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Automatic Laundries Inc. v. Housing Authority

Decided: May 20, 1957.

AUTOMATIC LAUNDRIES, INC., A CORPORATION OF NEW JERSEY, PLAINTIFF,
v.
HOUSING AUTHORITY OF THE CITY OF BAYONNE, A BODY CORPORATE AND POLITIC, AND LOUIS KONIGSBERG, TRADING AS TRIPLE E WASHING MACHINE COMPANY, DEFENDANTS



Smith, J.s.c.

Smith

The defendant Housing Authority owns and operates three housing projects in the City of Bayonne, Hudson County, New Jersey. On July 21, 1956 this defendant advertised for bids for washing machine and dryer service at its said projects.

Three bids were received, of which plaintiff's was economically best in that it offered the Housing Authority the highest annual rebate, as I recall, $2,475.

Triple E Washing Machine Company, the co-defendant, offered the second highest rebate, $2,260. The Housing Authority awarded said co-defendant the contract, nevertheless, as evidenced by its award, although the contract has never as yet been executed.

Plaintiff in its complaint seeks judgment that said awarding of the contract to the defendant Triple E and the contract itself be set aside, and that this court restrain and enjoin the defendant Housing Authority from executing a contract and that the court enter a judgment awarding the contract to the plaintiff.

Plaintiff's contention, as the court understands it, is that it has the right to institute such proceeding under R.S. 40:48-5, which provides that a municipality may contract away services to the public provided that there be due advertisement for bids after which the contract shall be let to the lowest bidder. Plaintiff's position is that it is the lowest bidder and, therefore, is the one who submits the most advantageous bid to the Authority.

The plaintiff's further contention is that the resolution of the defendant Authority to the effect that the plaintiff is not a responsible bidder is of no force and effect because

the award was granted before a hearing was held and this should render the hearing ineffective. Kelly v. Freeholders of Essex , 90 N.J.L. 411 (Sup. Ct. 1917); Harrington's Sons Co. v. Jersey City , 78 N.J.L. 610 (E. & A. 1910).

The argument of the plaintiff is that the testimony at the hearings before the defendant Authority failed to disclose that plaintiff was not a responsible bidder. Plaintiff was willing to post a bond for the guarantee of all payments due to the Authority under the contract, and was willing to procure and provide new machines as required by the terms of the contract and had the experience, financial ability and the machinery necessary for faithful performance and discharge of the contract.

Defendant Housing Authority's position is that the furnishing of washing machines and dryers for the use of the tenants in its projects is not a service to the public within the meaning of R.S. 40:48-5 and that said defendant, therefore, was not required to advertise for bids, and, further, when the defendant did so advertise, it was not obligated to award the contract to the lowest bidder. Automatic Voting Machine Co. v. Board of Chosen Freeholders of Bergen County , 120 N.J.L. 264 (Sup. Ct. 1938).

Defendant Authority further urges that even if it is assumed competitive bidding was required, the evidence and the facts clearly demonstrate that the plaintiff was not the lowest responsible bidder and was consequently not entitled to the award of the contract. The defendant Authority further urges that if it acted in good faith and made a finding adverse to the plaintiff upon said facts and evidence adduced at the four hearings held from October 24, 1956 to January 15, 1957, then the court should not set aside the Authority's findings and determination.

Defendant Authority further contends that even if this court should set aside the awarding of the contract to the co-defendant, Triple E Washing Machine Company, it does not have the power to award the contract to the plaintiff or anyone else, but can ...


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