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DGR Company v. State, Department of Treasury

361 N.J. Super. 467, 825 A.2d 1203 (App. Div. 2003)

PUBLIC BIDDING—A state agency that publishes contradictory requests for bids may decline to award a contract and instead call for new bids.

A state agency sought to consolidate two offices and requested a unit of the Treasury Department that handles State leases of real property to find it a location. That department, the Division of Property Management and Construction (DPM), advertised for lease proposals in the desired geographic area. “Most versions of the advertisement stated the parking requirement as 70 spaces, but at least one stated it as 125 spaces.” There were two bidders and the DPM deemed both to be acceptable, but chose the lower priced one. The unsuccessful bidder protested the successful bidder’s parking arrangements. That challenge prompted DPM “to reject the bids, clarify the parking requirement and choose to readvertise and rebid the lease, on the ground that the confusion about the parking requirement might have discouraged proposals from other potential lessors who could have provided adequate parking but not 125 spaces.” In fact, it eventually determined that 80 parking spaces would be suitable. The losing bidder argued that the bid request called for 125 spaces and that only it could satisfy that condition. Therefore, it argued that the DPM lacked the authority to reject its bid because its bid was, in fact, the only conforming proposal. The Appellate Division disagreed. It pointed out that “[a]n agency may change or withdraw its space planning request even after [DPM] has begun to receive proposals.” Further, DPM has separate authority to reject all proposals after receipt of a challenge. It also found that the final version of the successful bidder’s proposal satisfied the state agency’s “parking requirement, that the advertisements were inconsistent in stating the parking requirement, and that the version reciting the requirement as 125 spaces might have discouraged other potential lessors who could have arrange to provide a lower but still adequate number of spaces.” The Court was particularly focused on the fact that “there was no way to prove or disprove the existence for other potential lessors who would have responded if they thought the parking requirement was for fewer than 125 spaces.” As a result, “there was nothing to undermine the ‘strong presumption’ that [DPM] acted reasonably in deciding that the inconsistency might have wrongly discouraged other eligible potential lessors from responding.”

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