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Vanas Construction Co., Inc. v City of Jersey City

2010 WL 5185088 (N.J. Super. App. Div. 2010) (Unpublished)

PUBLIC BIDDING — Even though items called for in the bidding specifications are not statutorily mandated, failure to supply those items may be a material and non-waivable defect, and if they are, the deficient bids may be set aside.

A municipality advertised for bids in connection with two projects. The specifications required that prospective bidders and their subcontractors each complete and submit numerous documents. Two of those documents were a “Certificate of Experience” and a “Plant and Equipment Questionnaire.” The lowest bidder on each project failed to include these completed documents from their subcontractors. The municipality notified the first project’s bidder, and that bidder subsequently provided the omitted documents. The municipality advised the second project bidder that it had to submit the requisite documents within twenty four hours. The second lowest bidders in each case challenged the municipality’s having allowed the lowest bidders to cure the deficiencies. They argued the initial submissions were non-responsive and were material defects making the bids null and void. The municipality ruled the deficiencies were only minor defects which could be, and were, cured. After the municipality awarded the projects to the lowest bidders, the two second lowest bidders sued to set aside the municipality’s selections.

The lower court found that the bids were materially defective and the defects were non-waivable. Therefore, it set aside the awards. All bidders had been put on notice, by the express language of the bid information and specifications, that failure to include the completed two documents would result in automatic rejection at the time of bidding. The lower court reasoned that receipt of the documents by the municipality would allow the municipality to determine whether the low bidders and their subcontractors were sufficiently experienced, financially able, and in possession of the facilities and moral integrity necessary to perform the contracts in question. It concluded the municipality’s action in awarding the two contracts to the two lowest bidders violated the Local Public Contracts Law. The lower court also was satisfied that the municipality, upon receipt of the incomplete bid submissions, had been deprived of adequate assurance that the contracts could be performed, and felt there was not a common standard of competition between bidders because the conditions and specifications of the bidding process did not apply to all prospective bidders.

On appeal, the Appellate Division affirmed, remarking that the deficient submissions were not statutorily mandated but were mandated within the bidding process. Thus, the issue was whether the deficiencies were material and non-waivable, or only minor and waivable. The Court agreed with the lower court that such a waiver would deprive the municipality of its assurance that the contract would be performed and guaranteed according to its specified requirements. The original bid materials only provided the municipality with the names and addresses of the subcontractors who would work on the projects, and did not give their work histories, their past performance schedules or their intended work plans for the projects at bid. The Court also agreed that the two lowest bidders were afforded an unfair bidding advantage when they were not required to submit the subcontractor documentation in their initial bid submissions. Therefore, the conditions and specifications of the bidding process were not equally applied to all bidders. Awarding the contract to one who fails to comply on all terms necessary creates an inequity in the bidding process and an opportunity for favoritism. For those reasons, the deficiencies were ruled material and non-waivable. The Court concluded that, generally, contracts are not to be awarded simply to the lowest bidder, but rather to the lowest bidder that complies with the substantive and procedural requirements in the bid advertisements and specifications.


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