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All Clean, Inc. v. Department of Treasury, Division of Purchase and Property

A-555-04T2 (N.J. Super. App. Div. 2005) (Unpublished)

PUBLIC BIDDING—Unsuccessful bidders who bid on a public contract without first objecting to the specifications lack standing to attack the legality of those specifications.

An unsuccessful bidder appealed from the denial of “its challenge to the award of a contract for janitorial services” for certain state properties. Although it had the lowest bid, its bid violated the following condition of the Request for Proposal: “No more than 850,000 sq. ft. will be awarded to any one contractor for all State facilities managed by the Department of Treasury.” Even though the complaining bidder attended a mandatory pre-bid conference, it did not question the subject provision. The Appellate Division rejected the unsuccessful bidder’s argument finding that the bidder’s “contention that the specifications [were] illegal or unreasonable” was unavailing. According to the Court, “[i]t is the established law of [New Jersey] that unsuccessful bidders who bid on a public contract without first objecting to the specifications lack standing to attack the legality of those specifications because ‘one cannot endeavor to take advantage of a contract to be awarded under illegal specifications and then, when unsuccessful, seek to have the contract set aside.’” The Court also rejected the unsuccessful bidder’s arguments that the requirement was facially unreasonable or arbitrary. The bidder also argued that the bidding condition could be waived, but the Appellate Division disagreed. Under long established law, one of the tests is whether the “effect of a waiver would be to deprive the [public entity] of its assurance that the contract will be entered into, performed and guaranteed according to its specified requirements.” According to the Court, there was no assurance that the contract would be adequately performed. Granting a waiver would also have “clearly adversely affect[ed] the competitive bidding process” by placing the unsuccessful bidder “in a position of advantage over other prospective bidders similarly situated who did not bid based on a clear reading of the” square footage limitation requirement.


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