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Ernest Bock & Sons, Inc. v. Mercer County Improvement Authority

A-0051-09T2, A-0150-09T2, and A-0199-09T2 (N.J. Super. App. Div. 2010) (Unpublished)

PUBLIC BIDDING — A public bid form requiring that a bidder provide the names and addresses of owners with a greater than ten percent interest is not satisfied merely by the bidder having previously filed such a statement with another bidding agency even if that statement is a matter of public record.

A state authority awarded a public works contract to the lowest bidder for the construction of a new criminal courthouse. Attached to the required bidding materials to be submitted by all bidders was a form captioned Statement of Ownership. Pursuant to state law, the form required the bidder to provide the names and addresses of any stockholder in the bidding company with greater than a ten percent interest. The lowest bidder’s form simply listed a corporate holding company as its sole shareholder. The next lowest bidder alleged that bid was materially defective for failing to comply with the ownership disclosure requirements The low bidder responded by submitting a form that had been filed a year before with another agency during its prequalification process. The form named the three individual shareholders with greater than ten percent interests in the company. The second lowest bidder filed suit challenging the award.

The low bidder claimed its bid was not defective because its public records filing with the agency of the state that had prequalified it for state work fully disclosed its shareholders and therefore it had complied with the bidding requirements. The bidding authority supported the low bidder and relied upon the form submitted earlier during prequalification. The lower court rejected the low bidder ‘s claim of compliance because the low bidder had not submitted the three names on the specific disclosure form that was part of a necessary bid submission to the bidding agency. The Court held that the ownership disclosure statement had to be submitted at the time specified by the contracting unit for the receipt of bids. It concluded that, under law, the disclosure must be submitted to the entity that is actually running the bidding. Thus, the Court rescinded the contract award to the low bidder.

The Appellate Division affirmed the rescission, holding that the ownership disclosure had to occur at the time the bids were to be received, and could not be referenced under a disclosure document that predated the bidding process. Additionally, the Court cited that, pursuant to this bid, the ownership corporate disclosure was to be submitted separately even if there was proof of prequalification. It believed that the bidding law’s clear language had to be enforced in order to circumscribe the authority of local contracting agencies to waive bid defects.

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