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Seacoast Builders, Inc. v. Howell Township Board of Education

315 N.J. Super. 442, 718 A.2d 1225 (App. Div. 1998)

PUBLIC BIDDING—When a project is broken up for bidding into separate elements, the public authority can not award fewer than all the separate contracts and rebid the remaining ones.

A board of education advertised for construction bids. As required by statute, the board advertised for both a single overall contract and for separate contracts for each of the prime elements. No overall bid was submitted. Three prime contract bids were acceptable, but there was a problem with the other two. The HVAC bid exceeded the architect’s limit by too great an amount. The lowest bidder for the general construction portion of the project requested that it be released from its bid because of a calculation error, and the board agreed. The board then awarded contracts to the three other prime contractors and placed the two remaining elements out for rebid. As a result, the bidder that would have had the lowest bid for the general contracting portion of the contract sought a judgment compelling award of the general construction contract to it. It claimed that the statute mandates that a board must award all five prime contracts to the lowest responsible bidders at the same time, even if one or more of the bids exceed the architect’s budget. Therefore, the Court was faced with an issue of first impression in New Jersey—does N.J.S. 18A:18A-18 mandate the award of all five prime contracts to the lowest responsible bidder at the same time, or can a board award contracts at different times through the continued use of the statutory process? To answer this question, the Court looked at rulings from other states and also looked at the provision of the Notice to Bidders that placed a duty upon the contractors to meet specified completion dates. That duty required all five prime contractors to coordinate their efforts, and in the Court’s view, piecemeal award of the five contracts could only impede that mandate and lead to delays, cost overruns, claims for extras, and time consuming and costly litigation. Consequently, although in this particular case the Court ordered that the three successful bids could be accepted while rebidding of the two other portions of the project took place, in the future, the law is to be interpreted to mandate that all prime contracts be awarded at the same time.


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