Unsatisfactory Performance Leads To Finding Of Non-Responsibility

Written By: Randy J. Heller


The court upholds the decision of the Suffolk County Water Authority which found a low bidder to be non-responsible as a result of an unsatisfactory performance rating on an earlier project.

Lunati Paving & Construction was the low bidder to perform paving work for the Suffolk County Water Authority. Two weeks after the bid opening, the Authority advised Lunati that it would recommend a determination of “non-responsibility” on the basis of Lunati’s unsatisfactory performance under a prior contract which consisted of substantially the same scope of work. The unsatisfactory performance consisted of delays in the completion of work orders, as well as unprofessional conduct and the behavior of its personnel.
Lunati was granted several opportunities, in person and in writing, to address the issues that had arisen under the prior contract. After evaluating Lunati’s response, the Authority’s Board Members passed a resolution rejecting its bid as non-responsible.
The contractor brought an Article 78 proceeding arguing that the Authority’s resolution was arbitrary and capricious, and demonstrated bad faith, malice, and disparate treatment. The court rejected Lunati’s petition.
The court acknowledged that competitive bidding statutes for public work ordinarily provide for an award to the lowest bidder. But public owners are also required to determine the responsibility of the bidder and, where good reason exists, the low bid may be disapproved. The discretion of the municipal entity may not be overturned unless “no rational basis exists for its conclusion.”
Here, Lunati failed to meet its burden of proving that the Authority’s decision was arbitrary and capricious or without a rational basis, and its efforts to overturn the decision failed.
This case reminds contractors yet again that there is more to obtaining a public works contract than submitting the lowest bid. Unsatisfactory performance ratings should be challenged and rebutted, where possible, lest future work is placed in jeopardy for reasons of non-responsibility.

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Randy J. Heller


For over forty years, Mr. Heller has specialized in construction law and litigation, representing some of the largest and most successful contractors in the nation.

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