This opinion represents the views of the Office of the State Comptroller at the time it was rendered. The opinion may no longer represent those views if, among other things, there have been subsequent court cases or statutory amendments that bear on the issues discussed in the opinion.
[Edited for Publication]
PUBLIC CONTRACTS -- Contracts Requiring Bidding (bus transportation contracts for separate routes) -- Bidding Monetary Threshold (computation of for bus transportation contracts)
EDUCATION LAW, §305(14); GENERAL MUNICIPAL LAW, §103: When it is known or can be reasonably anticipated that the aggregate amount to be expended for several bus transportation contracts will be in excess of the monetary threshold for purchase contracts in General Municipal Law, §103, competitive bidding is required for each contract. 2 Opns St Comp, 1946, p 308 is superseded.
This is in reply to your inquiry regarding transportation contracts which were let by a school district during the 1989-1990 school year. It appears that in several instances a number of contracts which in the aggregate exceeded the competitive bidding monetary threshold for purchase contracts have been awarded to the same contractor without competitive bidding. According to the information which you provided, the State Education Department and the Comptroller's Office have historically approved for payment those contracts which in the aggregate exceed the threshold provided each was drawn up in an agreement on a separate date. Apparently, this policy was based upon a prior opinion of this Office (2 Opns St Comp, 1946, p 308) which stated that when two transportation contracts, each for a separate route, are let to the same individual and neither of such contracts so let is in excess of the statutory amount, such contracts need not be let by public bid, even though the total amount of both contracts exceeds such sum. This opinion was premised on the fact that the Education Law appeared to contemplate that separate contracts could be let where multiple routes were established.
You have asked us to review the practice of the school district as well as the aforementioned opinion of this Office and determine whether it is consistent with our current view concerning aggregating similar services for the purpose of calculating the competitive bidding monetary threshold. For the reasons outlined below, we believe that the conclusion contained in that opinion is not consistent with our current view on this subject and, therefore, such opinion is hereby superseded.
Transportation contracts for school districts are governed by section 305(14)(a) of the Education Law which provides in part:
All contracts for the transportation of school children ... shall be subject to the approval of the commissioner, who may disapprove a proposed contract if in his opinion, the best interests of the district will be promoted thereby. All such contracts involving an annual expenditure in excess of the amount specified for purchase contracts in the bidding requirements of the general municipal law shall be awarded to the lowest responsible bidder, which responsibility shall be determined by the board of education or the trustees of the district ... .
Section 103(1) of the General Municipal Law provides in part:
... [A]ll contracts for public work involving an expenditure of more than twenty thousand dollars and all purchase contracts involving an expenditure of more than ten thousand dollars shall be awarded by the appropriate officer, board of agency ... to the lowest responsible bidder ... .
Since section 305(14)(a) specifically refers to section 103 of the General Municipal Law for purposes of fixing the dollar level threshold, it is, in our opinion, appropriate to examine the interpretation of section 103 in determining whether bidding can be avoided where contracts for similar services are divided into a number of separate contracts.
It has been the position of this Office that, where a political subdivision knows or can reasonably anticipate that the aggregate amount to be expended on the same or similar goods or services during a fiscal year will exceed the monetary threshold established for purchase contracts or contracts for public work, contracts for such goods or services required within the year are subject to competitive bidding (see 1987 Opns St Comp No. 87-4, p 6; 1981 Opns St Comp No. 81-60, p 62; 1981 Opns St Comp No. 81-103, p 104). To enter into multiple contracts without bidding when it may be anticipated or expected that the aggregate amount of services during the year will cost in excess of the monetary threshold would be splitting a single purchase contract or contract for public work in avoidance of bidding requirements (1980 Opns St Comp No. 80-415, p 120; see Walton v New York, 26 App Div 76, 49 NYS 615 ). However, this does not mean that a political subdivision may not award separate contracts for various component parts of a project. A political subdivision may divide a single project into components and award contracts for each component, but each contract must be competitively bid, notwithstanding that the estimated amount of any individual component is less than the monetary threshold (1980 Opns St Comp No. 80-211, unreported; cf. General Municipal Law, §101).
Accordingly, for the foregoing reasons, it is our opinion that the conclusion expressed in 2 Opns St Comp, 1946, p 308 is inconsistent with current opinions of this Office. Therefore, such opinion is hereby superseded.
January 3, 1992
Timothy J. O'Brien, Chief of State Expenditures
NYS Department of Audit and Control