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Remsco Associates Inc. v. Raritan Township Municipal Utilities Authority

Decided: June 28, 1971.

REMSCO ASSOCIATES, INC., A CORPORATION OF THE STATE OF NEW JERSEY, AND JOSEPH WENDLINGER, PLAINTIFFS-APPELLANTS,
v.
RARITAN TOWNSHIP MUNICIPAL UTILITIES AUTHORITY, A BODY PUBLIC, POLITIC AND CORPORATE (AND EIGHT OTHERS), DEFENDANTS-RESPONDENTS



Conford, Kolovsky and Carton. The opinion of the court was delivered by Kolovsky, J.A.D. Carton, J.A.D. (concurring).

Kolovsky

A three-count complaint was filed in this action on June 11, 1970 by a taxpayer of Raritan Township and by Remsco Associates, Inc. (Remsco), allegedly the lowest bidder responding to an invitation for bids for the construction of a sewage treatment plant advertised by defendant Raritan Township Municipal Utilities Authority (the Authority).

The first count sought an adjudication that the Authority acted illegally when, on April 28, 1970, it awarded the contract for such construction to defendant Perkins, Kanak & Foster, Inc. (P.K. & F.) instead of to plaintiff Remsco. The second count demanded damages from the individual

members of the Authority; the third sought a determination that the sale of the Authority's bonds was "invalid."

The trial court granted defendants' motion for summary judgment on all three counts; this appeal followed. Plaintiffs have expressly abandoned their appeal from the grant of summary judgment on the second and third counts, leaving for our consideration only the propriety of the grant of summary judgment on the first count.

The Authority was created pursuant to the Municipal Utilities Authorities Law, N.J.S.A. 40:14B-1 et seq. It advertised for bids on three contracts: Contract No. 1, for sewer lines, trunks, and collector systems; Contract No. 2, for the construction of a sewage treatment plant, and Contract No. 3, for pumping stations.

At the Authority's meeting of April 10, 1970 plaintiff Remsco, defendant P.K. & F. and several other companies submitted bids on Contract No. 2. Remsco's total bid was $1,975,000; P.K. & F.'s was $2,154,000. The bids were referred to the Authority's engineer for his examination and report.

At its meeting of April 15, 1970 the Authority was advised by its engineer and attorney that irregularities in Remsco's bid made it impossible to determine whether Remsco or P.K. & F. was in fact the low bidder. Remsco requested a public hearing to review its bid. That hearing took place at a special meeting of the Authority held on April 28, 1970 at which representatives of Remsco (its vice-president) and P.K. & F. were present.

The minutes of the meeting disclose that it opened with a statement by the Authority's attorney, that

Remsco's representative did not dispute that its bid did not indicate either what its bid would be if it furnished the equipment specified in the instructions to bidders or what, if any, the difference in price would be if it furnished some ten items of equipment which it proposed to substitute for the specified items and which its bid stated were equal to the specified items. Rather, he contended that "he was not obliged to list any differences in price" and that any differences should inure to Remsco's benefit and not to the Authority.

When pressed as to whether Remsco would perform the contract for its bid of $1,975,000 if the Authority insisted on the use of the specified items, he said, "I'm not prepared to answer but our bid would probably be about $100,000 greater." (Defendants contend that a week earlier Remsco had told the Authority's engineer it would be approximately $150,000 higher.)

Following some additional colloquy and statements by the Authority's engineer and attorney, respectively, as to why they had "concluded that the bid of Remsco, Inc. is not in proper form and so improperly prepared that it is not possible to determine the actual cost to the Authority if specific equipment is required," the Authority adopted a resolution rejecting Remsco's bid and a second resolution "tentatively" awarding the contract to P.K. & F., the "bona fide" low bidder. The "tentative" nature of the award was ...


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