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T.N. Ward, Inc. v. South Jersey Transportation Authority

A-3900-09T4 (N.J. Super. App. Div. 2010) (Unpublished)

PUBLIC BIDDING — A regional authority established by New Jersey statute as a body corporate within a state agency is not considered to be local contracting unit within the definition of the Local Public Contracts Law, but is subject to the State Bidding Law instead.

A regional authority advertised for bids for a construction project. The second-lowest bidder wrote to the authority claiming defects with the lowest bid and demanded that the bid either be rejected or be awarded to it, the second-lowest bidder. An informal hearing was held by the authority’s staff to listen to the second-lowest bidder’s arguments. The next day, the authority unanimously adopted a resolution awarding the contract to the lowest bidder. The second-lowest bidder appealed and moved for a stay of the contract.

The regional authority had been established by New Jersey statute as a body corporate within the State Department of Transportation. Thus, the Court concluded that the authority was not a local contracting unit within the definition of the Local Public Contracts Law (LCPL), and instead was subject to the State Bidding Law.

The State Bidding Law allows a contract to be awarded to the single, lowest responsible bidder. Since the bid amounts were not in dispute, the only issue for determination was whether the regional authority erred in concluding that the lowest bid was free of material defects. A defect is considered material if its waiver would deprive the public of performance according to the specified requirements and its waiver would give one bidder a competitive advantage over others.

First, the second-lowest bidder argued that a material defect existed when the lowest bidder listed a subcontractor that did not hold industry certification. However, the lowest bidder included a second subcontractor in the same category of work, and that second subcontractor did possess the certification. Thus, the Court found that the specifications were met, since the certified subcontractor could perform all of the work that required a certified subcontractor. The Court found that an anti-bid shopping law contained in the LCPL did not pertain to the regional authority, because no similar provision existed in the State Bidding Law.

Additionally, the Court rejected the second-lowest bidder’s contention that the lowest bid was defective because some subcontractors did not submit price quotes to the lowest bidder in advance of the bid in certain delineated categories. The State Bidding Law simply does not require advance price quotes, but only requires that the bidder identify all subcontractors to whom the bidder will subcontract. The lowest bidder complied with that requirement.

Finally, the Court rejected any argument that the lowest bid was defective because it contained misrepresentations as to the level of involvement by small business enterprise subcontractors. This data collected by the regional authority was only required for information purposes thus, even if there were a defect, it would not have been material.

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