SUPREME COURT OF THE STATE OF NEW YORK

NEW YORK COUNTY

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-
LITTLE FLOWER CHILDREN AND
FAMILY SERVICES OF NEW YORK, :

Plaintiff, : Index No.

- against - : COMPLAINT

CITY OF NEW YORK, NEW YORK CITY :

ADMINISTRATION FOR CHILDREN'S
SERVICES, :

Defendants. :

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- Plaintiff, Little Flower Children and Family Services of New York ("Little

Flower"), by its undersigned counsel, Skadden, Arps, Slate, Meagher & Flom LLP,

alleges on personal knowledge as to itself and its own acts, and on information and

belief as to all other matters, as follows:

NATURE OF THE ACTION

1. Plaintiff, Little Flower, has provided foster care services to

African-American and other children from New York City (the "City") since its

founding, by Father Bernard J. Quinn, Pastor of St. Peter Claver Roman Catholic

Church in Brooklyn, over 80 years ago. For much of that time, Little Flower has

been providing these services under contracts with the City or its agencies. On April

19, 2010, the New York City Administration for Children's Services ("ACS") notified

Little Flower that its contracts would not be renewed, not because of Little Flower's

performance, but as a result of a deeply flawed procurement process that ACS

initiated a year and a half ago. As a consequence, Little Flower is being denied a fair
 opportunity to be awarded contracts, valued at approximately $200 million over the

next ten years, and will not be allowed to continue its long history of service to the

City's foster children. In addition, ACS has stopped referring new children to Little

Flower, causing Little Flower's foster care operation to decline at a rate of about 6%

per month, and ACS has notified Little Flower that its remaining 1,400 foster

children will be transferred out of Little Flower's care beginning on August 2, 2010.

2. To forestall such action, which will cause Little Flower

irreparable harm, as well as grievous harm to the children, Little Flower seeks

declaratory and injunctive relief to prevent defendants, the City and ACS, from

utilizing an unlawful request for proposals and procedure to procure foster care and

other services for New York City's children and to prevent defendants from abusing

their discretion and acting in an arbitrary and capricious manner in procuring such

services.

3. Specifically, this action seeks a declaration: (i) that the request

for proposals issued by ACS on May 20, 2009, as amended, seeking qualified

vendors to provide programs in the areas of preventative services, family foster care

and residential care, and for community partnership contractors entitled: The City of

New York Administration for Children's Services Child Welfare Services Including

Community Partnerships Request for Proposals (PIN 0682009CWSCP) (the "RFP")1

is unlawful and that it be vacated in its entirety; (ii) that ACS and the City be

enjoined from taking any action in furtherance of awarding any contracts based on

proposals submitted in response to the RFP, including conducting any public

1
A copy of the RFP, with Attachments A1-I, Appendices A-I and Addenda 1-7, is provided as
Exhibit A.

2
hearings, and that the Recommendations for Awards of Contracts issued by ACS in

April 2010 ("Recommendations for Contracts") and all other proposed contract

awards made pursuant to the RFP (collectively, the "proposed new contract awards")

be vacated in their entirety; and (iii) that ACS and the City be enjoined from

transferring any foster children from Little Flower's care to the care of other agencies

in anticipation of the proposed new contract awards.

4. The RFP and the manner in which ACS and the City have

administered it are in direct contravention of applicable law:

the RFP is vague and ambiguous in significant and material respects:

proposers can only guess at what ACS was seeking in critical areas;

it wholly fails to ask prospective proposers to explain how they will

accommodate children who are transferred to their agencies from other
agencies that did not receive contract awards;

it fails to identify the relative weight of each criterion or category of

criteria used to evaluate responding proposals;

to the extent it is possible to ascertain anything at all about the secretive

scoring process, ACS improperly and arbitrarily emphasized proposal
writing over history, experience and proven performance, and ACS's own
evaluations of agency performance were not adequately considered;

the RFP requested that prospective proposers base their

proposals on a daily reimbursement rate of $34 for each child in foster
care; subsequently, defendants have revealed that, at least for an initial
period, the daily reimbursement rate will be $31.77; proposals, therefore,
were prepared and evaluated based on material misinformation, skewing
the entire process and not allowing a fair evaluation of how agencies will
provide the requested services with almost 10% less funding;

most critically, it grants ACS unlimited discretion, which ACS abused, in

awarding contracts;

it fails to protect against favoritism and encourages ACS to game the

system, by shorting the recommended contract awards for foster care
services by approximately 3,000 children, one-quarter of the number of
children in foster care; as a result, ACS now is free to and must make

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 alternate arrangements, outside the RFP process, for the care of these
children, with any agency it favors; and

Little Flower effectively is being denied its statutory right to protest ACS's
determination because ACS already is taking numerous steps that will
moot any protest -- it has stopped referring new cases to Little Flower,
made arrangements to transfer the children currently in Little Flower's
care, and is scheduling public hearings and registering new contracts with
the agencies identified in the Recommendations for Contracts.

5. Over Little Flower's objections, ACS has informed Little

Flower that it will begin transferring children from Little Flower's care to the care of

other agencies prior to the expiration of Little Flower's current foster care services

contracts with New York City, prior to the time this action can be determined and

prior to the time for Little Flower to protest and appeal from same. Once the children

are moved, the damage will have been done. Transferring the children back to Little

Flower, after Little Flower's legal rights can be fully adjudicated, would not be

practicable, as once the children are transferred, Little Flower will have to dismantle

much of its infrastructure and terminate employees. Moreover, transferring the

children once is horrific; transferring them twice only would cause them further

damage.

6. As a result, unless the RFP is invalidated and the status quo

preserved, pending resolution of this action, Little Flower will lose the hundreds of

foster parents, whom Little Flower recruited, trained and supported over many years

and at great effort, and with whom it has built relationships of trust and respect; will

lose relationships with outside service providers, with whom it has built close

working relationships; will be forced to dismantle nearly all of its operational

capacity; will lose almost half of its budget; will terminate approximately 240

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employees (one-third of its workforce), including key employees from the

communities they serve and whom Little Flower has trained (63% of whom are

professional staff and 75% of whom are members of DC 1707), will be forced to

vacate approximately 31,600 square feet of rental space in Brooklyn, including its

entire main office on Joralemon Street, and 11,500 square feet in Queens, with

resulting monetary penalties; and will suffer irreparable damage to its goodwill and

reputation in the industry. All of this damage will be done to Little Flower, and to the

children, despite Little Flower's proud legacy of serving New York City's children

and families dating back eight decades and despite the fact that Little Flower is not

being denied contracts based on performance issues.

7. In addition, the 1,400 foster children whom Little Flower

currently serves, and who are some of New York City's most emotionally fragile

children, will have to be transferred out of the institutionally predictable, stable and

loving care of Little Flower, almost certainly increasing their time in foster care and

causing further injury to these children, all at ACS's whim and without the benefit of

a lawful process. Ironically, no one disputes that transferring these children is wrong.

In a recent newspaper article, when asked about large-scale case transfers of children

to other agencies, ACS Commissioner John Mattingly stated: "I would rather not

have to do this, but you have to fairly contract out your system. This is something

we are just going to have to do with minimum harm to children and families. . . . .

In cases where the numbers are large, it is going to be very challenging." No

Winners! New ACS Child Welfare Contracts, N.Y. Nonprofit Press, June 2010, at

1,10 (emphasis added).

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 8. The RFP process was so flawed that it led to what is generally

viewed in the industry as chaos and bewilderment. Indeed, Commissioner Mattingly

has publicly acknowledged that the RFP process, which will control the City's foster

care contracts for at least the next decade, made no sense. He recently stated: "The

problem with this system of contracting is that someone like myself cannot sit at the

table and move everything around to make sense." Id. at 9. He further stated that the

goal of the procurement process was to "make the [contracting] process fair," and that

it was a "bureaucratically-driven, step-by-step process that takes out a lot of

flexibility." (emphasis added) Id.

9. Although Commissioner Mattingly's stated aim of a fair

contracting process may be laudable, it overlooks the real goal, which should be, first

and foremost, to achieve a result that is in the best interest of the children. This goal

was notably absent from the Commissioner's statement.

10. Clearly, the RFP should be scrapped in favor of a new request

for proposal, which is in the best interest of the children, not the bureaucrats that

created it, weighs appropriately the performance of foster care agencies, and does not

lead ACS's Commissioner to describe his own agency's contracting process as one he

himself "would rather not have to do." Id. at 10.

THE PARTIES

11. Little Flower is a nonprofit organization serving children,

families and developmentally disabled adults in New York City and on Long Island.

Its core business is providing foster care services to New York City. Little Flower's

proud history of serving the City dates back to 1927, when Father Bernard J. Quinn,

Pastor of St. Peter Claver Roman Catholic Church in Brooklyn, purchased a 122-acre
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farm in Wading River, New York, with the intention of opening an orphanage for

homeless African-American children from New York City. The institution was

named "Little Flower House of Providence for Homeless Colored Children" and was

chartered by the State of New York in June 1929.

12. Little Flower is one of approximately 33 foster care provider

agencies under contract with New York City; yet for many years, Little Flower has

provided over 10% of the foster boarding beds available for New York City's

children. At times of crisis, this percentage has gone even higher. Under contracts

with New York City, Little Flower currently serves approximately 1,400 New York

City foster children and their families; it is one of the largest agencies of its kind in

New York State. Little Flower's current contracts with New York City for foster care

and special medical foster care, which date back to 2000, yield approximately $17

million per year in revenue for Little Flower, which constitutes about 45% of Little

Flower's total annual revenue. From January 2007 until April 30, 2010, ACS placed

almost 2,000 children with Little Flower, and, thus far, Little Flower has been able to

achieve permanence for more than 75% of them.

13. Little Flower's principal place of business is located at 186

Joralemon Street, Brooklyn, New York, 11201. Little Flower also has auxiliary

office space on Court Street in Brooklyn, an office in Queens, at 89-12 162nd Street,

Jamaica, New York, 11432 and facilities in Wading River, New York.

14. Defendant City of New York (the "City") is a municipal

corporation organized and existing under the laws of the State of New York. The

City's principal place of business is City Hall, New York, New York, 10007.

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 15. Defendant ACS is a public agency of defendant City of New

York and the City's child welfare agency. ACS was created in January 1996 to aid

the City in serving children and their families through, among other things, the

provision of foster care. ACS provides such services through contracts with provider

organizations across the City. ACS's principal place of business is located at 150

William Street, New York, New York, 10038.

JURISDICTION AND VENUE

16. Jurisdiction is proper pursuant to CPLR 3001 because

defendants are taking action based on the purported lawfulness of the RFP, including,

among other things, issuing the Recommendations for Contracts, notifying Little

Flower that its proposals to provide foster care and specialized foster care services

submitted in response to the RFP (the "Proposals") will not form the basis for

contract awards, ceasing referrals of new children to Little Flower, and notifying

Little Flower that on August 2, 2010, it will begin to transfer children out of Little

Flower's care and to the care of other agencies. Little Flower is herein challenging

the RFP and defendants' actions as being unlawful, arbitrary and capricious and an

abuse of discretion. A justiciable controversy, therefore, exists between the parties.

17. A declaratory judgment with respect to the questions of law

raised herein will resolve directly, expeditiously and finally the controversy between

the parties.

18. Venue is proper pursuant to CPLR 504.

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 LITTLE FLOWER HAS A LONG HISTORY OF
PROVIDING FOSTER CARE SERVICES TO NEW YORK CITY

19. Little Flower's growth as a service provider parallels the

development of the child welfare system in New York City. During the 1930s and

1940s, Little Flower developed a residential center for orphaned and neglected

children, the basis of the present day residential treatment center. In the 1950s and

1960s, Little Flower developed a strong network of devoted foster families to provide

children with in-home care. In the following decades, Little Flower became one of

the largest children's services agencies in New York State, constantly meeting the

challenges facing New York City's most vulnerable children.

20. For example, in the mid-1980s, New York City faced an

enormous child welfare crisis when staggering numbers of infants were born HIV-

positive and abandoned or orphaned by their parents. New York City reached out to

Little Flower, asking Little Flower to help find homes for these children. This was

not an easy task, given how little was known about the disease and its transmission.

Little Flower eventually provided family placement for over 2,670 children by the

time the acute crisis ended in 1991.

21. In the 1990s, the City struggled with the crack epidemic and

thousands of children were abandoned by their mothers or lost them to addiction.

Little Flower once again helped New York City provide foster care for these most

needy children.

22. When New York State and the City recognized the need to

provide more clinically focused foster homes for youth with moderate to severe

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 emotional and behavioral challenges, Little Flower was among the first foster care

providers to develop therapeutic foster boarding home services to meet this need.

Little Flower's Current Contracts

With ACS and the Contract Extensions

23. In March 1999, ACS sought proposals for the provision of

child welfare services, including foster care services. Little Flower submitted

proposals in response to this request and, in June 2000, the City, acting through ACS,

and Little Flower entered into contracts for Little Flower to provide to ACS foster

care and specialized foster care services in Brooklyn and Queens.

24. These contracts had a term of three years, ending in February

2003 and were renewable and were renewed for two additional three-year terms, until

February 28, 2009.

25. In January 2009, the contracts were extended for an additional

year until February 28, 2010.

26. In February 2010, Little Flower and the City, acting through

ACS, entered into a negotiated acquisition contract extension, extending the contracts

until June 30, 2010. Indeed, relying on this ongoing relationship, and as clear

evidence of its confidence in Little Flower's performance, ACS has referred over 200

children to Little Flower from January 2010 until May 2010. In fact, ACS last

referred children to Little Flower in mid-May, 2010, about a month after it announced

that Little Flower would not be awarded new contracts, suggesting once again, that

Little Flower's performance was not at issue.

27. The parties have agreed to a further extension of the contracts

until December 31, 2010.

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Little Flower Seeks to Continue to Serve New York City's Children

28. On or about August 19, 2009, Little Flower submitted to ACS

the following proposals in response to the RFP: (i) Family Foster Care for Brooklyn

and Queens; (ii) Specialized Family Foster Care for children who have emotional

disorders, for Brooklyn and Queens (collectively with (i) defined above as the

"Proposals"); (iii) Specialized Family Foster Care for Children and Youth with

Mental Retardation and/or Developmental Disabilities ("MRDD"); (iv) Intensive

Specialized Residential Treatment for Children and Youth with MRDD and Other

Intensive Neurological Challenges; and (v) Fiscal Administrator for the East New

York Community Partnership.

29. Although the RFP contemplates the possibility of interviews,

site visits and other forms of direct communication with the proposing agency during

the evaluation process, no inspector, interviewer or evaluator from ACS made any

site visit to Little Flower or conducted any interview of any Little Flower personnel

after Little Flower submitted its Proposals in response to the RFP.

30. In mid-April 2010, ACS notified Little Flower that, while

Little Flower would be awarded a contract based on its proposal for Fiscal

Administrator, it would not be awarded any contracts to provide foster care services

to New York City.

THE RFP IS UNLAWFUL

Background of the RFP

31. The RFP process has been deeply flawed from inception. In

September 2008, ACS issued a Notice of Solicitation, announcing that ACS was

11
 issuing a request for proposals, seeking qualified vendors to operate, inter alia, foster

care services and specialized foster care services for families residing in New York

City (the "Original RFP").

32. In response to the Original RFP, potential proposers, foster

care providers, and the Council of Family and Child Caring Agencies, the principal

membership group for nearly all the voluntary, not-for-profit organizations providing

foster care, adoption, family preservation, and special education services in New

York State, complained that the Original RFP contained conflicting information,

created confusion regarding administrative rates, which were not aligned with current

funding, and contained a significant amount of duplication in requested information.

In November 2008, ACS unilaterally cancelled the Original RFP.

33. Because it had no viable procurement vehicle in place with

which to purchase, among other things, foster care services, ACS simply extended

existing contracts with foster care providers, including Little Flower.

34. On May 20, 2009, ACS issued a second Notice of Solicitation

announcing that it was issuing the RFP, "seeking qualified vendors" to provide, inter

alia, foster care and specialized foster care services to families residing in New York

City. From that date to August 2009, the RFP was amended no less than seven

times, as a result of ACS's own recognition of serious flaws and defects in the RFP

itself. Even these multiple amendments, however, did not correct the fundamental

flaws in the RFP and, as set forth below, it should be invalidated.

The RFP Is Vague, Ambiguous and Indefinite

35. The RFP consists of 185 pages, 15 attachments (an additional

56 pages), 9 appendices (an additional 404 pages) and 7 addenda (an additional 104
12
pages), for a total of 749 pages. (See Exhibit A) The principal document is

organized into six sections: (i) "Timetable;" (ii) "Summary of the Request for

Proposals;" (iii) "Scope of Services;" (iv) "Format and Content of the Proposal;" (v)

"Proposal Evaluation and Contract Award Procedures;" and (vi) "General

Information to Proposers." (RFP at 2)

36. In the "Format and Content of the Proposal" section of the

RFP, the RFP requests that proposals contain a "Program Proposal Narrative" (the

"Narrative"). (RFP at 169) The RFP further instructs that the Narrative be comprised

of three component parts: "Experience," "Organizational Capability" and "Proposed

Approach." (Id.)

37. Critical aspects of the four criteria under the "Experience"

component are impermissibly overbroad and vague. For example, the second

criterion asks proposers to "[d]iscuss your organization's track record of meeting

goals and outcomes for child and family well-being." (RFP at 169) This ambiguous

request provides insufficient guidance to enable proposers to know what ACS is

expecting in response. Similarly difficult to discern is an appropriate response to the

third criterion, which asks proposers to "[d]escribe your organization's history of

collaborating with other service providers, including a discussion of how those

relationships have supported and informed the development of your organization's

services and programs for children and families." (Id. (emphasis added))

38. The "Organizational Capability" component contains three

broad categories: "Organizational Structure," "Infrastructure to Support the Program"

and "Performance & Fiscal Evaluations." (RFP at 170-71)

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 39. Within the first category, "Organizational Structure," there are

two criteria, both of which are impermissibly vague. Item 1 asks proposers to:

Describe how the administrative, managerial, quality

improvement, and fiscal components of your organization
would be leveraged and integrated to ensure visibility and
accountability for the program and support high quality of
services as outlined in the Scope and Standards.

(Id. at 170) Although there are a lot of words strung together here, their meaning is

utterly elusive. What is called for in response is anybody's guess. Similarly, Item

2 asks proposers to, inter alia:

Describe how your organization will strategically position

its Board of Directors, management, and staffing structure
to enhance the implementation of the services as described
in the Scope and Standards.

(Id.) Once again, this bureaucratic jargon is simply incomprehensible.

40. Included within the "Infrastructure to Support the Program"

category are such similarly vague and overbroad requests as that proposers:

Describe the techniques that management and the

supervisory staff will employ to support this program and
its staff and the strategies employed by your organization to
manage turnover rates. . . .

Describe the training program that will be established to

support the training needs of program staff. Provide a
statement about the plan to ensure that initial and ongoing
training requirements for all staff are met.

(Id. (emphasis added)) It is unclear whether the second item seeks a description

of a training program, a statement about a training plan, an actual training

plan, or some or all of the above. Similarly, the RFP vaguely asks proposers to:

Discuss the strategies taken to resolve identified

deficiencies and barriers and to strengthen the organization
and its services.

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 Describe the information technology and systems
infrastructure in place at your organization. Discuss your
organization's capacity to work with electronic data
collection systems and the steps that your organization will
take to improve their infrastructure as the need to upgrade
becomes evident.

(Id.)

41. The "Proposed Approach" component for foster care programs

is divided into four categories, each of which contains multiple criteria. The first

category is "Critical Features of the Program Model and Approach to Practice." Item

1 in this category provides a glaring example of the impermissibly broad and vague

questions posed, as it asks proposers to:

Describe in detail how your organization would provide the

proposed services to meet the needs and expectations as
described in the Scope and Standards, and demonstrate how
your organization's approach would effectively achieve the
stated ACS goals and objectives for the children and
families your organization proposes to serve.

(RFP at 174) This question, a single compound question in a long list with other

questions, asks the proposer to "describe in detail" how the agency will fulfill its

contract and "demonstrate" how the agency will achieve ACS's goals. This question

is pointedly overbroad and a comprehensive response would negate the need to

answer any other question in the RFP. The answer, however, calls for no information

about the agency's actual capabilities to fulfill a contract and achieve ACS's goals.

42. The "Outcomes" category of the "Proposed Approach"

component asks proposers questions of similar, virtually meaningless breadth, to wit:

"[d]escribe your organization's approach to produce core permanency outcomes for

children and youth." (RFP at 175)

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ACS Issued Seven Separate Amendments to the RFP

43. Recognizing that the RFP was defective, ACS amended it on

seven separate occasions during its four-month pendency.

44. The RFP was amended for the first time on May 26, 2009, just

six days after it was issued. Requirements concerning the important "Family Team

Conferences" were changed. (Addendum #1)

45. ACS issued the second amendment on June 8, 2009, which

made several significant changes. One such change was new "casework functions"

related to a "Phase II of Improved Outcomes for Children," described as a "new level

of case management authority and responsibility to providers of foster care."

(Addendum #2 at 1-2; 4-5) Yet, there was no explanation as to whether or how

proposers were to incorporate these new casework functions into their proposals.

46. This same amendment further directed proposers to the ACS

website to obtain the most up-to-date "Family Team Conferencing Protocol," which

was to replace the discussion of Family Team Conferencing in the RFP. (Id. at 5)

No information was provided as to whether or how often this information would be

updated.

47. On July 6, 2009, the RFP was amended for the third time, this

time to change various criteria in the "Scope of Services" section. In addition, the 50-

page hard limit for the Narrative was changed to a suggested page limit. This

addendum also stated that proposals may be double- or single-spaced, giving

proposers discretion to submit a proposal that, in effect, was anywhere from 50 to

100 pages (or more, if the "suggested" page limited were disregarded). (Addendum

#3 at 2)
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 48. On July 28, 2009, the RFP was amended for the fourth time.

Several providers asked ACS for guidance on how they should structure their

proposals, given the number and vagueness of the criteria set forth in the RFP. ACS

refused to provide the requested help, and instead, responded: "[p]roposers should

use their own judgment about how to be responsive to the questions and the

requirements in the scope." (Addendum #4 Q&A at 2 (emphasis added))

49. Another prospective proposer asked:

Can ACS provide more guidance in how proposals are

being evaluated? How, if at all, are budgets being
evaluated? Community connections proposals? What % of
our proposal comprises our budgets if any? Will ACS
consider sharing the scoring methodology to be used (in
more detail that the % for the agency history,
organizational capacity and proposed approach
[components)?].

(Addendum #4 Q&A at 3) ACS's response was to direct the questioner to a two-page

section of the RFP, claiming that it "explains evaluation procedures, evaluation

criteria, and basis for contract award." (Id.) Yet, ACS ignored the fact that the

cryptic and obscure nature of the "evaluation criteria" set forth in the RFP was the

very source of the questioner's confusion.

50. On July 30, 2009, with the deadline for proposals only three

weeks away, the RFP was again amended (now, for the fifth time), and providers

submitted yet another series of questions expressing confusion about the RFP.

Included were questions concerning whether a proposal was expected to address

every single item listed in a particular section of the RFP. (Addendum #5 Q&A at 5)

ACS responded in its typically unhelpful fashion to each question: "[p]roposers may

17
 use their discretion about how to best organize their proposals." (Id.) (emphasis

added)

51. ACS's sixth amendment to the RFP was issued on August 6,

2009. As more fully explained below, in this amendment, ACS informed

prospective proposers that it was expanding its discretion so that it "may, in [its]

sole discretion, consider all factors or criteria set forth in this RFP." (Addendum

#6 at 1 (emphasis added))

52. Finally, addendum number seven was issued on August 12,

2009. (Addendum #7)

The RFP Unlawfully Fails to Provide Transparency with

Respect to the Weight of the Criteria Used to Evaluate Proposals

53. The RFP improperly fails to contain information about the

relative weight of each criterion or category of criteria used to evaluate responding

proposals, leaving proposers to guess at what ACS considered to be the most

important criteria and what they should emphasize in their proposals.

54. Under the RFP's "Evaluation Criteria," the "Experience"

component of the Narrative was assigned a 20% weight, the "Organizational

Capability" component was assigned a 40% weight, and the "Proposed Approach"

component was assigned a 40% weight. (RFP at 183) However, the RFP provided

no information as to the relative importance of each criterion or category of

criteria within each of these broad components.

55. Within the "Experience" section, for example, the RFP

requires the proposer to discuss or describe four specific aspects of the proposer's

organizational history: (i) how the organization's experience will support its ability to

18
administer the proposed services as described in the Scope and Standards; (ii) the

organization's track record of meeting goals and outcomes for child and family well-

being; (iii) the organization's history of collaborating with other service providers;

and (iv) the organization's demonstrated history of commitment to diversity and

cultural competency. (RFP at 169) The RFP provides no guidance at all as to the

relative weight that would be attributed to any of these four criteria within the

"Experience" component.

56. Similarly, although the "Organizational Capability" component

was assigned 40% weight, there was no information at all as to the relative weight

that ACS would accord to any of the approximately 15 different criteria listed under

this broad component -- criteria concerning subjects ranging from information

technology to training programs. (RFP at 170-71) It was entirely possible, therefore,

that information technology would be assigned 30% of the overall 40%, while

training programs would be assigned 5% of the overall 40%, or vice versa. A

proposer simply had no way to understand the relative importance of the various

attributes.

57. Again, although the "Proposed Approach" component was

assigned a 40% weight, there was no information at all as to the relative weight that

ACS would accord to each of 12 criteria listed under this broad component --

including categories as diverse as "Critical Features of the Program Model and

Approach to Practice" and "Foster Parent Support and Recruitment." (RFP at 174-

75) Again, without any guidance or information as to the relative weight of each

category and criterion, it was as much luck as anything else, if a proposal

19
 emphasized the criteria that ACS considered most important in selecting agencies to

perform these critical responsibilities.

58. In July 2009, a prospective proposer asked whether ACS

could "provide more guidance in how proposals are being evaluated," and

whether ACS could share the "scoring methodology to be used (in more detail than

the % for the agency history, organizational capacity, and proposed approach)."

(Addendum # 4 Q&A at 3 (emphasis added)) Demonstrating its flagrant disregard

for the law, which requires transparency in the evaluation process, ACS flatly

refused to answer.

The RFP Emphasized Story-Writing Ability Over Proven Experience

59. In an utterly arbitrary and potentially reckless manner, ACS

determined that only 20% of the proposals' final score would be based on a foster

care provider's actual experience. The remaining 80% of the score, determined based

on "Organizational Capability" and "Proposed Approach," would be graded primarily

on a proposer's ability to write a story explaining how it would achieve ACS's goals,

without any indication that a proposer, in fact, could actually deliver.

60. For example, the "Proposed Approach" component of the RFP

asks the proposer to describe how it "would provide the proposed services," "will

implement the family team conferencing," and "will engage foster and birth families."

(RFP at 174 (emphases added)) For the "Organizational Capability" component, the

RFP requires that the applicant: "Describe how the administrative, managerial,

quality improvement, and fiscal components of [the] organization would be

leveraged and integrated to ensure visibility and accountability for the program and

20
 support high quality of services as outlined in the Scope and Standards." (Id. at 170

(emphasis added))

61. In fact, there is no indication anywhere in the RFP how, if at

all, the annual evaluations that ACS used to rate the actual performance of foster care

agencies would be weighed in a final proposal score. Indeed, given the outcome of

the RFP process, it would appear that such evaluations were not considered at all.

Substantially disregarding historical organizational performance in such an

extraordinarily sensitive area is truly shocking. It only can be described as arbitrary

and capricious in the extreme.

62. Under the scoring system that ACS used, a proposer with no

experience whatsoever in providing foster care could achieve a markedly higher score

than a proposer with decades of exemplary experience simply because it was able to

create a well-written Narrative promising ACS that the proposing agency could

achieve ACS's goals. If a completely inexperienced provider were skilled at

interpreting RFPs -- or could hire someone who had such experience -- and could

successfully divine what factors would be weighed most heavily, such an outcome

would be even more likely.

63. Although the RFP places a great deal of emphasis on a

proposer's ability to promise ACS that it will be able to achieve ACS's goals, the RFP

contains absolutely no mechanism for ACS to ensure that the proposer, in fact, will

be able to fulfill any of its promises.

The RFP Required No Minimum Qualifications for Service Providers

64. Further evidence of ACS's arbitrary and reckless disregard for

experience and its absolute and unchecked discretion in awarding contracts under the
21
RFP, was ACS's ability to award contracts to any nonprofit organization, regardless

of whether the organization had any experience in furnishing child welfare

services or services in any related area. (RFP at 33; Addendum #3 at 3 (requiring

"Minimum Qualifications Requirement" envelope containing only copy of Article of

Incorporation attesting to nonprofit status)) The RFP actually sets forth no minimum

qualifications; indeed, any nonprofit organization could submit a proposal. (RFP at

33)

65. Therefore, the RFP provides no assurance that the contractors

ultimately selected by ACS to provide these very specialized services for New York

City's children and their families would meet any threshold standard of experience.

The fact that 80% of the grade on the proposal could be achieved through proposal

writing skills, rather than proven experience, only serves to underscore this arbitrary

and potentially dangerous provision in the RFP.

The RFP Fails to Ask Providers to Explain How They Will

Provide for the Transfer of Children From Other Agencies

66. Nowhere in the RFP does it ask proposers to explain an

essential function that they will have to perform, i.e., accepting large numbers of

children from other agencies as a result of this procurement process.

67. Because approximately 1,400 children will have to be

transferred out of Little Flower's care, unless something is done to stop it, other

agencies that received contract awards will have to accept transfer of these children.

Yet, no agencies that were awarded contracts were asked -- and none have been

evaluated on the basis of -- whether and how well they will be able to minimize the

trauma to the transferred children, whose sense of institutional predictability will

22
 have been shattered, and whose caseworkers, healthcare workers, therapists, and

other adults with whom they have bonded, all will have been removed from their

lives in a wholesale fashion. Moreover, no agencies that were awarded contracts

were asked -- and none have been evaluated on the basis of -- their ability to achieve

permanency for these children without substantial and damaging delays.

The RFP Fails to Advise Proposers Regarding

An Accurate Per Diem Rate for Family Foster Care Services

68. The RFP provides that the per diem administrative rate per

child for family foster care services during the proposed new contract period would

be $34. (RFP at 29) This means that each agency providing family foster care

services under contract with the City would receive, in addition to the money that it

passes through to the foster parents, $34 per day, per child, for each child in care. On

July 6, 2009, however, ACS notified proposers that "although proposers should

assume a $34.00 per diem administrative rate . . . [b]ased upon available funding, the

rate may change in future years." (Addendum #3 at 14) Thus, ACS, in essence, gave

itself unbridled discretion to change the per diem rate at its will, and proposers had no

way of knowing what budgetary assumptions to make. Clearly, proposers who

described programs based on more generous budgetary assumptions would seem

more appealing than those who made more modest assumptions.

69. Worse still, after receiving and evaluating the proposals ACS

determined (at least for an initial period of the new contracts) to slash the per diem

administrative rate by almost 10%, to $31.77 per day; leaving agencies to figure out

how to provide the programs promised in their proposals with almost 10% less

funding. Proposers were not, however, evaluated on their ability to accomplish this

23
 formidable task and one that is crucial to the care of the children, because the rate

was not changed until after the fact. Thus, the proposals were prepared and evaluated

based on materially incorrect financial information, thereby rendering the entire RFP

process irrelevant and unfair.

The RFP Gives ACS Unlimited Discretion

70. As set forth above, on August 6, 2009, ACS amended the

"Basis for Contract Award" section of the RFP to read: "ACS may, in [its] sole

discretion, consider all factors or criteria set forth in this RFP." (Addendum #6 at 1

(emphasis added)) The corollary of this statement is that ACS need not consider all

or any factors or criteria set forth in the RFP, i.e., that ACS can award contracts to

any agency it favors, regardless of the RFP process.

71. Therefore, not only did proposers bear the risk of guessing

wrong as to how ACS was weighing the criteria set forth in the RFP but, based on

this amendment, proposers bore the additional risk that ACS, on a whim, could fully

disregard any of the criteria.

72. This unbridled discretion makes it impossible for proposals to

be fairly evaluated because it effectively bestows on ACS complete unlimited

discretion to award contracts any way it sees fit, fairly or not.

73. The RFP also states that ACS, in its sole discretion, could, but

is not required to, "conduct site visits and/or interviews and/or . . . request that

proposers make presentations and/or demonstrations, as ACS deems applicable and

appropriate." (RFP at 183)

74. Giving certain proposers this opportunity, while depriving

others of it, could create a material disadvantage to those agencies denied such
24
 opportunities. Moreover, the RFP wholly fails to inform as to the relative importance

such an in-person meeting might have.

75. Favored agencies were given yet a further advantage over

Little Flower. ACS selected certain favored agencies to participate in a pilot program

based on ACS's new foster care modality called "Improved Outcomes for Children"

(the "Pilot Program"). In this Pilot Program, agencies were given financial and

administrative incentives to help children achieve permanency earlier. The Pilot

Program was started in 2007 and the selected agencies became familiar with this

methodology and practice prior to the RFP. The design and focus of the RFP was in

direct alignment with the new Improved Outcomes for Children methodology, giving

the participants in the Pilot Program a distinct advantage over agencies like Little

Flower, which ACS did not select to participate. Not coincidentally, every single

agency that participated in the Pilot Program was included in the list of those

Recommendations for Contracts issued in April 2010.

ACS Shorted the Recommended Contract Awards

By Approximately 3,000 Beds to End-Run the RFP and
Turn Over Care of Those Children to Its Favored Agencies

76. As though ACS's obscure scoring, unlimited discretion, unfair

selection of agencies to participate in the Pilot Program and its failure to require even

minimum qualifications, were not enough to ensure favored agencies received

contracts, ACS contrived a way to circumvent the system entirely.

77. Currently, there are almost 16,000 children in the foster care

system Citywide.

78. In ACS's Recommendations for Contracts for Family Foster

Care and Specialized Family Foster Care issued in April 2010, pursuant to the RFP,
25
 for contract terms beginning October 1, 2010, ACS recommended contracts for just

under 13,000 beds.

79. ACS's recommended awards leave approximately 3,000

children and their families without a foster care provider.

80. Because ACS knows that these children will not magically

disappear on October 1, 2010 -- only four months from now -- ACS will be "forced"

to designate the care of these children to agencies of ACS's choosing, completely

independent of the RFP, and no doubt to ACS's most favored agencies.

81. Indeed, ACS already has started doing so, by exercising

unchecked discretion and notifying various agencies that, at least through June 2011,

these agencies will be reimbursed for foster boarding beds in excess of the beds

awarded to them through the RFP process.

82. Nothing in the RFP protects Little Flower, the foster families,

or the 3,000 children from these arrangements, which are being made outside the RFP

process based on favoritism.

Defendants Have Effectively Denied Little Flower Its Statutory Right to Protest

83. By letter dated April 19, 2010, ACS informed Little Flower

that, based on Little Flower's Proposals, ACS had determined not to recommend that

Little Flower receive contracts to provide foster care services for children in New

York City. This meant that Little Flower would not be able to continue its 80-year

commitment to New York City and some of its most desperate children. This

determination was made as a consequence of a bureaucratic, institutional

procurement process, which was indifferent to the best interest of children,

notwithstanding Little Flower's creditable performance over many years.

26
 84. During an April 20, 2010 meeting with ACS Commissioner

John Mattingly and ACS Executive Deputy Commissioner for Operations, Belinda

Conway, at which the April 19 letter was delivered to Little Flower, Little Flower

asked why its Proposals were not accepted. ACS refused to provide any specific

information in response to this inquiry.

85. The April 19 letter further stated, "If you wish to protest this

decision, you must do so within ten days of receiving this letter." On April 27, 2010,

Little Flower received an e-mail from Patricia Chabla, Agency Chief Contract Officer

of ACS, stating that she was writing "to clarify the timing and procedure of a protest

and debriefing." The e-mail sets forth the following chronology: "after negotiations

have been completed, including the finalization of the budget, the availability of a

draft contract and a positive responsibility determination finding" a public hearing

will be held to address the proposed awarded contracts. After the hearing, ACS will

hold "debriefing" sessions with organizations who request such sessions, and who

"may be in disagreement with [the] award recommendation[s]" made in response to

one or more proposals submitted in connection with the RFP. At the debriefing

session, the requesting organization "will be provided with information on its specific

proposal." If the organization wishes to protest the outcome of its proposal, it must

then do so within ten days of the debriefing date (alternatively, if no debriefing is

requested, the protest is due within ten days after the public hearing). The e-mail

further states that "at this time, it is too early to tell when the public hearings will be

conducted; however, it is my hope that they will be conducted by mid June to early

July."

27
 86. On April 29, 2010, Little Flower was notified that ACS

immediately would begin transferring foster children from Little Flower's care to the

care of other agencies because Little Flower was not going to be awarded new

contracts. On May 27, 2010, Little Flower was notified that the transfers would

begin on June 14, 2010.

87. On June 8, 2010, ACS informed Little Flower that the transfers

instead would begin on August 2, 2010.

88. Despite Little Flower's informal inquiries, a FOIL request, and

its request for a debriefing, ACS still has failed and refused to inform Little Flower as

to why its proposals were not accepted. Indeed, ACS's June 9, 2010 response to

Little Flower's FOIL request states that ACS will "require 90 days in which to reach a

determination," as to whether and how it will respond, thus leaving Little Flower with

no hope of receiving necessary information until, at the earliest, this fall.

89. In the meantime, ACS is making arrangements to transfer to

other agencies the 1,400 children in Little Flower's care, has stopped referring new

cases to Little Flower, resulting in an approximate 6% per month decline in the size

of Little Flower's foster care operation, is working toward scheduling public hearings

in connection with the proposed new contracts and otherwise is taking action in

furtherance of the proposed new contracts.

90. In addition, because ACS stopped referring new cases to Little

Flower in May 2010, Little Flower already is losing revenue and its operations are

contracting. This continuing decrease in its size impacts Little Flower's future and its

28
ability to stay afloat until its protest to ACS and any appeal can be heard -- at the

soonest -- several months from now.

91. Accordingly, ACS and the City are unlawfully denying Little

Flower its statutory right to protest.

DEFENDANTS' ACTIONS WILL CAUSE SERIOUS

AND IRREPARABLE HARM TO LITTLE FLOWER

92. ACS has notified Little Flower that it will begin transferring

children out of Little Flower's care on August 2, 2010.

93. If ACS and the City are not enjoined from transferring children

from Little Flower's care to the care of other agencies, Little Flower will suffer

serious and irreparable harm, which cannot be adequately compensated by money

damages, and once the 1,400 children in Little Flower's care are transferred to other

agencies, they could not be transferred back to Little Flower's care.

94. If ACS and the City are not enjoined from transferring children

from Little Flower's care to the care of other agencies, the foster parents with whom

these children live, in all likelihood, will be transferred with the children. These are

families whom Little Flower recruited, trained and supported and with whom, over

time, Little Flower has built relationships of trust and confidence. Recruiting,

training and supporting foster families to the point at which a relationship of trust is

established is a labor intensive process and takes many months, if not years, to

accomplish. The network of approximately 800 foster families that Little Family has

established, many of whom have great longevity with Little Flower, is a tribute to the

agency and a prized achievement, the loss of which would be devastating and

irreparable.

29
 95. If ACS and the City are not enjoined from transferring children

from Little Flower's care to the care of other agencies, Little Flower will be forced to

lay off approximately one-third of its employees. These employees, many of whom

live in the communities they serve, have been with Little Flower for many years and

have been trained by Little Flower. These employees are irreplaceable. Loss of these

employees would cause Little Flower irreparable harm.

96. Similarly, Little Flower would have to terminate relationships

with outside service providers, such as the lawyers who represent the agency in

termination of parental rights proceedings, mental health providers, who have worked

with the agency for decades in counseling children and families, tutors, health care

professionals and others. Relationships with these providers have been built-up over

many years. If terminated, they cannot be quickly or easily replaced. Loss of these

relationships would cause Little Flower irreparable harm.

97. In addition, such a devastating loss to Little Flower's core

business would force Little Flower to dismantle nearly its entire infrastructure,

including vacating about 90% of its leased space, with attendant financial penalties.

If gone, these basic components of Little Flower's operation cannot be replaced and

Little Flower will suffer irreparable harm.

98. If ACS and the City are not enjoined from transferring children

from Little Flower's care to the care of other agencies, Little Flower's goodwill and

reputation in the industry will be gravely damaged and Little Flower will be

irreparably harmed.

30
 99. If ACS and the City are not enjoined from transferring children

from Little Flower's care to the care of other agencies, Little Flower's statutory right

to protest and appeal therefrom will be rendered a nullity, because if the protest or

appeal were to succeed, it would not be practicable to return the children to Little

Flower's care.

100. If the RFP and the Recommendations for Contracts are not

declared void, and ACS and the City are not enjoined from continuing on their course

of awarding contracts pursuant to the unlawful RFP, Little Flower will suffer

irreparable harm due to the fact that defendants are not referring any new cases to

Little Flower, causing Little Flower's operation to shrink at a rate of 6% per month,

and due to the threat of the elimination of all of Little Flower's foster care operations,

which is impacting Little Flower's relationships with its employees, outside service

providers, vendors, landlords, donors and others.

101. If the RFP and the Recommendations for Contracts are not

declared void, and ACS and the City are not enjoined from continuing on their course

of awarding contracts pursuant to the unlawful RFP, Little Flower will be denied the

opportunity to participate in a fair procurement process and to continue to provide

foster care services to New York City's children, as it has done for the past 80 years,

as contracts will be entered into before Little Flower's rights can be adjudicated and

the RFP invalidated.

31
 FIRST CAUSE OF ACTION
(For Violation of Chapter 13, Section 319 of the New York City Charter)

102. Plaintiff repeats and realleges each and every allegation

contained in each preceding paragraph hereof with the same force and effect as if

fully set forth herein.

103. In issuing the RFP, issuing the Recommendations for

Contracts, denying Little Flower foster care contracts based on its Proposals, ceasing

to refer new cases to Little Flower, and notifying Little Flower that it intends to

transfer children out of Little Flower's care and to the care of other agencies,

defendants acted in violation of Chapter 13, Section 319 of the New York City

Charter.

104. The RFP (i) is vague and indefinite; (ii) failed to require

proposers to provide for transitioning children from other agencies; (iii) lacked

transparency with respect to criteria and the relative weight of each criterion or

category of criteria used in evaluating proposals; (iv) did not adequately consider the

historical performance evaluations that ACS itself gave to agencies; (v) provided

materially incorrect financial information on which proposers based their proposals

and on which proposals necessarily were evaluated; (vi) granted to ACS virtually

unlimited discretion in awarding contracts, including emphasizing proposal writing

over experience and weighing experience inadequately in relation to other factors in

evaluating proposals; and (vii) failed to protect against favoritism. As such, and for

reasons set forth in the preceding paragraphs of this Complaint, the RFP is unlawful

in that it does not allow defendants, and defendants did not use the RFP, to determine

the most advantageous vendors to provide child welfare services to the City, taking

32
into consideration the price and such other factors or criteria as are set forth in the

RFP, in violation of Chapter 13, Section 319 of the New York City Charter.

105. By not including services for approximately 3,000 children

currently in foster care in the Recommendations for Contracts, by notifying certain

agencies that these agencies would be permitted to exceed the number of foster

boarding beds awarded to them through the RFP process, and by including certain

agencies in the Pilot Program and otherwise engaging in favoritism, defendants

further violated Chapter 13, Section 319 of the New York City Charter in that they

used numerous factors or criteria other than those specified in the RFP in evaluating

proposals or awarding contracts.

SECOND CAUSE OF ACTION

(For Violation of Chapter 13, Section 310 of the New York City Charter)

106. Plaintiff repeats and realleges each and every allegation

contained in each preceding paragraph hereof with the same force and effect as if

fully set forth herein.

107. By not including services for approximately 3,000 children

currently in foster care in the Recommendations for Contracts, by notifying certain

agencies that these agencies would be permitted to exceed the number of foster

boarding beds awarded to them through the RFP process, by including certain

agencies in the Pilot Program and otherwise engaging in favoritism, defendants

further violated Chapter 13, Section 310 of the New York City Charter in that they

are procuring services to be paid for out of the City treasury or out of moneys under

the control of or assessed or collected by the City in contravention of the procurement

procedures and policies set forth therein.

33
 THIRD CAUSE OF ACTION
(For Violation of Chapter 13, Section 319 of the New York City Charter)

108. Plaintiff repeats and realleges each and every allegation

contained in each preceding paragraph hereof with the same force and effect as if

fully set forth herein.

109. The RFP failed to ask proposers to explain how they would

provide for the transition of children from one agency to another, including managing

the trauma and delays in permanency associated with such transitions.

110. As such, and for reasons set forth in the preceding paragraphs

of this Complaint, the RFP is unlawful in that it does not allow defendants, and

defendants did not use the RFP, to determine the most advantageous vendors to

provide these services to the City, taking into consideration the price and such other

factors or criteria as are set forth in the RFP, in violation of Chapter 13, Section 319

of the New York City Charter.

111. By not including transition services in the RFP, defendants

further violated Chapter 13, Section 319 of the New York City Charter in that they

used numerous factors or criteria other than those specified in the RFP in evaluating

proposals or awarding contracts for these services.

FOURTH CAUSE OF ACTION

(For Violation of Chapter 13, Section 310 of the New York City Charter)

112. Plaintiff repeats and realleges each and every allegation

contained in each preceding paragraph hereof with the same force and effect as if

fully set forth herein.

113. By not including transition services in the RFP defendants

violated Chapter 13, Section 310 of the New York City Charter in that they are

34
procuring services to be paid for out of the City treasury or out of moneys under the

control of or assessed or collected by the City in contravention of the procurement

procedures and policies set forth therein.

FIFTH CAUSE OF ACTION

(For Violation of Chapter 13, Section 319 of the New York City Charter)

114. Plaintiff repeats and realleges each and every allegation

contained in each preceding paragraph hereof with the same force and effect as if

fully set forth herein.

115. By using factors or criteria in the evaluation and award of

contracts other than those specified in the RFP, defendants have further violated

Chapter 13, Section 319 of the New York City Charter.

SIXTH CAUSE OF ACTION

(For Violation of Section 1-03(a) of the Procurement Policy Board Rules)

116. Plaintiff repeats and realleges each and every allegation

contained in each preceding paragraph hereof with the same force and effect as if

fully set forth herein.

117. In issuing the RFP, using factors or criteria in the evaluation

and award of contracts other than those specified in the RFP, issuing the

Recommendations for Contracts, denying Little Flower foster care contracts based on

its Proposals, ceasing to refer new cases to Little Flower and notifying Little Flower

that it intends to transfer children out of Little Flower's care and to the care of other

agencies, defendants acted in violation of Procurement Policy Board Rules 1-03(a).

118. The RFP (i) is vague and indefinite; (ii) failed to require

proposers to provide for transitioning children from other agencies; (iii) lacked

transparency with respect to criteria and the relative weight of each criterion or

35
category of criteria used in evaluating proposals; (iv) did not adequately consider the

historical performance evaluations that ACS itself gave to agencies; (v) provided

materially incorrect financial information on which proposers based their proposals

and on which proposals necessarily were evaluated; (vi) granted to ACS virtually

unlimited discretion in awarding contracts, including emphasizing proposal writing

over experience and weighing experience inadequately low in relation to other factors

in evaluating proposals; (vii) failed to protect against favoritism; and (viii) is being

administered so as to deny Little Flower its statutory right to protest. In addition,

defendants failed to include over 3,000 children in the Recommendations for

Contracts, notified certain agencies that these agencies will be permitted to exceed

the number of foster boarding beds awarded to them through the RFP process,

included certain agencies in the Pilot Program and otherwise engaged in favoritism.

As such, and for reasons set forth in the preceding paragraphs of this Complaint,

defendants violated the public trust placed in them, raised suspicion and gave the

appearance that they were in violation of their public trust.

119. Defendants further violated Procurement Policy Board Rules

1-03(a)(1)(i) by failing to encourage competition, failing to prevent favoritism and

failing to obtain the best value in the interest of the City and the taxpayers.

120. Defendants further violated Procurement Policy Board Rules

1-03(a)(1)(iii) by failing to ensure fair competitive access to City procurement

opportunities to a broad cross-section of responsible vendors.

36
 121. Defendants further violated Procurement Policy Board Rules

1-03(a)(1)(iv) by failing to deal with the public and with vendors with courtesy,

consideration and even-handedness.

SEVENTH CAUSE OF ACTION

(For Violation of Section 3-03 of the Procurement Policy Board Rules)

122. Plaintiff repeats and realleges each and every allegation

contained in each preceding paragraph hereof with the same force and effect as if

fully set forth herein.

123. In issuing the RFP, using factors or criteria in the evaluation

and award of contracts other than those specified in the RFP, issuing the

Recommendations for Contracts, denying Little Flower foster care contracts based on

its Proposals, ceasing to refer new cases to Little Flower and by ACS notifying Little

Flower that it intends to transfer children out of Little Flower's care and to the care of

other agencies, defendants acted in violation of Procurement Policy Board Rules

3-03.

124. The RFP (i) is vague and indefinite; (ii) failed to require

proposers to provide for transitioning children from other agencies; (iii) lacked

transparency with respect to criteria and the relative weight of each criterion or

category of criteria used in evaluating proposals; (iv) did not adequately consider the

historical performance evaluations that ACS itself gave to agencies; (v) provided

materially incorrect financial information on which proposers based their proposals

and on which proposals necessarily were evaluated; (vi) granted to ACS virtually

unlimited discretion in awarding contracts, including emphasizing proposal writing

over experience and weighing experience inadequately in relation to other factors in

37
evaluating proposals; (vii) failed to protect against favoritism; and (viii) is being

administered so as to deny Little Flower its statutory right to protest. In addition,

defendants failed to include over 3,000 children in the Recommendations for

Contracts, notified certain agencies that these agencies will be permitted to exceed

the number of foster boarding beds awarded to them through the RFP process,

included certain agencies in the Pilot Program and otherwise engaged in favoritism.

125. As such, and for the reasons set forth in the preceding

paragraphs of this Complaint, the RFP is unlawful and defendants violated

Procurement Policy Board Rules 3-03(a)(2), (3), (4), (11) and (g).

EIGHTH CAUSE OF ACTION

(For Violation of Section 2-10 of the Procurement Policy Board Rules)

126. Plaintiff repeats and realleges each and every allegation

contained in each preceding paragraph hereof with the same force and effect as if

fully set forth herein.

127. ACS has notified Little Flower that it will not be awarded any

contracts to provide foster care services for children in New York City in connection

with the Proposals Little Flower submitted in response to the RFP.

128. Despite Little Flower's inquiries, including informal inquiries

to employees at ACS, a formal FOIL request, and a request for a "debriefing,"

defendants have failed and refused to inform Little Flower as to the basis for ACS's

determination.

129. ACS has advised Little Flower that it will provide Little

Flower with a "debriefing," informing Little Flower why its Proposals purportedly

were not acceptable only after public hearings on the proposed new contract awards

38
are held. The hearings will not take place before late June or July 2010. ACS also

has informed Little Flower that its protest pursuant to Procurement Policy Board

Rules 2-10 will be due to be filed ten days after this debriefing.

130. In the meantime, ACS has informed Little Flower that, in

anticipation of the proposed new contracts, ACS no longer will refer new cases to

Little Flower and that ACS has begun talks with other agencies regarding the transfer

of children from Little Flower's care to the care of other agencies and that Little

Flower is required to cooperate with such arrangements, even prior to the debriefing

and prior to the time Little Flower's protest can be filed, heard or appealed. Such

transfers will begin on August 2, 2010.

131. In such circumstances, defendants are violating Procurement

Policy Board Rule 2-10 by denying Little Flower its rights to protest ACS's

determination not to award Little Flower contracts to provide foster care services to

New York City based on the Proposals that Little Flower submitted in response to the

RFP: any paper victory Little Flower could achieve after such protest and appeal

would be virtually unenforceable, as once transferred out of Little Flower's care, the

children could not be transferred back.

NINTH CAUSE OF ACTION

(For Abuse of Discretion)

132. Plaintiff repeats and realleges each and every allegation

contained in each preceding paragraph hereof with the same force and effect as if

fully set forth herein.

39
 133. Defendants owe a duty to Little Flower not to abuse their

discretion and to treat Little Flower fairly in connection with the procurement

process.

134. In issuing the RFP, using factors or criteria in the evaluation

and award of contracts other than those specified in the RFP, issuing the

Recommendations for Contracts, denying Little Flower foster care contracts based on

its Proposals, ceasing to refer new cases to Little Flower, and notifying Little Flower

that it intends to transfer children out of Little Flower's care and to the care of other

agencies, defendants abused their discretion and failed to fulfill their duties.

135. The RFP (i) is vague and indefinite; (ii) failed to require

proposers to provide for transitioning children from other agencies; (iii) lacked

transparency with respect to criteria and the relative weight of each criterion or

category of criteria used in evaluating proposals; (iv) did not adequately consider the

historical performance evaluations that ACS itself gave to agencies; (v) provided

materially incorrect financial information on which proposers based their proposals

and on which proposals necessarily were evaluated; (vi) granted to ACS virtually

unlimited discretion in awarding contracts, including emphasizing proposal writing

over experience and weighing experience inadequately in relation to other factors in

evaluating proposals; (vii) failed to protect against favoritism; and (viii) is being

administered so as to deny Little Flower its statutory right to a protest. As such,

defendants abused their discretion and failed to fulfill their duties. In addition, by

failing to include over 3,000 children in the Recommendations for Contracts,

notifying certain agencies that these agencies will be permitted to exceed the number

40
of foster boarding beds awarded to them through the RFP process, including certain

agencies in the Pilot Program and otherwise engaging in favoritism, defendants

further abused their discretion and failed to fulfill their duties.

TENTH CAUSE OF ACTION

(For Arbitrary and Capricious Conduct)

136. Plaintiff repeats and realleges each and every allegation

contained in each preceding paragraph hereof with the same force and effect as if

fully set forth herein.

137. In issuing the RFP, using factors or criteria in the evaluation

and award of contracts other than those specified in the RFP, issuing the

Recommendations for Contracts, denying Little Flower foster care contracts based on

its Proposals, ceasing to refer new cases to Little Flower, and notifying Little Flower

that it intends to transfer children out of Little Flower's care and to the care of other

agencies, defendants acted arbitrarily and capriciously, abused their discretion and

acted in violation of law.

138. The RFP (i) is vague and indefinite; (ii) failed to require

proposers to provide for transitioning children from other agencies; (iii) lacked

transparency with respect to criteria and the relative weight of each criterion or

category of criteria used in evaluating proposals; (iv) did not adequately consider the

historical performance evaluations that ACS itself gave to agencies; (v) provided

materially incorrect financial information on which proposers based their proposals

and on which proposals necessarily were evaluated; (vi) granted to ACS virtually

unlimited discretion in awarding contracts, including emphasizing proposal writing

over experience and weighing experience inadequately in relation to other factors in

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evaluating proposals; (vii) failed to protect against favoritism; and (viii) is being

administered so as to deny Little Flower its statutory right to protest. As such,

defendants acted arbitrarily and capriciously, abused their discretion and acted in

violation of law. In addition, by failing to include over 3,000 children in the

Recommendations for Contracts, notifying certain agencies that these agencies will

be permitted to exceed the number of foster boarding beds awarded to them through

the RFP process, including certain agencies in the Pilot Program and otherwise

engaging in favoritism, defendants further acted arbitrarily and capriciously, abused

their discretion and acted in violation of law.

139. No previous application for the relief requested has been made.

140. Little Flower has no adequate remedy at law.

WHEREFORE, Little Flower demands judgment:

(a) Declaring that the RFP is violative of the New York City Charter,

Chapter 13, Sections 310 and 319 and the Procurement Policy Board Rules Sections

1-03, 3-03 and 2-10;

(b) Declaring that ACS and New York City acted in violation of the

New York City Charter, Chapter 13, Sections 310 and 319 and the Procurement

Policy Board Rules Sections 1-03, 3-03 and 2-10, abused their discretion and acted

arbitrarily and capriciously in soliciting proposals using the RFP, evaluating

proposals received in response to the RFP, using factors or criteria in the evaluation

and award of contracts other than those specified in the RFP, issuing the

Recommendations for Contracts in connection with the RFP, notifying Little Flower

that it would not receive contracts pursuant to its Proposals, ceasing to refer new

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cases to Little Flower, notifying Little Flower that it will begin transferring children

out of Little Flower's care in connection with the anticipated new contract awards,

and taking any and all other action based on or in connection with the RFP;

(c) Vacating the RFP and declaring it null and void;

(d) Restraining and enjoining ACS and New York City from awarding

any contracts based on proposals submitted in response to the RFP;

(e) Vacating and declaring null and void any and all awards, proposed

awards, or recommended awards issued in connection with the RFP, including the

Recommendations for Contracts;

(f) Restraining and enjoining ACS and New York City from

transferring any foster children from Little Flower's care to the care of other agencies

in anticipation of the proposed new contract awards based on the RFP;

(g) Restraining and enjoining ACS and New York City from taking

any action in furtherance of any award, proposed award, or recommended award,

including conducting any public hearings, in connection with the RFP, including the

Recommendations for Contracts;

(h) Awarding Little Flower the costs, disbursements and attorney's

fees of this action; and

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 (i) Awarding Little Flower such other and further relief as this Court

may deem just and proper.

Dated: New York, New York

June 14, 2010

SKADDEN, ARPS, SLATE,

MEAGHER & FLOM LLP

By:
Daniel L. Kurtz
Heidi B. Goldstein
Sean J. Young

Four Times Square

New York, New York 10036
(212) 735-3000

Attorneys for Plaintiff Little Flower

Children and Family Services of
New York

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