PROCEDURAL HISTORY AND STATEMENT OF FACTS

This project generally consists of approximately 9.7 miles of pavement milling; the furnishing and installation of Superpave Hot Mix Asphalt 12.5M64; roadway based repairs; curb and sidewalk replacement; public sidewalk curb ramp construction; installation of detectable warning surfaces; traffic striping and other miscellaneous related work items."

[See Notice to Bidders attached to plaintiffs'
Verified Complaint at Exhibit A.]

The Bidding Package included a Bid Document Submission Checklist as required by N.J.S.A. 40A:11-23.1.a. The bottom of the Checklist provides, "THE FAILURE TO SUBMIT ANY ONE OF THE MANDATORY ITEMS SHALL BE DEEMED A FATAL DEFECT THAT SHALL RENDER THE BID PROPOSAL UNRESPONSIVE." [See Exhibit D at Pg. B-1 attached to plaintiffs' Verified Complaint, Emphasis in Original.]

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Page B-2 of the Checklist has two sections, Section A and Section B. Each of the two sections requests some documents to be submitted with the bid. Section B the Bid Document Submission Checklist, Page B-2, Section B thereof, provides that, "Failure to submit the following documents may be a cause for the bid to be rejected. (N.J.S.A. 40A:11-23.1b)." (Emphasis Supplied.). One of the documents listed under Section B is a "Certification of Bidder showing that Bidder owns, leases or controls any necessary equipment."

Section A, by contrast, provides, inter alia, "Failure to submit the following documents is mandatory cause for the bid to be rejected. N.J.S.A. 40A:11-23.2." One of the requested documents in Section A is a list of all subcontractors that the bidder will use.
Plaintiffs allege that, contrary to Section B, X Xxxxxxxx failed to submit a Certification that it possessed or had access to a paving and milling machine known as a profiler, and, contrary to Section B, failed to list a subcontractor that would provide the paving and milling services with a profiler.

Plaintiffs filed a Verified Complaint with a brief alleging that the City was mandated as a matter of law to reject X Xxxxxxxx' bid. Plaintiffs also allege that X Xxxxxxxx failed to list three or more past contracts it has had for $4,000,000.00 or more. Plaintiffs, however, have also failed to do this. As set forth in more detail below in Point IV, one of the contracts plaintiffs listed (for $4,500,000.00) was for multiple roadway projects lumped together. Plaintiffs have not satisfied this aspect of the bid requirements themselves.

The court issued an Order to Show Cause with temporary restraints on April 18, 2007, that set a hearing date of May 11, 2007.

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ARGUMENT

I. THE ALLEGED DEFECTS IN X Xxxxxxxx' BID SUBMISSIONS DID NOT REQUIRE REJECTION OF THE BID

A. In General / Burden of Proof.

The Local Public Contracts Law ("LPCL"), N.J.S.A. 40A:11-1 et seq., requires that a public contract be awarded to the lowest responsible bidder. N.J.S.A. 40A:11-4(a). “The term ‘responsible’ refers to the bidder's quality, fitness, and capacity to satisfactorily perform the proposed work.” N.E.R.I. Corp. v. New Jersey Highway Authority, 147 N.J. 223, 242-43 (1996).

"[M]inor or inconsequential discrepancies and technical omissions [in a bid for a public contract] can be the subject of waiver." Meadowbrook Carting Co., Inc. v. Borough of Island Heights, 138 N.J. 307, 314 (1994), citing Terminal Const. Corp. v. Atlantic County Sewerage Authority, 67 N.J. 403, 411 (1975), and Hillside Tp., Union County v. Sternin, 25 N.J. 317, 324 (1957).

Essentially this distinction between conditions that may or may not be waived stems from a recognition that there are certain requirements often incorporated in bidding specifications [that] by their nature may be relinquished without there being any possible frustration of the policies underlying competitive bidding. In sharp contrast, advertised conditions whose waiver is capable of becoming a vehicle for corruption or favoritism, or capable of encouraging improvidence or extravagance or likely to affect the amount of any bid or to influence any potential bidder to refrain from bidding, or which are capable of affecting the ability of the contracting unit to make bid comparisons, are the kind of conditions [that] may not under any circumstances be waived.

Meadowbrook Carting Co., Inc., supra, at 314-15.

The Supreme Court in Meadowbrook Carting Co., Inc., also adopted a two-prong test originally set forth in River Vale Tp. v. R. J. Longo Const. Co., Inc., 127 N.J. Super. 207 (Law Div. 1974), and later adopted by the Appellate Division in L. Pucillo & Sons, Inc. v. Township of Belleville, 249 N.J. Super. 536 (App. Div.), certif. denied, 127 N.J. 551 (1991), for determining whether a bid should be rejected for a deficiency. The two considerations are "first, whether the effect of a waiver would be to deprive the municipality of its assurance that the contract will be entered into, performed and guaranteed according to its specified requirements, and second, whether it is of such a nature that its waiver would adversely affect competitive bidding by placing a bidder in a position of advantage over other bidders or by otherwise undermining the necessary common standard of competition". Meadowbrook Carting Co., Inc., supra, at 315, (inner quotation marks omitted), citing L. Pucillo & Sons, Inc., supra, at 249 N.J. Super at 547, quoting Palamar Constr., Inc. v. Township of Pennsauken, 196 N.J. Super. 241, 255 (App. Div. 1983), and River Vale Tp., supra, at 216.

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Accordingly, under Meadowbrook Carting Co., Inc., there are five factors are to be considered by the court in determining whether a bid should be rejected for a deficiency. Those five factors are whether:

(a) A waiver would constitute "corruption or favoritism", Id. at 314-15;

(b) The waiver is "capable of encouraging improvidence or extravagance or likely to affect the amount of any bid or to influence any potential bidder to refrain from bidding", Id.;

(c) The waiver is "capable of affecting the ability of the contracting unit to make bid comparisons", Id.;

(d) "[T]he effect of a waiver would be to deprive the municipality of its assurance that the contract will be entered into, performed and guaranteed according to its specified requirements", Id. at 315; and,

(e) The deficiency "is of such a nature that its waiver would adversely affect competitive bidding by placing a bidder in a position of advantage over other bidders or by otherwise undermining the necessary common standard of competition, Id.

The Appellate Division recently refused to interfere with a municipality's decision to grant a public contract because there was no evidence of “arbitrariness, unreason or caprice”. Framan Mechanical, Inc. v. Brookdale Community College, 2006 WL 506064, *2 (App. Div. 2006).

The burden of proof rests with the plaintiffs to prove their entitlement to the contract. Serenity Contracting Group, Inc. v. Borough of Fort Lee, 306 N.J. Super. 151, 159 (App. Div. 1997), certif. denied, 153 N.J. 214 (1998). Serenity Contracting Group, Inc., was cited in 2006 with continued approval by the Appellate Division for its burden of proof. Framan Mechanical, Inc., supra, at *2.

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B. Certification of Necessary Equipment.

The entry in the Bid Document Submission Checklist, attached as Exhibit D to plaintiff's Complaint, Page B-2, Section B thereof, that plaintiffs complain about requires submission of a, "Certification of Bidder showing that Bidder owns, leases or controls any necessary equipment." Plaintiffs complain that X Xxxxxxxx failed to submit a Certification that it possessed or had access to a paving and milling machine known as a profiler.

Failure to submit this Certification does not require rejection of the bid. Besides the fact that the Public Notice does not make reference to a profiler and that plaintiffs' Complaint fails to allege that one is required for the job, the Bid Document Submission Checklist, Page B-2, Section B thereof, provides that, "Failure to submit the following documents may be a cause for the bid to be rejected. (N.J.S.A. 40A:11-23.1b)." (Emphasis Supplied.) Likewise, N.J.S.A. 40A:11-20 provides that, at its option, a public agency "may" require a bidder to provide such a Certification.

It is axiomatic that the term "may" is permissive when used in legal instruments. "'May' is a permissive and not an imperative verb which is to be given its natural and ordinary meaning, barring a clear contextual indication of a different usage." Harvey v. Board of Chosen Freeholders of Essex County, 30 N.J. 381, 391 (1959). See also In re Pathmark Stores, Inc., 367 N.J.Super. 50, 59 (App. Div. 2004) (citing Harvey for this proposition). There is nothing mandatory about the submission of the Certification in either the language of the Public Notice or the controlling statutes, N.J.S.A. 40A:11-23.1b and N.J.S.A. 40A:11-20.

Without providing a legal citation to support its position, plaintiffs argue that under the language of N.J.S.A. 40A:11-20 (the statute providing that a bidder "may" be required to submit a Certification), if a public agency requires the Certification from the bidder, the bid must be rejected, without exception, for failure to do so. Plaintiffs wrote that, "Once the contracting unit opts to include such a statement [], compliance becomes a material, unwaivable and incurable condition of the bid." [Pb, at 22.]

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A bidder would never be able to cure a deficiency if plaintiffs' position was adopted, and that is clearly not the law. Meadowbrook Carting Co., Inc., supra, at 314. A Certification of Necessary Equipment is not one of the submissions that are mandated by N.J.S.A. 40A:11-23.2, and there is no language in N.J.S.A. 40:11-20 mandating the Certification or mandating that the bid be rejected as a matter of law for failure to provide one. In fact, there are only three cases from the State of New Jersey that even cite to N.J.S.A. 40:11-20.

Plaintiffs cite to Deininger v. Borough of Englewood Cliffs, 103 N.J.L. 297 (Sup. Ct. 1927) (plaintiffs inadvertently provided the cite as being 103 N.J.S. 297. The correct cite is 103 N.J.L. 297). This case holds that it was sufficient for a bidder to, inter alia, submit a purchase order for necessary equipment along with the bid in lieu of a statement that the bidder was actually in possession or had access to the equipment. Derininger says absolutely nothing about whether such a Certification is mandatory or "material" and whether failure to provide one requires rejection of the bid. As stated above, such a Certification is not mandatory as a matter of law. N.J.S.A. 40A:11-20.

The recent case of P & A Const., Inc. v. Township of Woodbridge, 365 N.J. Super. 164 (App. Div. 2004), cited by plaintiffs, is factually off-point. That case pertained to failure to provide a Certified Financial Statement. That case does not hold that failure to provide a Certification of Necessary Equipment is fatal. Reference to documents in that case other than the Certified Financial Statement, which was all that was under review on appeal, is dicta. “[M]ere dicta [is] not binding”. State v. Hempele, 120 N.J. 182, 221 (1990). See also Innes v. Carrascosa, 391 N.J. Super. 453, 918 A.2d 686, 708 (App. Div. 2007) (Superior Court Reporters' page numbers were not available in Westlaw for this case); and, Marshak v. Weser, 390 N.J. Super. 387, 394 (App. Div. 2007)(quoting Hempele, supra).

The remainder of the cases cited by plaintiff to support this position are from 1909, 1933, 1950 and 1965. Those cases are Tufano v. Borough of Cliffside Park, 110 N.J.L. 370 (Sup. Ct. 1933); Albanese v. Machetto, 7 N.J. Super. 188 (App. Div. 1950); Case v. Trenton, 76 N.J.L. 696 (Sup. Ct. 1909); and, J. Turco Paving Contractor v. City of Orange, 89 N.J. Super. 93 (App. Div. 1965). These are aged cases that have hardly ever been relied upon by our courts. Albanese has never been cited by one of our courts (cited once by a Maryland court in 1955) and Case has never been cited.

J. Turco Paving Contractor is off-point in that one of the reasons for rejection of the bid was that the bidder was unqualified to perform the job, equipment or not. That case does not hold that a bid should be rejected merely for failure to certify that the bidder is in possession of the proper equipment and other items in order to perform the job. The bidder was unqualified in addition to lacking proper equipment and other necessities. Surely, being qualified is both "material" and mandatory. The sole issue raised on appeal in that case was whether the plaintiff had standing to sue due to the fact that he was not a taxpayer. J. Turco Paving Contractor, supra, at 95. Everything else is dicta.

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Tufano, supra, is equally off-point. There, the bidder conceded to not having a permit to transport the garbage and ashes that were the subject of the contract, did not have the equipment to do so or even a place to legally dump the materials. Tufano, supra, at 372. Just like in J. Turco Paving Contractor, supra, the Tufano bidder was unqualified to perform the job. A bidder cannot expect a public contract when he or she is not legally permitted to perform the contracted job by having a permit. That is not a situation presented in the case at bar.

Finally, these four cases, Albanese, Case, J. Turco Paving Contractor, and Tufano, pre-date our Supreme Court's 1994 ruling in Meadowbrook Carting Co., Inc. v. Borough of Island Heights, 138 N.J. 307 (1994), and do not address the before mentioned five criteria adopted in that case at Page 315. As stated previously, the five criteria are

(a) A waiver would constitute "corruption or favoritism", Id. at 314-15;

(b) The waiver is "capable of encouraging improvidence or extravagance or likely to affect the amount of any bid or to influence any potential bidder to refrain from bidding", Id.;

(c) The waiver is "capable of affecting the ability of the contracting unit to make bid comparisons", Id.;

(d) "[T]he effect of a waiver would be to deprive the municipality of its assurance that the contract will be entered into, performed and guaranteed according to its specified requirements", Id. at 315; and,

(e) The deficiency "is of such a nature that its waiver would adversely affect competitive bidding by placing a bidder in a position of advantage over other bidders or by otherwise undermining the necessary common standard of competition, Id.

Meadowbrook Carting Co., Inc., is controlling in this case, not caselaws from between 40 and 98 years ago.

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C. Subcontractors.

The mandatory documents are listed at Page B-2, Section A, of plaintiffs' Exhibit D. Section A provides that, "Failure to submit the following documents is mandatory cause for the bid to be rejected. N.J.S.A. 40A:11-23.2." The entry for the mandatory submission that plaintiffs complain of provides, "A listing of subcontractors as required by N.J.S.A. 40A:11-16 and N.J.S.A. 40A:11-23.1 (as applicable)" (Emphasis Supplied). This statement clearly provides that a list of subcontractors are only required as required in N.J.S.A. 40A:11-16 and N.J.S.A. 40A:11-23.1 "as applicable".

1. N.J.S.A. 40A:11-16.

N.J.S.A. 40A:11-16 is not applicable at all. It only pertains to contracts relating to "the construction, alteration or repair of any public building". Id. This statute provides, inter alia,

In the preparation of plans and specifications for the construction, alteration or repair of any public building by any contracting unit, when the entire cost of the work will exceed the bid threshold, the architect, engineer or other person preparing the plans and specifications may prepare separate plans and specifications for

(1) The plumbing and gas fitting and all kindred work;

(2) Steam power plants, steam and hot water heating and ventilating apparatus and all kindred work;

(3) Electrical work;

(4) Structural steel and ornamental iron work; and

(5) All other work required for the completion of the project.

The contracting agent shall advertise for and receive, in the manner provided by law, either (a) separate bids for each of said branches of work, or (b) bids for all the work , goods and services required to complete the building to be included in a single overall contract, or (c) both. In the case of a single bid under (b) or (c), there shall be set forth in the bid the name or names of all subcontractors to whom the bidder will subcontract the furnishing of plumbing and gas fitting, and all kindred work, and of the steam and hot water heating and ventilating apparatus, steam power plants and kindred work, and electrical work, structural steel and ornamental iron work, each of which subcontractors shall be qualified in accordance with P.L.1971, c. 198 (C.40A:11-1 et seq.).

Id. (Emphasis Supplied).

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Plaintiffs concede that X Xxxxxxxx submitted a list of its subcontractors, pursuant to the Bid Document Submission Checklist, and N.J.S.A. 40A:11-16 if plaintiffs wish to deem it, for the electrical work and line striping, but claim that it failed to list its paving and milling subcontractor. [Pb, at 11, 27.] N.J.S.A. 40A:11-16 does not state that failure to provide one the documents required in that statute requires rejection of the bid, hence we must look to the language and intent of the Public Notice. Borough of Princeton v. Board of Chosen Freeholders of County of Borough of Princeton v. Board of Chosen Freeholders of County of Mercer, 333 N.J. Super. 310, 325 (App. Div. 2000), quoting Cruz-Mendez v. ISU/Insurance Servs., 156 N.J. 556, 570-71 (1999).

2. N.J.S.A. 40A:11-23.1.

As to the second statute referred to by the Bid Document Submission Checklist [Exhibit D, Pages B-1 to B-2 of plaintiffs' Complaint], N.J.S.A. 40A:11-23.1. As stated above, Page B-2 provides that this statute only applies "as applicable".

N.J.S.A. 40A:11-23.1 only pertains to traffic control and related issues. That has no bearing on this case and is not alleged as a reason for rejection of the bid in plaintiffs' Complaint. This statute mandated the City to prepare the Bid Document Submission Checklist, which it did, setting forth all requested submissions, but this statute does not state that failure of the bidder to submit one of the documents mandates rejection of the bid. Id. A list of subcontractors is not even required by the language of N.J.S.A. 40A:11-23.1. The words "subcontractor" or "subcontract" do not appear anywhere in that statute.

C. Plaintiffs' Expansion of the Checklist's Requirements.

Plaintiffs attempt to circumvent the fact that N.J.S.A. 40A:11-16 and N.J.S.A. 40A:11-23.1 are hardly applicable to this action. They submit that, "The List of Subcontractors form does not limit itself to the four specialty trades delineated in N.J.S.A. 40A:11-16, but rather is far more general. It sets up three columns denominated simply 'Trade', 'Company' and 'Address'." [Pb, at 8.]

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That is a non-sense argument. The City did not intend to broaden the specialty areas set forth in N.J.S.A. 40A:11-16 simply because it provided slots for the trade, company and address of the subcontractor. There are four specialty areas set forth in N.J.S.A. 40A:11-16, so of course there is an area for the bidder to enter which of those specialties the subcontractor practices. Plaintiffs' argument in this regard is totally devoid of merit and they provide no legal citation to support it.

In Sea Concrete Corp. v. Lucas Bros., Inc., 370 N.J. Super. 60 (App. Div. 2004), the Appellate Division declined to hold that it was per se fatal to fail to submit a list of subcontractors required by the Bid Document Submission Checklist notwithstanding whether or not the document is one of the mandatory items set forth in N.J.S.A. 40A:11-16. Rather, the court referred to the proposition set forth in P & A Const., Inc. v. Township of Woodbridge, 365 N.J.Super. 164 (App. Div. 2004), to the effect that the contracting unit may disregard it unless it was "material".

We recently considered the meaning of this sentence in a similar, if not identical, checklist. See P & A Constr., Inc. v. Tp. of Woodbridge, 365 N.J.Super. 164, 168, 838 A.2d 520 (App.Div.2004). At that time, the sentence stated that failure to submit any of the documents in section B “ may be a cause for the bid to be rejected.” (emphasis added). In P & A, Judge Skillman concluded that the meaning of that phrase was “not that submission of those items is optional, but rather that failure to submit one of those items will result in rejection of the bid if the contracting agency finds the deficiency to be material.” Id. at 171, 838 A.2d 520. Judge Skillman further suggested that the form, which was presumably prepared by the Division of Local Government Services, should be changed. Id. at 178, 838 A.2d 520. We have no cause to determine the precise meaning of the apparent change in the checklist from “may” to “will” in section B because this appeal relates exclusively to section A of the checklist.

Id. at 65, fn. 1.

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II. THE CONTRACTING AGENCY CLEARLY SPECIFIED WHEN IT INTENDED A DEFICIENCY TO MANDATE REJECTION OF THE BID

"The court's goal is to ascertain the 'intention of the parties to the contract as revealed by the language used, taken as an entirety ..., the situation of the parties, the attendant circumstances, and the objects they were thereby striving to attain.'” Borough of Princeton v. Board of Chosen Freeholders of County of Borough of Princeton v. Board of Chosen Freeholders of County of Mercer, 333 N.J. Super. 310, 325 (App. Div. 2000), quoting Cruz-Mendez v. ISU/Insurance Servs., 156 N.J. 556, 570-71 (1999).

The contracting agency clearly stated when it intended an alleged deficiency to be fatal. If the agency specified in some sections that failure to comply with a requirement was fatal, but did not state so in other sections, the sections without that statement should be reasonably construed to mean that the agency did not intend for a deficiency of the requirements in the sections without the statement to require rejection of the bid.

For example, the "Information for Bidders" section of the Public Notice, Section 32 entitled "Business Registration of Public Contractors", page IB-22, second paragraph thereof, provides, "Failure to submit proof of registration shall be deemed a fatal defect that shall render the bid proposal unresponsive and that cannot be cured by the governing body." The public agency intended such a deficiency to be fatal, so it said so. There is no such language regarding the statements and certifications allegedly required regarding ownership or access to necessary equipment, including a profiler, the bidder's professional references and an exhaustive list of its subcontractors.

If the public agency intended this to be fatal, it would have stated so like it did with other alleged requirements that the agency deemed to be indispensable.

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III. THERE ARE NO ISSUES OF FAVORATISM OR UNFAIR COMPETITION PRESENTED BY THIS CASE

Plaintiffs contend that it constituted unfair practice for X Xxxxxxxx to allegedly have failed to specify that it had possession or access to a paving and milling machine known as a profiler. Plaintiffs contend that their company purchased a profiler for $550,000.00 and imply that there was unfair competition because X Xxxxxxxx did not go through a similar expense. Plaintiffs provide no legal citations to support this position.

None of the bidders were required to purchase a profiler. Plaintiffs did so on their own volition and are not entitled to favoritism over bidders who rent them. The fact that plaintiffs own their own profiler is irrelevant.

IV. PLAINTIFFS’ ARGUMENT THAT X Xxxxxxxx ’ FAILURE TO LIST THREE PROJECTS OF $4,000,000 OR MORE LACKS MERIT

The Department of Public Works’ Questionairre is included under Section B which reads: “Failure to submit the following documents may be a cause for the bid to be rejected.” Plaintiffs argue that this language restricts the bidding to only those who have had three or more prior contracts for $4,000,000.00. That would limit bidders and is contrary to the Local Public Contracts Law.

It is interesting that plaintiffs raise this argument when they have failed to meet that criteria themselves. Attached as Exhibit B is a letter from CME Associates, who are the engineers for the Borough of Sayreville, which shows that the plaintiff has misrepresented that they had one road project for $4,500,000.00. Not one is the total amount incorrect, but the figure of $4,500,000.00 is actually for several different road projects lumped together.

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V. THE COURT SHOULD DEFER DECISION WHILE A COPY OF PLAINTIFFS' BID PACKAGE IS PRODUCED AND REVIEWED

To date, this action has been pending for less than a month. X Xxxxxxxx has not had an opportunity to obtain or review a copy of plaintiffs' bid submissions to determine whether they were in total compliance with all of the bid proposal requirements. As stated above, plaintiffs have no standing to sue unless they have complied with absolutely all of the bid proposal requirements. A Notice to Produce is being served by X Xxxxxxxx to plaintiffs at the time that this brief is being submitted.

Under J. Turco Paving Contractor, Inc., supra, plaintiffs' bid submissions are under review in this action just as much as X Xxxxxxxx' bid submissions are being reviewed.
The court is asked to defer decision until plaintiffs' bid submissions are produced and reviewed.

CONCLUSION

Accordingly, the Court should dismiss plaintiffs' claims for the foregoing reasons.

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