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Star of the Sea Concrete Corp. v. Lucas Brothers, Inc.

370 N.J. Super. 60, 850 A.2d 559 (App. Div. 2004)

PUBLIC BIDDING; SUBCONTRACTORS—The public bidding requirement that bidders list their subcontractors is not limited to work on public buildings; it applies to road widening projects as well.

A county solicited bids for the widening and repaving of a section of roadway. The bid package required the bidders to submit certain documents as required by the Local Public Contracts Law, N.J.S.A. 40A:11-23.2, which included, among other things, a requirement to provide a written list of the subcontractors. The low bidder failed to include a list of its subcontractors, but was awarded the contract anyway. The next lowest bidder filed suit and the lower court found that omitting the list of subcontractors was non-waivable and a fatal error. It awarded the contract to the second lowest bidder. The low bidder appealed. The Appellate Division affirmed. The low bidder claimed that the requirement to provide a written list was not applicable to a contract to widen a public road. It noted that the statute required the submission of a list of subcontractors “pursuant to Section 16” of the Local Public Contracts Law. Section 16 refers to the preparation of plans and specifications for the alteration, construction, and repair of public buildings. The low bidder argued that there was no requirement to submit a list of contractors since its contract was for the widening of a public roadway and not for building a public building. The Court rejected that argument, finding it inconceivable that the legislature intended to have a non-waivable requirement to submit subcontract lists for public buildings but not for all other public projects. The Court also noted that the low bidder’s interpretation was inconsistent with prior cases which held that the failure to list the subcontractors was a material, fatal, and non-waivable error. There is a public purpose in requiring a bidder to submit its list of contractors. Without the requirement, a contractor could negotiate or renegotiate with different subcontractors after the contract is awarded in an effort to reduce its cost and increase its profit margin at the expense of the municipality. If that happened, the municipality and the general public would not reap of the benefit of the reduced labor cost.

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