I. Competitive Bidding – The Basics
The purpose of competitive bidding is to create an open and fair environment that encourages transparency and accountability, as well as competition. Local Government Management Guide Seeking Competition in Procurement, NYS Office of the Comptroller, Division of Local Government and School Accountability (July 2014) at: Seeking Competition. Under General Municipal Law § 103, when a procurement meets certain monetary thresholds, local municipalities and school districts (collectively, hereinafter “municipalities”) are required to advertise for competitive bids. For example, purchase contracts involving expenditures in excess of $20,000 and contracts for public work involving expenditures of $35,000 or higher are subject to public bidding under General Municipal Law § 103. An exception to this rule are emergency procurements under General Municipal Law § 103(4) (discussed supra).
General Municipal Law § 103(2) further requires that “[A]ll bids received shall be publicly opened and read at the time and place so specified and the identity of all offerers shall be publicly disclosed at the time and place so specified.” However, the COVID-19 pandemic has forced municipalities to consider whether it is smart, safe and/or permissible to hold in-person public bid openings. Particularly since Executive Order (“EO”) 202.10, as extended and amended by EOs 202.38, 202.42, 202.45, and 202.89 (“EO 202.10”) limits and/or prohibits certain non-essential gatherings. Therefore, municipalities are effectually prohibited from holding non-essential in-person bid openings where the number of persons in attendance (inclusive of on-site staff) exceeds the number permitted by EO 202.10.
II. Suspension of the Requirement to hold In-Person Bid Openings
In light of the foregoing concerns, on March 27, 2020 Governor Cuomo issued EO 202.11, which suspends the requirement that municipalities hold public (in-person) bid openings. Instead, EO 202.11 permits municipalities, where practical, to hold non-public bid openings so long as the municipalities provide the public with a meaningful opportunity to view such bid openings by recording or live streaming them. On December 30, 2020, Governor Cuomo extended EO 202.11 until January 29, 2021 under EO 202.87.
Additionally, in order to ensure that the bidding process is fair and transparent, municipalities are encouraged to create a record of the bid opening, document each action taken during the process, and have one municipal official or employee present to witness the bid opening. See, New York State Conference of Mayors’ Coronavirus COVID-19: Resources For Local Government Officials – Public Bidding Openings at: Resources for Local Government Officials.
III. Remember to Follow All the Other Rules!
All other requirements of General Municipal Law § 103 remain unchanged. Therefore, municipalities must continue to “… publish an advertisement for bids and offers in an official newspaper, if any, or otherwise, in a newspaper designated for such purpose.” General Municipal Law 103(2). Pursuant to General Municipal Law § 103(2), the advertisement must provide (i) the time and place where the bids received will be “publically” opened and read, and (ii) identify where all bidders/offerors will be publically identified and disclosed. In addition, where the municipality has authorized the receipt of bids and offers in an electronic format, the designation of the receiving device must be provided. Id.
In the event that municipalities elect to hold a non-public bid opening pursuant to EO 202.11, it is important that the notice of advertisement include: (i) the date and time when all bids must be received, opened and read; (ii) that the bid opening will be held in accordance with EO 202.11; (iii) that in-person attendance will not be permitted; and (iv) the website address, public television broadcast channel, videoconference link or similar system, where the public may view or participate in a recording or live stream of the bid opening.
Municipalities should also post these notices on their websites.
IV. COVID-19 – It’s an Emergency, Right?
COVID-19 may be a declared state of emergency, but that does not mean that COVID-19 (in and of itself) automatically qualifies as an “emergency” for emergency procurement purposes under General Municipal Law § 103(4). Under General Municipal Law § 103(4), contracts for public work or the purchase of supplies, material or equipment may be let by the appropriate officer, board or agency of the political subdivision or district without the issuance of an advertisement for sealed bids where: (i) there is an accident, unforeseen occurrence or condition; (ii) that affects public buildings/property or the life, health, safety or property of residents; and (iii) the resulting situation requires immediate action which cannot wait for competitive bidding/offering. As such, General Municipal Law § 103(4)’s application is strictly limited to procurements necessitated by an emergency that is designated by current and immediate circumstances.
Notwithstanding the forgoing, EO 202 permits school districts, to the extent necessary, to procure and use cleaning maintenance products without first advertising for bids and offers or complying with existing procurement policies and procedures as required under General Municipal Law §§ 103 and 104-b. Beware, however, that EO 202 is limited to procurements necessitated by the declared emergency (i.e. COVID-19). Therefore, a school district could not, for example, purchase a snow plow because of COVID-19. Further, it must be noted that EO 202 does not apply to local governments (i.e. cities, villages, Towns, Counties or other political subdivisions). Therefore, local governments should continue to evaluate all emergency contracts under the criteria set forth in General Municipal Law § 103(4).
V. Procurement Policy Updates
In light of the COVID-19 pandemic, and the transition to virtual government platforms, municipalities should review their procurement policies and consider changes that accommodate electronic and virtual competitive bidding platforms in accordance with EO 202.11 and General Municipal Law § 103(1).
Should you have questions or inquiries regarding General Municipal Law § 103 or procurement, please contact Simone M. Freeman in our Municipal Law Group at 516-746-8000 or email@example.com.