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Township of River Vale v. R.J. Longo Construction Co.

Decided: March 4, 1974.

TOWNSHIP OF RIVER VALE, PLAINTIFF,
v.
R.J. LONGO CONSTRUCTION CO., INC. AND CAMPOLI AND SON, INC., DEFENDANTS



Pressler, J.c.c., Temporarily Assigned.

Pressler

This declaratory judgment action, submitted to the court for disposition by way of motion and cross-motions for summary judgment,*fn1 raises the single legal question of the right of a municipality to award a public works contract to the lowest bidder, who, in lieu of accompanying his bid with the 10% certified check required by the published notice and instructions to bidders, submitted a bid bond in the penal sum of the required amount.

The lowest bidder, defendant R.J. Longo Construction Co., Inc. (Longo), claims that it is entitled to the award of the contract, asserting that submission of the bid bond constituted substantial compliance with the municipal requirements for a security deposit. The second lowest bidder, defendant Campoli and Son, Inc. (Campoli), claims that it is entitled to the award of the contract, asserting that Longo's submission of the bid bond in lieu of a certified check constituted a material noncompliance with the municipal requirements, thus disqualifying it as the lowest responsible and complying bidder. Plaintiff Township of River Vale, faced with these defendants' conflicting demands, chose the course of awarding the contract to neither, seeking instead,

by the commencement of this action, a judicial declaration as to which bidder is entitled thereto.

The essential facts, as demonstrated by the pleadings, affidavits, exhibits and stipulations of the parties, are not in dispute.

River Vale is in the process of installing, in progressive stages and by bond financing, a municipal sanitary sewer system to be ultimately connected to the extended trunk lines of the Bergen County Sewer Authority. On December 19, 1973 it advertised for bids on so-called "Contract No. 6, Northern Valley Lateral Sewers." The advertisement required that each bid be accompanied by a consent of surety, that is, an undertaking by a surety company to provide the municipality with a performance bond in the full amount of the bid if the bidder were successful in obtaining the contract, and by a certified or cashier's check in the amount of 10% of the bid or $20,000, whichever was less. The advertisement further provided that the conditions of the deposit were the execution by the low bidder of the contract and his furnishing of the required performance bond, the deposited sum to be forfeited as liquidated damages upon the bidder's default of either condition. The instructions to bidders, in the provision requiring the certified or cashier's check, specifically stated that "Proposal or bid bonds will not be accepted."*fn2 Plaintiff, in both the advertisement and in its instructions to bidders, expressly reserved the right to waive any "informalities, irregularities or minor defects in the bids received," or to reject all bids. The instructions further provided

that the township " may consider informal, irregular, or defective any bid not prepared and submitted in accordance with the provisions hereof" (emphasis added).

The 13 bids received by River Vale in response to its advertisement were opened on the evening of January 31, 1974, at the specified time and place. Longo's low bid, in the amount of $1,419,180, had annexed to it a bid bond in the penal sum of $20,000, conditioned as required by the notice to bidders. Campoli's bid, in the amount of $1,449,185, was accompanied by a certified check in the amount of $20,000. The 11 other bids, all higher than Campoli's, were also accompanied by certified checks. The question of the acceptability of Longo's bid having been raised when the bids were opened, Longo, the following morning, submitted a certified check in the amount of $20,000 to the municipal clerk.

It is not suggested that Longo's bid in any other way failed to meet the specifications. It is also not disputed that both Longo and Campoli are deemed "responsible" by plaintiff and that both submitted with their bids a properly completed and adequate statement of qualification. Nor is it disputed that Longo, in prior bidding for plaintiff's public works contracts, had submitted certified checks. Longo's explanation for the bid bond here submitted, as stated in the affidavit of its president, is simply that it was

Plaintiff originally assumed that it had neither the power nor the discretion to waive its certified check requirement in these circumstances, irrespective of any inclination it might have had to do so, and its complaint demanded judgment declaring that it should award the contract to ...


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