New York’s MTA Sued Over “Unconstitutional” Debarment Regulations

December 10, 2019

On November 25, 2019, a lawsuit was filed against the New York Metropolitan Transportation Authority claiming a new law that would punish contractors for failure to finish projects on time is unconstitutional. The organization representing thousands of contractors, Alliance for Fair and Equitable Contracting Today, Inc., filed suit in both state and federal courts in Manhattan, targeting a debarment statute that was allegedly hidden in a state budget bill in April of this year, and passed without notice or public comment.


Debarment means that contractors can be suspended or excluded from participating in government contracts for a fixed period of time. Under the new law complained of in the suit, if the MTA determines a firm has failed to complete a project or if costs on a project go over budget by 10%, the MTA is obligated to bar a contractor from bidding on future contracts for a period of five years. According to the lawsuits, the law could affect contractors’ ability to get other jobs and does not account for circumstances out of the contractor’s control that may contribute to delays or increases in cost.


Each one of the lawsuits attacks the validity of the regulations that took effect in early 2019 on different grounds. The state filing focuses on the validity of the law itself, arguing the MTA exceeded its authority in allowing the rules to come into effect, and that it usurped authority granted to the state legislature in effecting those changes. Meanwhile, the federal suit alleges several constitutional violations including breaches of the supremacy and commerce clauses, violations of due process, and interference with contractual rights and obligations.


MTA Sued Over Contractor Regulations


NY MTA's New 'Debarment' Regs Unconstitutional, Suit Says

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