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Code Inspections, Inc. v. Township of Willingboro

A-4388-98T3 (N.J. Super. App. Div. 2000) (Unpublished)

PUBLIC BIDDING—A municipality must either reject all bids or accept the lowest responsible bid within 30 or 60 days after the bids are open, depending upon the controlling statute.

This public contracts matter arose after a private inspection company’s bid to provide inspection services to a municipality was rejected for its failure to address three local criteria. The municipality issued a request for proposals (RFP) for third-party inspection services. The RFP set forth a description of the work to be performed and the requirements for submitting a proposal. Each bidder was to submit a qualifications statement including responses to thirteen questions which mirrored those set forth in N.J.A.C. 5:23-4.5A(d). No other requirements were listed. The municipality’s Construction Official determined that this private inspection company was not qualified and thus its bid would not be opened. In an interoffice memorandum from the Construction Official to the Township Manager, the Construction Official indicated that this company and three other bidders were not qualified because they had failed to address three local criteria. The three local criteria were: “1) the speed with which the agency can respond to emergency requests for inspections, 2) the speed with which the agency can perform plan review, and 3) the thoroughness with which the agency can carry out violations of unsafe structures and action to correct these violations.” It was unclear if these four bidders were given notice of the additional requirements. The inspection company filed a written request with the Department of Community Affairs seeking a hearing pursuant to N.J.A.C. 5:23-4.5(k). The matter was transferred to the Office of Administrative Law (OAL) for a hearing as a contested matter pursuant to N.J.S. 52:14B-1 to -15 and N.J.S. 52:14F-1 to -13. Subsequently, the Township Solicitor recommended all bids be rejected and the contract rebid. The inspection company filed a written complaint with the OAL on July 2, 1997. The Administrative Law Judge (ALJ) held that although the municipality’s disqualification of the successful bidder was arbitrary, capricious, and unreasonable, the inspection company was not entitled to any remedy aside from the hearing. The Commissioner’s Final Decision essentially affirmed the ALJ’s decision. On April 12, 1999, the company filed a notice of appeal. The appellate division recognized that the RFP complied with the requirements set forth in the Uniform Construction Code and that inspections company addressed the thirteen requirements set forth at N.J.A.C. 5:23-4.5A(d)(1) to (13). It recognized further that the governing body must base its selection of an inspection agency on the criteria set forth at N.J.A.C. 5:23-4.5A(e)(1) to (6). The Code states that the contract shall be awarded to the bidder that offers to charge the lowest percentage of the Department’s fees and is determined by the governing body . . . to be able to effectively enforce the subcode(s) for which the bid was submitted. N.J.A.C. 5:23-4.5A(b)(3). The Appellate Division found that the municipality’s rejection of all bids and rebidding of the contract to be an error. N.J.A.C. 5:23-4.5A(g) provides that a municipality must “accept the successful low bid, or reject all bids, within 30 days of the bid opening… .” The Appellate Division concluded that if the inspection company was the lowest qualified bidder, it should be awarded the contract. The case was remanded for a determination of whether the inspections company was in fact the low bidder.

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