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Spina Asphalt Paving Excavating Contractors, Inc. v. Borough of Fairview

304 N.J. Super. 425, 701 A.2d 441 (App. Div. 1997)

PUBLIC BIDDING—This is a public bidding case where the Court allows a bidder to correct an obvious error in a unit price after the bids were opened, finding the mistake “nonmaterial” and subject to waiver.

The Borough of Fairview requested bids for sewer work. The request specified that if there was a discrepancy between the unit prices and the computed totals, the unit price would prevail. A contractor erroneously filled in $400.00 for the unit price instead of the actual $4.00 unit price. However, the computed total was correctly listed as $5,400.00, and the contractor’s intended overall bid was more than $2,000.00 lower than the next lowest bid. Since the unit price controlled, the Borough simply used the $400.00 figure without checking the calculations and awarded the contract to a third party. The contractor filed an action alleging that the Borough failed to recognize that its bid was the lowest. Both parties moved for summary judgment and the Law Division held that the contractor’s mistake was “nonmaterial” and subject to waiver, i.e., the Borough could have awarded the job to the contractor. The Borough appealed, but the Appellate Division affirmed judgment in favor of the contractor. Both courts relied on Township of River Vale v. R.J. Longo Construction Co., 127 N.J. Super. 207 (Law Div. 1974), in making their decision.

Township of River Vale established a two part test for determining whether noncompliance with bid specifications is not substantial and waivable. The first half of the test is to determine whether the effect of the waiver would deprive the municipality of its assurance that the contract will be performed and guaranteed according to its requirements. The remainder is determining whether the noncompliance is of such a nature that waiver would adversely affect competitive bidding by giving one bidder in an unfair advantage over other. Both the Law Division and the Appellate Division held that the intended price should be substituted for the price erroneously listed on the bid sheet. The Appellate Court stated that where the error is obvious and the true intent of the bidder clear, the mistake should be disregarded. The Court also stated that a public entity’s decision to waive non-compliance with bid specifications is subject to review under the ordinary abuse of discretion standard. In this case, the Court held that since failure to waive non-compliance would “thwart the aims of public bidding laws”, the Borough must waive the contractor’s mistake.

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