by Rachel Klein*

The Good Food NY Bill (S.6955/A.7264) (“GFNY”) attempted to amend New York State’s General Municipal Law § 103(1) to allow municipalities and other political subdivisions to award food purchases to qualified purchasers where the price offered is up to 10% higher than the lowest bid and the proposed contract also meets at least one of six “best value” standards. GFNY passed the state legislature last legislative session and was rejected by Governor Kathy Hochul. Despite New York’s historical use of the lowest bidder procurement procedure, through which best value standards cannot be implemented as only price can be considered, this Contribution argues that GFNY’s use of best value is permissible through the formal request for proposals procurement method. GFNY is consistent with recent amendments to New York State law and guidance from the state government permitting the use of request for proposals procurement, which in turn permits use of best value standards. Existing case law and regulatory policy further supports the legality of the best value standards implemented by GFNY.

Conflicting standards between federal law and New York State law have made food procurement criteria convoluted. Food procurement is the general process under which state and local governments contract with food suppliers for their product. Under federal law, the use of federal monies for procurement requires that the Request for Proposal (“RFP”) method is utilized to apply best value standards. New York State Finance Law § 163(1)(j) defines best value, in part, as “the basis for awarding contracts for services to the offeror which optimizes quality, cost and efficiency, among responsive and responsible offer[o]rs.”1 In other words, best value assessments allow weighing considerations other than price when evaluating a procurement contract, though price may, and often must, remain a significant factor. The Good Food NY Bill  (“GFNY”) seeks to use best value to incentivize food contractors, including farmers and other food producers, to use sustainable practices and gives an advantage to  contractors who promote (1) local economies, (2) nutrition, (3) animal welfare, (4) valued workforces, (5) environmental sustainability, and (6) racial equity.

GFNY would amend current law so that food providers can receive a 10% price preference over other bidders or offerors if they meet at least one of the six values described above.2 According to the United States Department of Agriculture’s (“USDA”) guidance, this price preference is used as an example of best value, rather than lowest bidder, procurement.3 Lowest bidder procurement requires that bids are solely evaluated based on price once a bidder meets the requirements for bidding.4 RFP procurement, on the other hand, allows for additional criteria, such as whether a vendor uses sustainable practices, is situated locally, or treats their animals humanely, to be considered, without making such criteria required for an offer to be considered.5 This  makes the RFP method consistent with the use of best value standards. Under GFNY’s proposed procurement scheme, while a sustainability-focused supplier may have a 10% price preference advantage, if another supplier is offering a price more than 10% below what the sustainability-focused supplier is offering, the lower bidder will still receive the contract.6

There remains some uncertainty over whether New York State General Municipal Law allows the use of RFPs through the best value procurement process. This Contribution argues the use of RFPs is permitted and the implementation of best value purchasing is possible when a local entity uses the RFP procurement method. Best value principles, such as the use of sustainable methods, may also be considered in certain micro-purchasing methods, because micro-purchasing allows institutions to pick a vendor based on whichever values they deem important.

Under federal regulation, 2 C.F.R. § 200.320, there are four types of procurement methods that non-federal entities receiving federal monies (here, food providers) can utilize: two are “informal” and two are “formal.”7 As their names suggest, the informal methods are less stringent than the formal ones. Informal methods include micro-purchasing and small purchasing, while formal methods are RFPs and invitations for bids. Which method can be used depends on whether the value of the procurement exceeds the federal simplified acquisition threshold (“SAT”)8 of $250,000.9 If the value of the award exceeds the SAT, the entity is required to select one of the two formal procurement methods: the invitation for bids or RFPs.10

An invitation for bids, also known as a sealed bids process, is the first of the formal procurement methods. In this method, procurers publicly solicit bids and award a fixed-price contract to the lowest responsible bidder whose bid conforms with all material terms and conditions of the bid invitation.11 The procurer can include baseline requirements for variety, size, quantity, and delivery of food in their bid invitation’s terms and conditions.12 Those terms and conditions can only outline minimum essential characteristics and standards.13 If the procurer includes a term or condition that unreasonably limits competition, the bid is considered improper.14 Therefore, for best value criteria to be included in a sealed bid’s terms and conditions, they must be required rather than weighed as positive qualities.15 Additionally, a procurer could improperly discourage competition by having too many of these requirements. As sealed bids are only feasible where the selection of the successful bidder can be made solely on the basis of price, this process is not ideal for implementing best value factors.16

However, the USDA’s guidance states that RFPs, the second formal method for procurement, allows for consideration of factors other than price.17 In this method, proposals must establish all evaluation factors being considered and the relative importance of those factors.18 The award is given to the vendor who is able to provide the “best overall value,” considering price and the evaluation criteria outlined in the request.19 However, price must remain the primary consideration and carry the most weight in an evaluation.20 Thus, a non-federal entity which is hoping to use best value evaluation methods in selecting bids can do so under the RFP procurement method, so long as price is the most heavily weighed factor. The explicit use of evaluation criteria is prohibited under all procurement methods other than RFPs, and that use of evaluation criteria is necessary for implementing best value.21 Therefore, the RFP method is the only procurement method available where best value can be employed entirely under federal standards.

Prior to 2012, New York’s General Municipal Law (“GML”) § 103(1) required that, unless otherwise provided by a legislative act or local law, all purchasing contracts of more than $20,000 had to be awarded to the lowest responsible bidder.22 Thus, the use of the RFP procurement method was generally not permitted, because it allows an entity to weigh factors other than price, even as price remained the principal consideration.23 There were limited exceptions to this rule, such as when a contract required the exercise of specialized or technical skills.24

There is a supposed debate over whether New York law today allows RFP method under best value standards. But, a January 2012 amendment to GML § 103 provides that purchasing contracts for anything other than public works are required to be procured on the basis of best value, while lowest bidder is only permitted for public works contracts.25 This amendment quite explicitly introduced the RFP process into New York law. In addition, the amendment changed any reference in the statute of “bids” to “bids or offers,” and any reference of “bidder” to “bidder or offer[o]r.”26 But most significantly, GML § 103 was further amended in the same month so that purchase contracts can be awarded either on the basis of best value or lowest bidder: “[P]urchase contracts . . . may be awarded on the basis of best value . . . to a responsive and responsible bidder or offer[o]r.”27

New York State Procurement Guidelines, which apply to state agencies and are published by the state’s Office of General Services, currently conflate the terms “offeror” and “bidder.”28 However, New York State Finance Law § 163(1)(j) explicitly connects the term “offeror” with “best value,” suggesting a different procurement process than that for lowest bidder.29 The term “offeror” was explicitly added to New York’s general municipal law as part of the 2012 GML amendments along with “best value.” The surplusage canon of interpretation supports reading a statute so that its words are not made redundant. Thus, the addition of “offeror” to GML § 103 is clearly meant to indicate a separate meaning from the term “bidder.”

The usages of “bidder” and “offeror” in 2 C.F.R. § 200.320(b) also indicate that these two terms have separate meanings.30 “Bidder” is only used in reference to a potential contractor in a sealed bids process, while “offeror” is only used in reference to a potential contractor in an RFP process.31 Furthermore, considering the secretive nature of sealed bids and the resulting inability to evaluate criteria, federal guidance indicates that the exercise of best value is not possible in a sealed bids process.32 Therefore, the 2012 amendment to GML § 103 allowing best value considerations and including “offeror” along with “bidder” as a vendor classification strongly suggest that RFPs are now permitted when the best value process is utilized.

New York guidance documents also support this interpretation of GML § 103. The New York State Procurement Guidelines, noted above, indicate that the RFP process is appropriate for state agencies applying best value for contracts for services under § 163(4)(d).33 Additionally, materials prepared by lawyers for the City of New York, as part of a Continuing Legal Education program for procurement law, affirmed the connection between RFPs and best value. These lawyers wrote in 2013 that one consequence of the best value amendment to GML § 103 is that goods and standard services may now be procured by proposals—either through an RFP or a negotiated acquisition—rather than lowest sealed bids, provided that the requirements of GML § 103 are met.34

The City of New York has also adopted the interpretation that RFPs are permitted under GML § 103. Following the 2012 amendment to the section, the State Comptroller promulgated new procurement regulations to explicitly allow the use of RFPs when using the best value process. In its “Statement of Basis and Purposes of Proposed Rule,” the Comptroller noted that: “On April 8, 2013, the Procurement Policy Board (PPB) adopted amendments to Chapter 3 of Title 9 of the Rules of the City of New York to authorize the use of best value awards based on competitive sealed proposals.”35

At the same time, guidance issued by the New York State Comptroller, noted above and last updated in 2020, stated: “Use of an RFP process does not constitute compliance with General Municipal Law § 103, which requires a sealed competitive bidding process.”36 For support, the guidance cites to the 1994 Second Department case, B.T. Skating Corp. v. County of Nassau.37 This case, however, does not support this proposition. It merely discusses the importance of compliance with the competitive bidding procedures mandated under § 103, rather than whether the RFP process is permitted under a best value procurement process.38 In fact, the best value procurement language discussed above was not added to § 103 until 2012, making this case from 1994 entirely irrelevant. There are not currently any cases directly addressing the question of whether RFPs are allowed under § 103, in part because there have only been a handful of cases discussing this provision since it was amended.39

In the 2021 case Auctions International v. County of Orange, the Second Department determined that the County of Orange’s RFPs, which provided that the contract would be granted to “the responsible offeror whose proposal is determined to be in the best interest of the County,” were properly carried out.40 The court cited to GML § 104-b, the public works contracts exception to the old sealed bids requirement in GML § 103, in justifying the use of an RFP.41 However, it did not explicitly address whether the amendment to GML § 103 allows generally for the use of RFPs.42 Similarly, in City of Kingston v. Aslan Environmental Services, LLC, the Third Department cited to GML § 120-w rather than to GML § 103 when discussing the RFP procurement option, and ultimately determined that the contract created as a result of the RFP process under § 120-w was proper.43 But, again, the court did not explicitly address the GML § 103 amendment’s impact on the general use of RFPs.44 Therefore, the lack of acknowledgement of the amendment by the caselaw, in tandem with the New York State Comptroller’s guidance that GML § 103 does allow the use of RFPs, indicates that both the RFP method and best value criteria are permitted under GML § 103.

Ultimately, modern day procurement law in New York State allows for the use of best value standards in the RFP method of procurement. New York courts have yet to comment on the issue, but amendments to New York State statutes, guidance from state government, and the standards set by the federal government indicate that if the courts were to weigh in, they should find that best value standards are permitted. Thus, courts should have no trouble validating GFNY’s policy of allowing best value considerations to be used in the contract bidding process for food procurement.

* Rachel Klein is a J.D. Candidate (2025) at New York University School of Law. This Contribution was adapted from her advocacy work to get the New York Good Food bill passed in the New York State legislature. This Contribution lays out the legal issues that the coalition advocating for this bill struggled with and the arguments that were integral in convincing legislators and government officials that this bill was consistent with current New York State law.

1. N.Y. Fin. Serv. Law § 163(1)(j).

2. S.6955, 2023 B., Reg. Sess. (N.Y. 2023).

3. U.S. Dep’t of Agric., FNS-465, Procuring Local Foods for Child Nutrition Programs (Aug. 2015, revised June 2022) at 58–60.

4. 2 C.F.R. § 200.320(b)(1)(i)(C).

5. U.S. Dep’t of Agric., supra note 4, at 47.

6. Id. at 58–60.

7. Id. at 39.

8. SAT refers to the dollar amount below which a non-federal entity may purchase property or services using small purchase methods. 2 C.F.R. § 200.1.

9. U.S. Dep’t of Agric., supra note 4 at 39.

10. 2 C.F.R. § 200.320(b).

11. 2 C.F.R. § 200.320(b)(1).

12. U.S. Dep’t of Agric., supra note 4, at 46.

13. 2 C.F.R. § 200.319(d)(2).

14. 2 C.F.R. § 200.319(a).

15. U.S. Dep’t of Agric., supra note 4, at 46.

16. 2 C.F.R. § 200.320(b)(1)(i)(C).

17. U.S. Dep’t of Agric., supra note 4, at 47.

18. Id.

19. Id.

20. Id.

21. Id. at 50.

22. See Conduit & Found. Corp. v. Metro. Transp. Auth., 485 N.E.2d 1005, 1008 (N.Y. Ct. App. 1985) (holding that best value is not a permitted procurement method).

23. Matter of Omni Recycling of Westbury, Inc. v. Town of Oyster Bay, 901 N.E.2d 741, 742 (N.Y. Ct. App. 2008).

24. N.Y. Gen. Mun. Law § 104-b (2022).

25. S.7357A, 2011 B., Reg. Sess. (N.Y. 2011) (enacted).

26. Notably, the second amendment to GML § 103 enacted in January 2012 added an additional requirement for the use of best value—namely that in political subdivisions other than New York City, the use of best value must first be authorized by local law in a political subdivision, or, in the case of a school district or “board of cooperative educational services, by rule, regulation, or resolution adopted at a public meeting.” N.Y. Gen. Mun. Law § 103(16) (2023).

27. S.6117, 2012 B., Reg. Sess. (N.Y. 2012) (enacted) (emphasis added).

28. Off. of Gen. Servs., New York State Procurement Guidelines September 2023 4 (2023).

29. N.Y. Fin. Serv. Law § 163(1)(j).

30. 2 C.F.R § 200.320(b)(1)-(2).

31. Id.

32. See U.S. Dep’t of Agric., supra note 4, at 50 (stating that evaluation criteria will only appear in an RFP).

33. Off. of Gen. Servs., supra note 31, at 22, 45.

34. Steven Stein & Howard Friedman, Presentation at New York Law School: N.Y.C. Procurement Law: Doing Business with N.Y.C. (Nov. 16, 2013) at 20.

35. Off. of the State Comptroller, Competitive Bidding Under General Municipal Law § 103 29 (2020).

36. Id. at 29. The Comptroller’s guidance also discusses other sections of New York State procurement law that “expressly authorize the use of an RFP as an alternative to competitive bidding.”

37. 204 A.D.2d 586 (2d Dept. 1994).

38. Id.

39. See Auctions Int’l v. Cnty. of Orange, 148 N.Y.S.3d 693, 694 (App. Div. 2020); see also City of Kingston v. Aslan Envtl. Servs., LLC, 117 N.Y.S.3d 711, 713 (App. Div. 2020).

40. 148 N.Y.S.3d at 694.

41. Id.

42. Id.

43. 117 N.Y.S.3d at 713.

44. Id.