Although entering the public bidding arena presents contractors with a plethora of opportunities, these opportunities do not come without risk. As many contractors can attest, oftentimes public bidding can seem more like gambling than bidding. This holds true not only when a contractor steps into the public bidding area for the first time, but also when experienced public bidders decide to cross state lines to pursue new opportunities.
Public Bidding in New York
Unlike the public bidding laws in New Jersey and Pennsylvania, the New York public bidding laws give contractors the option of withdrawing their bids after the expiration of a firm offer period. Under Section 105 of New York’s General Municipal Law, New York’s public bidding statute, a public agency must award a contract within 45 days of bid opening. During this period, which cannot be expanded by contract or local laws, a contractor’s bid is irrevocable. Once the 45 day firm offer period expires, however, a contractor may withdraw its bid if the public agency has not yet awarded and entered into the contract. Providing notice of the award is not sufficient. As such, contractors can withdraw their bids when the public agency has indicated its intent to award a contract, but has not yet bound itself to the contract within the 45 day firm offer period.
Guy Pratt, Inc. v. The Town of North Hempstead
The case, Guy Pratt, Inc. v. The Town of North Hempstead, is a long-standing example of a New York contractor’s ability to withdraw its bid when a public agency does not unequivocally enter into the contract. In Guy Pratt, the Appellate Division of the Supreme Court of New York held that contractor Guy Pratt, Inc.’s withdrawal of its bid after the expiration of the 45 day period was valid and effective. The Court upheld the withdrawal even though counsel for the Town of North Hempstead (Town) notified the contractor by letter within 45 days of bid opening that the Town had awarded it the contract, and even though Guy Pratt, Inc. had already executed and returned the proposed contract to the Town prior to withdrawal of its bid.
In issuing its ruling, the Court relied upon language in the subject contract that stated that a contractor was proceeding at is own risk unless and until:
an Award of the Contract to him is consummated by the delivery of an executed duplicate of the Agreement which has been approved by and filed in the Office of the Town Clerk.
The Court found that this language made it clear that the Town was not bound by the contract until it had delivered an executed copy of the contract to Guy Pratt, Inc. Since it was undisputed that an executed contract had not been delivered to the contractor within the 45 day period, and since the contractor’s notice of withdrawal of its bid came before the delivery of the contract, the withdrawal was valid and effective.
In this case, the Court held that an award must be unequivocal in order to bind a contractor within the 45 day period and to prevent a contractor from executing its right to withdraw its bid. The fact that this case is still good law demonstrates just how serious New York courts take the contractor’s ability to withdraw its bid after the 45 day period.