeal by petitioner, and now

affirm. 

Pursuant to the terms of the “bid book” provided to prospective

bidders, they were required to agree to all of the contractual
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CA 12-00843 

provisions, including a provision that requires the winning bidder to

indemnify the Town for any claims “arising out of or incidental to”

work on the project. Additionally, the bid book informed prospective

bidders that the Town would not accept “[c]onditional bids.”

Upon reviewing the specifications for the project, petitioner, a

prospective bidder, became concerned about the property damage that

could result from performing the “sheet piling” component of the

project. In a letter dated January 11, 2012, a representative of

petitioner informed a representative of the entity hired by the Town

to oversee the project that, “should [petitioner] be the low bidder on

the project, [petitioner] will not be held responsible for any damage”

stemming from the sheet piling work. The letter also stated that

petitioner “wishe[d] to go on record prior to the bid regarding this

situation and will be held harmless should any damage claims [arise]

from the piles being driven through the clay strata.”

Petitioner thereafter submitted a compliant bid proposal in which

it affirmed its understanding of the terms of the contract governing

the project and neither referenced nor attached its pre-bid letter. 

When the Town publicly opened the seven bids it received for the

project, petitioner’s bid was the lowest and CATCO’s bid was the

second lowest. By a subsequent resolution, the Town determined that

petitioner’s bid was made conditional by its pre-bid letter and was

therefore nonresponsive. The Town thus awarded the project to CATCO,

the second lowest bidder.

A municipality that solicits bids for a public works project

generally must award the contract for that project to the “lowest

responsible bidder” (Town Law § 122; see General Municipal Law § 103

[1]; Matter of AAA Carting & Rubbish Removal, Inc. v Town of

Southeast, 17 NY3d 136, 142). If a bid fails to comply with bid

specifications, the municipality may waive such noncompliance “if the

defect is a mere irregularity and it is in the best interests of the

municipality to do so” (Le Cesse Bros. Contr. v Town Bd. of Town of

Williamson, 62 AD2d 28, 32, affd 46 NY2d 960). If, however, “the

variance between the bid and the specification is material or

substantial, . . . the defect may not be waived and the municipality

must reject the bid so that all bidders may be treated alike and so

that the possibility of fraud, corruption or favoritism is avoided”

(id.). The municipality “has the right to determine whether a

variance from bid specifications is material” (Matter of AT&T

Communications v County of Nassau, 214 AD2d 666, 667), and such a

determination “ ‘must be upheld by the courts if supported by any

rational basis’ ” (Diamond D Constr. Corp. v County of Erie, 209 AD2d

922, 923). A variance from bid specifications is material, and thus

cannot be waived by a municipality, if the variance “affect[ed] the

competitive character of the bidding” and gave the bidder “a

substantial advantage or benefit not enjoyed by the other bidders” (Le

Cesse Bros. Contr., 62 AD2d at 32; see Diamond D Constr. Corp., 209

AD2d at 922-923). In a CPLR article 78 proceeding challenging a

municipality’s handling of bids for a public works project, the

municipality’s “discretionary decision [to reject any bids] ought not

to be disturbed by the courts unless [that decision is] irrational,
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CA 12-00843 

dishonest or otherwise unlawful” (Matter of Conduit & Found. Corp. v

Metropolitan Transp. Auth., 66 NY2d 144, 149).

Here, we conclude that the determination of the Town that

petitioner’s bid was conditional and nonresponsive, and thus

constituted a material variance from the project’s bid specifications,

was rational, honest, and lawful (see generally id.). The unequivocal

language of petitioner’s pre-bid letter was such that it was

reasonable for the Town to conclude that the term stated therein

concerning the refusal to be held liable for any damage arising from

the sheet piling work was intended to impose a condition on

petitioner’s subsequent bid proposal regardless of whether the pre-bid

letter was attached to or otherwise incorporated into that proposal. 

Because petitioner indicated prior to submitting its bid that it did

not intend to comply with the indemnification clause in the contract

governing the project with respect to an apparently risky component of

the project to which other bidders would be subject, we conclude that

the Town had a “ ‘rational basis’ ” for determining that petitioner’s

bid materially deviated from the bid specifications (Diamond D Constr.

Corp., 209 AD2d at 923; see generally Le Cesse Bros. Contr., 62 AD2d

at 31-32). Thus, it was reasonable for the Town to determine that

petitioner had “a substantial advantage or benefit not enjoyed by the

other bidders” (Le Cesse Bros. Contr., 62 AD2d at 32), because the

Town reasonably could have believed that, if other bidders had known

that they could shift liability to the Town for claims arising out of

the sheet piling work, their bids would have been lower. Inasmuch as

it was reasonable for the Town to deem petitioner’s bid variance

“material,” it necessarily follows that it was reasonable for the Town

to reject petitioner’s bid and to accept the next lowest bid (id.).

Petitioner’s contention that the parol evidence rule barred the

Town from considering its pre-bid letter is without merit because

petitioner’s bid was a mere offer to contract (see S.S.I. Invs. v

Korea Tungsten Min. Co., 80 AD2d 155, 157-159, affd 55 NY2d 934; Le

Cesse Bros. Contr., 62 AD2d at 33), and because there was no written

contract between the Town and petitioner (see generally W.W.W. Assoc.

v Giancontieri, 77 NY2d 157, 161-162). Moreover, contrary to

petitioner’s contention, it was not required to send its pre-bid

letter pursuant to the terms of the “Information to Bidders” portion

of the bid book. The section to which petitioner refers states that

prospective bidders should notify the Town of “discrepancies[] in, or

omissions from the Drawings or Contract Documents” and should inquire

if they are “in doubt as to their meaning,” but petitioner’s letter

did neither. Finally, although petitioner is correct that CATCO and

several other bidders, like petitioner, estimated a cost of $0.01 per

square foot for the sheet piling work, which may have been an

indication that those bidders did not intend to carry out that part of

the project, the fact remains that only petitioner expressly stated

its intention to demand that the contract be altered to hold it

harmless for that activity. 

Entered: June 15, 2012 Frances E. Cafarell

Clerk of the Court