Bid protests in New York
Bradley attorneys Aron Beezley and Nathaniel Greeson highlight the administrative bid protest landscape in New York given the state's abundant acquisition economy.
New York state's budget is the second largest in the country, and with it, New York has some of the most developed state acquisition laws and procedures in the country. Accordingly, New York provides comparatively robust bid protest rights when it comes to state-level bid protests.
New York's bid protest process is similar to federal bid protest processes and relies on many of the same definitions and principles. New York also provides a searchable database of published bid protest decisions, so contractors and practitioners can review and rely on a body of quasi-precedential decisions. Below is an overview of New York's administrative bid protest procedure.
Multiple Administrative Bid Protest Forums
When deciding whether or not to protest, determining the correct forum to protest is an important first step that can have an impact on the timeliness of one's protest.
New York provides for multiple administrative protest forums. Each procuring entity (e.g., agency, department, board, officer, commission, or institution) is encouraged to establish their own protest procedures and provide notice of the same in the subject solicitation documents. These "agency-level" bid protest procedures differ from public contracting entity to entity and can even change from solicitation to solicitation.
However, any contract over $50,000 must be reviewed and approved by the state comptroller, which provides its own direct protest procedures, as well as procedures to appeal any "agency-level" bid protest decisions. The regulatory protest procedures discussed below refer to the state comptroller's bid protest function, as implemented through the comptroller's Bureau of Contracts (BOC).
In addition to the administrative bid protest procedures discussed in this article, an interested party also has standing to appeal a bid protest action in court, but only after it has exhausted its administrative remedies.
Who May Protest and When?
Only an "interested party" has standing to bring protest, which is defined as:
a participant in the procurement process, and those who can establish that their participation in the procurement process was foreclosed by the actions of the public contracting entity and have suffered harm as a result of the manner in which the procurement was conducted. (2 CRR-NY 24.2(e))
The regulation further provides that, when a public contracting entity has its own written protest procedures and has provided proper notice of those procedures, a protest "shall" be filed initially with the public contracting entity (2 CRR-NY 24.3(a)).
However, a party may file directly with the BOC if (1) the public contracting entity has not provided sufficient notice of its protest procedures, or (2) "the facts that would give rise to a protest are not known to, and could not reasonably have been known to, an interested party prior to the date by which a protest was required to be filed with the public contracting entity."
A direct protest to the BOC "must be in writing and must contain specifically enumerated factual and/or legal allegations, setting for the basis" of the protest challenge (2 CRR-NY 24.4(a)).
An initial protest to the BOC must be filed within 10 business days of receiving notice of the contract award or, if a debriefing has been requested by the interested party, within five business days of the debriefing, whichever is later (2 CRR-NY 24.4(b)(1)). The timeliness for agency-level protests varies and depends on the public contracting entity's published process.
If the interested party is not provided notice of the award, it may file a protest directly to the BOC "at any time after the contract award and prior to the Comptroller's final action on the contract" (2 CRR-NY 24.4(b)(2)).
If the procurement resulted in multiple contract awards, the interested party must file a BOC protest "prior to the Comptroller's final action on any contract award related to that procurement" (2 CRR-NY 24.4(b)(3)).
Stay of Procurement
Unlike federal protest procedures — as well as several state procedures — New York does not provide for a formal stay of contract award or performance pending the resolution of the protest action. Although there is no formal stay, the state comptroller's bid protest procedure acts as an effective stay of award, because the BOC is required to "issue a written determination, contemporaneously with its final action on the contract, addressing the issues raised by the protest."
Because a contract award is not official until the comptroller approves the action and because the BOC's written protest decision must be issued contemporaneously with the comptroller's final action on the contract, this functions as an effective procedural stay.
Right to Intervene
The BOC's bid protest procedures require that the successful bidder be served a copy of the protest alongside the public contracting entity whose decision is being protested (2 CRR-NY 24.4(c)). In addition to this required notification, the successful bidder is permitted to file a brief in answer to the protest (2 CRR-NY 24.4(d)).
The BOC may require the successful bidder to submit further information or address further issues identified by the BOC (2 CRR-NY 24.4(j)).
Decision on the Protest
As alluded to above, in the context of the effective stay, the BOC "shall issue a written determination, contemporaneously with its final action on the contract, addressing the issues raised by the protest" (2 CRR-NY 24.4(l)).
The BOC decision is required to make findings of fact and conclusions of law. Each of the participants in the protest receive a copy of the decision, which also becomes part of the procurement record.
The state comptroller's website provides a searchable database of bid protest decisions1 dating back to January 1995.
As discussed above, the BOC bid protest procedures also serve as an appellate review of public contracting entities' "agency-level" protest decisions (2 CRR-NY 24.5). In order to timely appeal an agency-level protest decision, the appeal must be filed within 10 business days of receiving the public contracting entity's protest determination. The right to intervention, briefing schedule, and written decision requirements are identical to the direct protest procedures addressed above.
Once the BOC issues its written determination — either under the direct protest procedures of 2 CRR-NY 24.4 or under the appellate protest procedures of 2 CRR-NY 24.5 — this is considered the comptroller's final determination and decision, for which there is no further administrative review available to a still-aggrieved party. At this juncture, a disappointed bidder may seek judicial review of the comptroller's decision in court, utilizing Civil Practice Law & Rules (CPLR) Article 78.
New York's administrative bid protest procedures provide for very limited remedies for aggrieved protesting parties. Namely, a successful protest may simply result in the comptroller rejecting the award decision by the public contracting entity in accordance with NY-SFL §§ 163 or 112. The result of this award rejection could take on any number of outcomes, ranging from an award to the bidder "next-in-line" or a complete re-solicitation of the agency's requirement.
If your company performs — or is thinking about bidding or proposing on — New York-funded contracts, you need to know how to protect your company from an unreasonable evaluation and award.
Republished with permission. This article, "Bid protests in New York," was published by Westlaw Today on February 23, 2021.