The N.Y. Court of Appeals found a Town Board was arbitrary in rejecting a low bid based upon criteria not specified in the bid documents. In AAA Carting & Rubbish Removal, Inc. v. Town of Southeast, the Court reversed the Appellate Division and held "accepting a higher bid based on subjective assessment of criteria not specified in the bid request gives rise to speculation that favoritism, improvidence, extravagance, fraud or corruption may have played a role in the decision. One of the primary purposes of the competitive bidding statutes is to guard against such factors...."
The Court found that the decision of the Town Board to award the contract to a higher bidder based upon previously unspecified criteria such as training, cleanliness and age of equipment, when there was never a finding that the low bidder was not a responsible bidder, was not supported by the provisions in the General Municipal Law for bidding on municipal contracts.
The Court went on to note:
"[i]f the Town wishes to have these qualitative factors considered, the proper remedy is not to reject the lowest responsible bid, but to reject all the bids submitted and begin the process anew, incorporating whatever reasonable and nonrestrictive requirements it wishes to consider into the bid solicitation (see Matter of Conduit & Found. Corp., 66 NY2d at 149 ["statutory law specifically authorizes the rejection of all bids and the readvertisement for new ones"]; see also General Municipal Law § 103 )."
-Steven M. Silverberg