11/22/2016

HMYM Wins Groundbreaking Ruling at State’s Highest Court Governing Awards of Municipal Contracts

In 2013, a major school bus transportation company, Acme Bus Corp., retained HMYM to challenge the award of student transportation contracts to its competitors in response to a request for proposals (RFP) issued by the Orange County Department of General Services.  The County had awarded the contracts to the lowest cost proposer in each category, contending that to do so served the “best interests” of the County, and it neglected to follow the criteria in the RFP which, if followed, would have established Acme as the “highest scoring proposer” overall.

HMYM initiated a lawsuit against the County in the Orange County Supreme Court, which rejected its arguments that the award of the contracts was arbitrary and capricious because the County had failed to follow the requirements of the RFP.  The battle was fought through three levels of judicial review which ended with victory for Acme Bus at the State’s highest court in Albany.  As the Court of Appeals instructed, in agreement with HMYM’s arguments, “an award of a contract pursuant to [an RFP] is arbitrary and capricious if the municipality evaluates a proposal using a standard that deviates from a standard expressly set forth in the RFP . . . .  When different standards are applied, the process is subverted.  Changing the expressly defined rules mid-way gives rise to speculation of fraud or corruption.”  Acme Bus Corp. v. Orange County, 28 N.Y.3d 417, 425-26 (2016).