PUBLIC CONTRACTS -- Contracts Not Requiring Bidding (purchases of equipment by certain public authorities); (solicitation of competition for)
PUBLIC AUTHORITIES -- Competitive Bidding Requirements (purchases of equipment)
PUBLIC AUTHORITIES LAW, §§2725, et seq.; GENERAL MUNICIPAL LAW, §§103, 120-w: There is no statutory or common law competitive bidding requirement for purchases of equipment by the Western Finger Lakes Solid Waste Management Authority. However, in order to assure that equipment purchases are made in furtherance of the corporate purposes of the Authority and that the Authority has a rational basis for choosing a vendor, it is generally advisable for the Authority to solicit competition for such procurements.
You ask whether the purchase of equipment such as trucks, trailers, bins and containers to be used in connection with a recycling program by the Western Finger Lakes Solid Waste Management Authority would be subject to competitive bidding.
The Western Finger Lakes Solid Waste Management Authority ("the Authority") was created and is governed by title 30 of article 8 of the Public Authorities Law (§§2725, et seq.). Section 2729(3) of the Public Authorities Law authorizes the Authority to "acquire in the name of the authority property, real, personal or mixed, or any interest therein, without limitation, for its corporate purposes". Subdivision 5 of section 2729 authorizes the Authority to "collect, receive, extract, transport, process, dispose of, sell, store, convey, recycle and deal with, in any lawful manner and way, solid waste ..." Thus, it is clear that the Authority is authorized to purchase equipment to be used in connection with a recycling program.
With respect to whether such equipment purchases are subject to competitive bidding, we note initially that there is no generally applicable statutory or common law competitive bidding requirement for procurements of equipment by public authorities (see e.g., Matter of Marino v Town of Ramapo, 68 Misc 2d 44, 326 NYS2d 162; Thompson v Dormitory Authority, 48 Misc 2d 296, 264 NYS2d 842; cf. Public Authorities Law, §2603-a which provides that, with certain exceptions, purchase contracts in excess of $5,000 for supplies, materials or equipment involving steel products must provide that steel components of these items be produced or made in whole or substantial part in the United States, its possessions or territories). While General Municipal Law, §§101 and 103 contain competitive bidding requirements for political subdivisions and districts therein, the term "political subdivision" is defined for purposes of section 103 to mean "a municipal corporation, school district, district corporation and board of cooperative education services". Therefore, since the Authority is constituted as a public benefit corporation (Public Authorities Law, §2727), it is neither a political subdivision nor a district therein (see General Construction Law, §66; Marino, supra). Also, State Finance Law, §174, which prescribes competitive bidding requirements for contracts with a state department or institution, or other agency of a department, does not apply to public benefit corporations (Hanover Sand & Gravel v New York State Thruway Authority, 65 AD2d 860, 410 NYS2d 381; see also Plumbing, Heating, etc. v New York State Thruway Authority, 5 NY2d 420, 185 NYS2d 534, holding that the separate specification requirement of State Finance Law, §135 was not applicable to the Thruway Authority).
General Municipal Law, §120-w, which defines the term "municipality" to include public authorities (General Municipal Law, §120-w[a]), contains provisions relative to agreements for solid waste management, collection and disposal. Subdivision (4)(e) of section 120-w provides that contracts entered into between a municipality and any person pursuant to section 120-w may be awarded pursuant to either public bidding in compliance with General Municipal Law, §§101 and 103 or pursuant to the request for proposals procedure set forth in that subdivision. However, since the purchase contracts in question would be entered into pursuant to Public Authorities Law, §2729 and not General Municipal Law, §120-w, the procurement requirements of section 120-w would not apply unless its provisions are made applicable to these purchases by some other statute.
Since there is no generally applicable competitive bidding requirement for public authority equipment purchases, the Authority's own enabling legislation must be examined to determine whether it requires such contracts to be awarded pursuant to competitive bidding. In this regard, section 2740 of the Public Authorities Law provides as follows:
As noted, General Municipal Law, §120-w(4)(e) requires either competitive bidding or the prescribed request for proposals procedure. It is clear, however, that the phrase "(s)uch awards", as used in connection with the requirements of General Municipal Law, §120-w, is a reference back to contracts or orders for work, material or supplies performed or furnished in connection with construction. Therefore, it is our opinion that section 2740 does not prescribe a competitive bidding requirement for purchases other than purchases of materials and supplies in connection with construction (see Hanover, supra, in which the court held that the competitive bidding requirement in Public Authorities Law, §359 for "construction, reconstruction and improvements" did not apply to purchases of winter road abrasives). Further, we are aware of no other provision of the Authority's enabling act which contain competitive bidding requirements.
While we find no statutory or common law competitive bidding requirement for purchases of equipment by the Authority, we note that the Authority is a public corporation created to perform essential governmental functions for the benefit of the people of the participating counties and the State (Public Authorities Law, §2727). Its corporate purposes are specifically declared to be public purposes (id.). In order to assure that equipment purchases are made in furtherance of the corporate purposes of the Authority and that the Authority has a rational basis for choosing an equipment vendor (see Hanover, supra, majority and dissenting opinions), it is our opinion that, notwithstanding the lack of an express statutory or common law bidding requirement, it is generally advisable for the Authority to solicit competition for such procurements. Whether competition is solicited pursuant to a competitive bidding process or a less formal method, such as obtaining proposals or written or verbal quotations, would depend on the nature of the particular purchase. In this regard, it may also be advisable for the Authority to establish internal purchasing policies and procedures describing, among other things, the methods of procurement to be used (cf. Public Authorities Law, §2879 requiring certain public authorities to adopt guidelines regarding the use, awarding, monitoring and reporting of personal service contracts, including requirements regarding selection of contractors on a competitive basis).
October 26, 1988