DEP’s default of contractor upheld

The Bowery Bay Wastewater Treatment Plant. Image Credit: Google Maps.

DEP defaulted the contractor upgrading the Bowery Bay Wastewater Treatment Plant following long delay and performance failures. On March 4, 2013, the New York City Department of Environmental Protection awarded Framan Mechanical, Inc. a $6,555,000 contract to upgrade of the Bowery Bay Wastewater Treatment Plant. The contract involved the replacement of all eight main sewage pumps, including suction piping, seven suction valves, high and low-level seal water skids, and ancillary seal water equipment.

The project was almost immediately behind schedule and had other difficulties. DEP sent Framan a Notice of Deficient Performance. The allegations included (a) emergency flooding on September 23, 2016 and May 26, 2017 at Bowery Bay stemming from Framan’s inability to seal low level main sewage pump #3; (b) Framan’s failure to perform work under change order 17 and change order 17R; (c) Framan’s unsatisfactory environmental health and safety compliance record; and (d) Framan’s delay and failure to comply with contractual provisions regarding scheduling.

Framan contested the Notice and was given a hearing before Agency Chief Contracting Officer Elisa Velazquez. Following the hearing DEP declared Framan in default.

Framan filed an article 78 petition challenging the default. Feaman claimed that DEP had acted arbitrarily and that the hearing officer Valazquez was biased and had her mind made up.

Supreme Justice Melissa A. Crane rejected Framan’s petition and upheld the default. Judge Crane ruled that Framan had received adequate notice, was given a fair hearing, and that the decision to default Framan was rational and not arbitrary. Framan appealed.

The Appellate Division, First Department, affirmed and upheld the default. The court ruled that the hearing had been fair, that Framan had an adequate opportunity to meet the charges, and that the decision was not arbitrary or capricious.

Framan Mechanical, Inc. v. City of New York, 188 A.D.3d 455 (1st Dep’t 2020).

By: Aaron Tabak (Aaron is a New York Law School student, Class of 2022.)


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