Skip to main content

Failure to Award to the Lowest Bidder RFP 09-X-20513 Contract T0002 for Bottled Water

A-2747-08T2 (N.J. Super. App. Div. 2010) (Unpublished)

PUBLIC BIDDING — Once public bids have been opened and each bidder’s competitive position has been exposed, rejecting all bids should be done only for cogent or compelling reasons.

A state procurement division awarded a contract to sell and deliver bottled water to state agencies in fifteen counties for a period of three years. Prior to the contract’s expiration, the procurement agency issued a Request for Proposal (RFP) for another three year contract to provide bottled water (five gallon bottles). Only the existing vendor and another company submitted bids. The existing vendor did not include a deposit charge on its bottles, but included a rental charge for its refrigerated coolers, while the other company included a deposit charge for each bottle which was fully refundable upon return. The agency gave public notice of its intent to award the contract to the new supplier. The existing vendor filed a protest, asserting, in part, that the other company’s bid was deficient for failing to indicate the manufacturer, brand, model name, and model number on all specified equipment for all counties, and that this deficiency required that the bid be considered non-responsive.

The Division Director agreed with this assertion, and rescinded its notice. However, the Director instructed the division to re-bid the entire contract with textual and format changes to the RFP to facilitate the bidders’ understanding and accomplishment of the requirements for effective bidding. Despite further protest from the existing vendor, the Director eliminated certain provisions and price lines for deposit charges for the five gallon bottles, and eliminated the refrigerated coolers as a bid item in its new RFP. The existing vendor appealed the Director’s decision to re-bid, asserting that the Director had failed to demonstrate a compelling justification.

The Appellate Division agreed that the Director failed to meet the required standard to cause re-bid. It reversed the Director’s decision, ordering on remand that the contract be awarded to the existing vendor. The Court held that the Director’s decision to re-bid was not supported by substantial evidence in the record. The Court said that once bids have been opened and each bidder’s competitive position has been exposed, rejecting all bids should be done for cogent or compelling reasons. The Court concluded that while the Director agreed that the other company’s failure to provide manufacturer, brand, model name and number of the equipment it offered was a flaw that rendered its bid non-responsive, her rationale for rebidding to make language in the proposal clearer, and eliminate provisions and price lines for deposit charges, was not responsive to the non-remedial flaw in the other company’s bid. Therefore, the Director failed to demonstrate a compelling reason to order a re-bid.

66 Park Street • Montclair, New Jersey 07042
tel: 973-783-3000 • fax: 973-744-5757 •