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Clyde N. Lattimer & Son Construction Company, Inc. v. Township of Monroe Utilities Authority

370 N.J. Super. 130, 850 A.2d 601 (App. Div. 2004)

PUBLIC BIDDING; SUBCONTRACTORS—The Anti-Bid Shopping Law only requires a contractor to obtain subcontractor’s bids where it has named a single subcontractor for a particular trade, but the court invites the Legislature to review this anomaly.

A municipal utility authority invited public bids for a pumping station repair project. The lowest bidder, who was awarded the contract, estimated the costs of the electrical work to be performed by its subcontractor but did not obtain a price quotation. The second lowest bidder challenged the awarding of the contract. It claimed that the bid winner was required to obtain a price quotation from its electrical subcontractor, and that by failing to do so, it violated the Anti-Bid Shopping Law, N.J.S.A. 40A:11-16. The Appellate Division, in affirming the lower court’s decision, rejected the losing bidder’s claim. It found that the Anti-Bid Shopping Law only requires a contractor to obtain bid prices when it has multiple subcontractors for a particular trade. It does not require a bid price when there is only one subcontractor for that trade. Here, since the contractor only had one electrical contractor to do all the electrical work, there was no requirement to obtain a price quotation prior to submitting the bid. The losing bidder claimed that by not requiring the contractor to obtain pre-bid quotes, the general public would be hurt because the contractor then could negotiate a lower price with the subcontractor than it estimated in the bid and keep the excess, requiring the public to pay a higher price for the project than necessary. The Court however noted that, even if the contractor could have gotten a lower price quotation on the electrical work, the contractor’s bid was still lower than the loser’s bid and the public still saved money. The losing bidder also argued that because no price quotation was secured, the project could stall if the electrical contractor sought more money than was estimated by the contractor in the winning bid. The Court rejected that argument, noting that the contractor was obligated to use the electrical subcontractor even if its price was higher since it was not permitted to substitute an unnamed contractor. The Court went on to opine that pre-bid quotes from single subcontractors for a particular trade are appropriate, but not required, under the law.

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