Goetz Fitzpatrick attorneys Donald J. Carbone and Scott D. Simon recently obtained a landmark ruling that New York City’s imposition of “JB 4.0” – a joint bidding scheme that gave private utility companies a windfall at the expense of the City and its taxpayers – violates the law.
Like all municipalities, the City is required by statute to procure contracts for a publicly funded project by soliciting bids and awarding the work to the lowest responsible bidder. Another law compels private utilities like Con Edison to protect its wires and pipes at the utilities’ own cost when the City is repairing its streets and sidewalks. Historically, contractors submitted two bids on such projects – one to perform the City’s public work, and a second for the related work to protect the private utilities’ property.
However, under JB 4.0, the City directed contractors to submit a joint bid for the projects that mandated a fixed price for the private utility work. The contractors, all City taxpayers, contended that the City-mandated price for the portion of the bid covering the private utility work was priced massively below what the work cost to perform. Goetz Fitzpatrick successfully argued on behalf of its clients – JLJ IV Enterprises, Inc.; ADC Construction, LLC; DiFazio Industries LLC; Perfetto Contracting Co., Inc.; and J. Pizzirusso Landscaping Corp. – that by requiring contractors to bid a massively undervalued price to perform the private utility work, the contractors had no choice but to bid a higher price to perform the City’s public work than they would if JB 4.0 were not in place. This is because the portion of the bid relating to the City’s public work was the only portion of the project for which the bidders had any discretion as to their submitted price.
Goetz Fitzpatrick LLP argued that a resulting higher price for the City’s public work meant that the City was not obtaining the lowest responsible bid on these projects and was subsidizing the private utilities at the expense of New York City taxpayers. The firm’s efforts resulted in a determination that JB 4.0 does not protect the public fisc or safeguard the public interest, in violation of longstanding law. Accordingly, the Court struck down the City’s JB 4.0 bidding scheme.
Goetz Fitzpatrick LLP has been offering clients insightful solutions throughout the New York Metropolitan area since 1967. The firm provides its clients with expertise in the areas of Construction and Real Estate, Trusts & Estates Administration & Litigation, Commercial Litigation, Corporate, Bankruptcy, and Labor & Employment. The firm’s office is located at One Penn Plaza, Suite 3100, New York, NY 10119, Telephone 212 695 8100, [email protected], www.goetzfitz.com. You can learn more about Goetz Fitzpatrick on: LinkedIn | X (Twitter) | Soundcloud | YouTube | Facebook | Instagram
