Case Law Summaries

In the Matter of the Protest of Award of the NJ Turnpike Auth. Contract R-1375C-HVAC to Sunnyfield

• Opinion Date: April 26, 2002
• Business Law
• E-Mail

PUBLIC BIDDING— Failure to comply with a bid requirement that the bidder demonstrate it has a worker training program is a material, non-waivable irregularity.

The New Jersey Turnpike Authority solicited bids for heating, ventilating, and air-conditioning (HVAC) work at one of its rest areas. The bidding documents required each of the contractors to, inter alia, demonstrate training programs for its workers. The Authority received five bids ranging from approximately $238,000 to approximately $483,000. However, of the five bids, only the high bidder complied with the Turnpike Authority’s bidding requirements by describing its worker training programs. The Authority notified the other four bidders of the deficiencies in their bids. In response, the low bidder amended its proposal to list “Vocational-Technical Adult School Apprentice Program” as the training program for its workers. The Authority, after it received the low bidder’s amended proposal, attempted to verify the training program specified but was unable to verify that it existed. Therefore, the Authority rejected the low bidder’s bid as well as the other three bids, and awarded the contract to the high bidder. The low bidder filed a formal bid protest with the Authority. The Authority’s Director found that the condition imposed in the bidding specifications was material and was not subject to waiver. Specifically, he noted that “the requirement that bidders provide craft training ... is one that would affect the amount of a bid as well as one that could influence many bidders to refrain from bidding. Accordingly, it is material and not waivable.” The low bidder appealed. The Appellate Division recognized that its role in reviewing an agency decision is limited to four types of inquiries: 1) whether the agency’s decision offends the State or Federal Constitution, 2) whether the agency’s action violates legislative policies, 3) whether the record contains substantial evidence to support the agency’s action, and 4) whether the agency clearly erred in reaching a conclusion that otherwise could not have been made on a showing of the relevant factors. Accordingly, the Appellate Division’s role is to “uphold an administrative agency’s decision if that decision is supported by substantial, credible evidence.” Further, it found that “although the Local Public Contracts Law require[s] the awarding of bids to the lowest responsible bidder, the bid must conform with the contract specifications. Material conditions as opposed to minor or inconsequential conditions contained in bidding specifications may not be waived.” Finally, contract conditions “demonstrating a present ability to perform have been found to be so material as not to be the subject of waiver.” Here, the Appellate Division found that the low bidder’s “failure to provide an identifiable and verifiable craft-training program for those specialties required under the contract was directly related to its ability to perform the job.” Such failure amounts to “a material, non-waivable irregularity.”

Copyright ©2003. Meislik & Meislik. All rights reserved.