In the Matter of ACME Bus Corp., Appellant,v.Orange County, et al., Respondents.

Brief

N.Y.Oct 20, 2016

To be Argued by: DAVID A. DONOVAN Time Requested: 5 Minutes Qtourt of l\pptals §tutr of N rUt "ork In the Matter of the Application of ACME BUS CORP., For Relief Pursuant to Article 78 of the CPLR - against- ORANGE COUNTY, ORANGE COUNTY DEPARTMENT OF GENERAL SERVICES, QUALITY BUS SERVICE, LLC and VW TRANS, LLC, Petitioner-Appellant, Respondents-Respondents. BRIEF FOR RESPONDENT-RESPONDENT QUALITY BUS SERVICE, LLC DICKOVER, DONNELLY & DONOVAN, LLP Attorneys for Respondent-Respondent Quality Bus Service, LLC 28 Bruen Place P.O. Box 610 Goshen, New York 10924 (845) 294-9447 Of Counsel: DAVID A. DONOVAN Appellate Division - Second Department Docket No. 2013-09516 Appeal Press, LLC - (914) 761-3600 (212) 267-6602 (17350) TABLE OF CONTENTS COUNTERSTATEMENT OF QUESTIONS PRESENTED. 5 PRELIMINARY STATEMENT. 6 STATEMENT OF FACTS. 8 ARGUMENT POINT I THE COUNTY'S DETERMINATION TO AWARD THE CONTRACT FOR ZONES 1 AND 2 TO QUALITY Bus SERVICE LLC WAS SUPPORTED BY A RATIONAL BASIS AND WAS NEITHER ARBITRARY NOR CAPRICIOUS A. Pennissible Scope of Judicial Review B. Application of Scope of Judicial Review to the Allegations of Acme 1. The County's Detennina- tion that Quality has the requisite experience in providing preschool special education transportation is supported by a rational ba- SIS -2- 11 11 12 13 2. The County's determina- 14 tion that Quality has sub- mitted references that meaningfully attest to their prior experience is support- ed by a rational basis 3. The County's determina- 15 tion that Quality is in supe- rior financial condition is supported by a rational ba- SIS 4. The County's determina- 16 tion that Quality presented a strong transition plan is supported by a rational ba- SIS POINT II ORANGE COUNTY'S CONTRACT 17 AWARD TO QUALITY AND VW WAS IN ACCORDANCE WITH THE REQUffiEMENTSOFGENERAL MUNICIPAL LAW SECTION 104-B POINT III NEITHER EDUCATION LAW SECTION 19 305(14) NOR FAMILY COURT ACT 236 ARE ApPLICABLE TO THIS PROCEEDING CONCLUSION 20 -3- TABLE OF AUTHORITIES Cases Acme Bus Corp., v. Board of Education of the Roosevelt Union Free School District, 91 N. Y. 2d 51 .................................................................. 18 Acme Bus Corp., v. Orange County, et al., 126 A.D. 3d 688 .............. 10, 19 Bill's Towing Service, Inc. v. County of Nassau, 83 A.D. 3d 698, 700 .... 11 Global Tel*link v. State Dept. of Correctional Services, 70 A.D.3d 115.11 Matter of Partnership 92 L.P. v. New York State Division of Housing and Community Renewal, 46 A.D. 3d 425 ........................................... 12 Matter of Pell v. Bd. of Ed. of Union Free School District, 34 N. Y.2d 222 .............................................................................................................. 12 Matter of Promissor, Inc. v. New York State Ins. Dept., 307 A.D.2d 46.11 Paramount Communications v. Gibraltar Casulty Co. 90 N. Y.2d 507 .. 12 Powerhouse Diesel Services, Inc. v. Hirst, 23 Misc. 3d 1229 .................. 12 Statutes CPLR Section 7803(3)............ .... ... .................. ............... ...... ...... 11 Family Court Act Section 236 ........................................................ 19 General Municipal Law Section 103 ................................................... 8, 17 General Municipal Law Section 104-b ................................................. 9,17 -4- COUNTERSTATEMENT OF QUESITONS PRESENTED 1. Was Orange County's determination to award the transportation contract for Zones and 1 and 2 to Quality Bus Service, LLC supported by a rational basis? The Court below answered this inquiry in the affirmative. 2. Was the request for proposals issued by Orange County subject to Educaiton Law Section 305(14) and/or Family Court Act Section 236? The Court below determined that neither Education Law Section 305(14) nor Family Court Act Section 236 were applicable to the request for proposals is- sued by the County of Orange. -5- PRELIMINARY STATEMENT The Appellants ACME Bus Corp., hereinafter "Appellants" and/or "ACME," challenge, inter alia, the determination of Orange County and the Orange County Department of General Services, hereinafter collectively the "County," to the award of a certain contract for the transportation of preschool special education children to Quality Bus Service, LLC, hereinafter "Quality," on the basis that the County's determination to award said contract to Quality was arbitrary and capri- CIOUS. The Appellants also challenge, on the same basis, the award of a contract re- garding the same services to the co-respondent VW Trans, LLC, hereinafter "VW." Appellants over arching claim is against the County. Their claim as relates to the County specifically challenges, again on the same basis, both the contents of the Request for Proposals, hereinafter the"RFP," prepared by the County with re- gard to soliciting proposals for the transportation of preschool special education children as well as the County's evaluation of the proposals submitted. To avoid repetition to the greatest extent possible as well as avoid the duplica- tion of arguments, the Brief submitted herein on behalf of Quality will largely con- -6- fine itself to the specific allegations made by Appellants regarding Quality and to the legal issues which relate to those allegations. -7- STATEMENT OF FACTS This Statement of Facts is generally limited to the facts of this case as they re- late to Quality and the allegations raised by ACME relative to the ability of Quality to satisfy the requirements of the County's RFP. Quality was founded in September of2007. After nearly six (6) years in exist- ence, the company had grown by early 2013 to an operation having over 130 vehi- c1es and more than 220 employees. (R-I089.) It specializes in pupil transportation and operates an Orange County wide special education bus system. (R-I089.) On May 28,2013 the Countyl issued a Request for Proposals ("RFP") solicit- ing duly qualified companies to submit proposals regarding a County contract that would provide for the transportation of preschool special education children throughout Orange County2. (The RFP is set forth in full at RA8 through R-lll). It is uncontroverted that transportation services for special needs children are specialized services and therefore fall beyond on the ambit of the competitive bid- ding requirements imposed by General Municipal Law Section 103. Accordingly, 1 Pursuant to New York State Public Health Law Section 2559-a, Orange County is required to provide "suitable" transportation services for the "early intervention program for infants and tod- dlers with disabilities." 2 ACME had previously been awarded the contract by the County to transport preschool special needs children. It was servicing the entire contract area at the time RFPs were solicited in May of2013. -8- the Orange County RFP was prepared in accordance with the terms and provisions of General Municipal Law Section 104-b, entitled Procurement policies and pro- cedures. As required, the County has heretofore duly adopted a Procurement Policy (RI861-1878) which sets forth the rules and procedures for the procurement of professional services. This Procurement Policy was duly adopted by the Orange County Legislature in 2012. (R-1879.) The details of the RFP at issue herein are set forth at length in the Record on Appeal. They need not be repeated herein except to point out that the County elected to divide the service area for the transportation of pre-school special educa- tion children into three (3) zones, designated as Zone 1, Zone 2 and Zone 3. Bid- ders were invited to submit proposals for each Zone or anyone Zone. The criteria for award of the Contract was spelled out in the RFP. (See R-77-79 ). Thereafter, on or about June 28,2013, and in response to the RFP, the County received proposals from three entities, ACME,VW and Quality. ACME and Quality submitted proposals for all three zones and VW submitted a proposal only for Zone 3. After an evaluation of the proposals, the County on July 15,2013 awarded the contract for Zones 1 and 2 to Quality and awarded the contract for Zone 3 to VW. (R-1802-1804.) Thereafter, ACME commended an Article 78 proceeding seeking to vacate the -9- contract awards to Quality and VW as being "arbitrary and capricious," "affected by an error of law" and "as made in violation of lawful procedure." The Article 78 proceeding commenced by ACME also sought relief that would award "the trans- portation contract to Petitioner ACME Bus Corp." (R-12 to R-47). By decision dated August 13,2013 the Honorable Elaine Slobod, J.S.C., spe- cifically declined "Petitioner's tacit invitation to redo the County Respondent's scoring of the proposals" and dismissed the Petition on the merits. (R-3 to R-7). ACME thereafter took an appeal of Judge Slobod's decision to the Appellate Division, Second Department. The Appellate Division affirmed Judge Slobod's decision (Acme Bus Corp. v. Orange County, et ai., 126 A.D.3d 688). ACME then sought leave to appeal to the Court of Appeals. By Decision and Order dated September 22,2015, the Court of Appeals granted ACME's request. -10- POINT I THE COUNTY'S DETERMINATION TO AWARD THE CONTRACT FOR ZONES 1 AND 2 TO QUALITY Bus SERVICE, LLC WAS SUPPORTED BY A RATIONAL BASIS AND WAS NEITHER ARBITRARY NOR CAPRICIOUS. A. Permissible Scope of Judicial Review The law is clear and well-established that a Court's review of an agency's de- termination to award or deny a contract is limited to ascertaining whether there is a rational basis to support the agency's determination. (Global Tel*link v. State Dept. o(Correctional Services, 70 A.D.3d 1157). The burden of proof demonstrat- ing the lack of a rational basis rests with the party challenging the contract award. (Global Tel*link, Id.; Matter o(Promissor, Inc. v. New York State Ins. Dept., 307 A.D.2d 460). Absent a determination that a contract award "was made in violation of lawful procedure, was affected by an error of law or was arbitrary and capricious or an abuse of discretion" the contract award must be upheld. (CPLR Section 7803(3) Bill's Towing Service, Inc. v. County o(Nassau, 83 A.D.3d 698, 700; Matter o( Promissory, Id. In the case at bar, the factual allegations advanced by ACME simply do not -11- demonstrate that the contract awarded to Quality was made in violation of lawful procedure, was affected by an error of law or was arbitrary and capricious or an abuse of discretion. Rather, ACME's essential allegation is that it "should" have been awarded more points than the competition in the scoring system established by the County in the RFP. Essentially, ACME wants the Court to substitute its judgment for that of the County. This the Court cannot do. Courts have consistently held that even where a different conclusion could be reached on the same evidence, a court may not substitute its own judgment for that of an administrative agency absent a finding that the challenged determination lacks a rational basis. (Matter o(Partnership 92 L.P. v. New York State Division o( Housing and Community Renewal, 46 A.D.3d 425). Once it has been determined that an agency's determination has a rational basis, "the courts prerogative to annul or modify the decision ends." (Powerhouse Diesel Services, Inc. v Hirst, 23 Misc. 3d 1229A; Matter o(Pell v. Bd. o (Ed. o(Union Free School District, 34 N.Y.2d 222; Paramount Communications v. Gibraltar Casualty Co., 90 N.Y.2d 507). B. Application of Scope of Judicial Review to the Allegations of ACME The crux of ACME's argument as it relates to the contract award to Quality is that ACME "should have been" awarded more points than Quality in the various categories of evaluation set forth in the RFP. Specifically, as relates to Quality, -12- ACME makes the following allegations: 1. Quality lacks experience in preschool special education transportation (See Appellant's Briefpages 34-36); 2. ACME should have been awarded more points than ACME in various categories of the RFP (See Appellant's Briefpages 32-45). As will be hereinafter demonstrated, ACME's analysis - which, as Justice Slo- bod correctly pointed out, simply invites the court to "redo" the scoring of the RFP - is without merit. The appeal should be dismissed. 1. The County's Determination that Quality Has the Requisite Experi- ence in Providing Preschool Special Education Transportation is Sup- ported by a Rational Basis. The criteria to be evaluated relative to preschool special education transporta- tion experience is set forth in the Record on Appeal at page 78. It states as fo1- lows: Each committee member will be evaluate the Offerors previous experience in providing preschool special education services to counties and school districts of similar size and geographic makeup as Orange County and assign a numeric value that will range from a low of 0 points to a high of 10 points. Quality has extensive experience in connection with the transportation of pre- school children with handicapping conditions. Quality's submission in response to the County's RFP, set forth at R-1095 through 1098, details their prior experience -13 - in preschool special education transportation. Clearly the experience detailed therein provided the County a rational basis for each evaluator to assign the points given to Quality in the evaluation of this criteria and further provided a rational basis to the County to conclude that Quality pos- sessed the requisite experience in providing preschool special education transporta- tion services. 2. The County's Determination that Quality Has Submitted References that Meaningfully Attest to Their Prior Experience is Supported by a Rational Basis The criteria regarding the references required in the RFP is set forth on the Record on Appeal at page 78. It states as follows: The Offeror must include a minimum of three references with contact information for each reference. Each committee member will evaluate the Offeror's references and assign a numeric value that will range from a low of 0 points to a high of 10 points. Quality has provided references as required by the RFP. All references attest that Quality has provided superior service. Clearly these letters provided the County a rational basis to conclude that Quality possessed the requisite references relative to providing preschool special education transportation services. -14- 3. The County's Determination that Quality is in Superior Financial Condition is Supported by a Rational Basis The Record on Appeal, at page 79, set forth the criteria to be evaluated regard- ing financial stability. Specifically, the criteria established was as follows: The Offeror must include the latest three years of audited financials to demonstrate the company's financial strength. Each committee member will evaluate the offeror's program and assign a numeric value that will range from a low of 0 points to a high of 5 points. (Record on Appeal R-1178 through 1217). As required by the RFP, Quality has submitted financials which demonstrate profitability each year and demonstrate the superior financial condition of Quality. Moreover, Quality's submission contained proof of a $2,000,000.00 credit line along with proof of financing for 3.5 million dollar per vehicle acquisitions in con- nection with the RFP. Moreover, the methodology utilized by ACME to assess "financial stability" does not properly account for Quality's size in relation to ACME's size. ACME is a larger entity that requires greater working capital, a higher line of credit and larger revenue because the company is substantially larg- er. When financial stability is assessed in relation to company size, Quality pos- sesses financial stability equal to or greater than that of ACME. Clearly, the financial condition evidenced by the documentary information submitted by Quality provided the County a rational basis to conclude that Quality possessed the requisite financial stability to be awarded the contract for Zones 1 -15 - and 2 to provide preschool special education transportation services. 4. The County's Determination that Quality Presented a Strong Transi- tion Plan is Supported by a Rational Basis The criteria to be evaluated relative to the required Transition Plan is set forth at the Record on Appeal at page 79. It provides as follows: seq. The Offeror must submit a Transition Plan including key personnel (with their resumes), maintenance and office facilities and overall response to the scope of services. Each committee member will evaluate the offeror's programs and assign a numeric value that will range from a low of ° points to a high of 20 points. Quality's Transition Plan is set forth in the Record on Appeal at R-1230, et The detailed Transition Plan clearly provided the County a rational basis to conclude that Quality submitted a satisfactory Transition Plan more than sufficient to support the contract award to Quality. -16 - POINT II ORANGE COUNTY'S CONTRACT AWARD TO QUALITY AND VW WAS IN ACCORDANCE WITH THE REQUIREMENTS OF GENERAL MUNICIPAL LAW SECTION 104-b . This case is not a matter of the classic award of a contract to the "lowest re- sponsible bidder" under General Municipal Law Section 103. Rather, the award of the contract at issue in this case is governed by the terms and provisions of General Municipal Law Section 104-b. This statute, by its express terms, seeks to assure the prudent and economical use of public monies in the best inter- est of the taxpayers in the political subdivision or district, to facilitate the acquisition of goods and services of maximum quality at the lowest possible cost under the circumstances, and to guard against favoritism, improvidence, extravagance, fraud and corruption. [General Municipal Law Section 104- b(1)]. Here, there is no allegation of favoritism, improvidence, extravagance, fraud and corruption. Nor is there any allegation that the contract awards do not assure the prudent and economical use of public monies nor is there any allegation that the contract awards do not facilitate the maximum quality of service at the lowest possible cost under the circumstances. Nor does Acme aver that it would have submitted any additional or different information in its response to the RFP. Nor does ACME aver that it would have submitted any different or additional infor- mation in its response to the RFP. -17 - Rather, the essential allegation is that the County should have scored the proposals in a different manner so as to permit the contract to be awarded to ACME. As stated by this Court in Acme Bus Corp. v. Board of Education of the Roosevelt Union Free School District, 91 N.Y.2d 51, "Petitioner has the burden to demonstrate 'actual' impropriety, unfair dealing or some other violation of statuto- ry requirements when challenging an award of a public contract (internal citations omitted). Respectfully, Petitioner has not met its burden. -18 - POINT III NEITHER EDUCATION LA W SECTION 305(14) NOR FAMILY COURT ACT 236 ARE ApPLICABLE TO THIS PROCEEDING. Education Law Section 305(14)(0 provides, in pertinent part, that when a Board of Education or a Trustee "of a school district elects to receive proposals submitted in response to a request for proposals, such Board of Education or Trus- tee shall evaluate each proposal from a responding contractor according to criteria established by the Commissioner." As determined by the Appellate Division (Ac- me Bus Corp. v. Orange County. et ai., 126 A.D.3d 68), the RFP was issued by Orange County and not by any school district, the provisions of Education Law Section 305(14) do not apply. Similarly, Family Court Act Section 236 does not apply as it permits the Family Court to make an order directing a county to provide for the transportation needs of a special education student. Here, because there was no order made by the Family Court concerning special education services or expenses for any partic- ular child the Family Court Act does not apply. -19- CONCLUSION For the foregoing reasons, and for the reasons relied upon by the court below, the decision of the lower Court should be upheld. Dated: January 5,2016 David A. Donovan Of Counsel Respectfully submitted, David A. Donovan DICKOVER, DONNELLY, DONOVAN & BIAGI, LLP Attorneys for Quality Bus Service, LLC 28 Bruen Place P.O. Box 610 Goshen, New York 10924 (845) 294-9447 -20- CERTIFICATE OF COMPLIANCE 1. This brief was generated on a computer. 2. The margins are one (1) inch on all sides. 3. The typeface is Times New Roman 14 point. 4. The line spacing is double space. 5. The word count is 3163 words. -21-