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Trap Rock Industries Inc. v. Sagner

Decided: March 23, 1976.

TRAP ROCK INDUSTRIES, INC., A NEW JERSEY CORPORATION, RESPONDENT,
v.
ALAN SAGNER, COMMISSIONER OF THE DEPARTMENT OF TRANSPORTATION, APPELLANT



For affirmance -- Justices Sullivan and Pashman and Judge Conford. For reversal -- Justices Mountain, Clifford and Schreiber. Justices Clifford and Schreiber join in this opinion.

Per Curiam

Three members of the Court vote to affirm substantially for the reasons expressed by the Appellate Division and three members of the Court would reverse for the reasons expressed in the separate opinion of Justice Mountain. The Court being equally divided, the judgment of the Appellate Division is affirmed.

MOUNTAIN, J. Three members of this equally divided Court vote to affirm the decision of the Appellate Division substantially for the reasons set forth in its opinion, reported at 133 N.J. Super. 99 (1975). For convenience I will hereafter refer to this as the prevailing opinion.

On November 23, 1971 this Court decided Trap Rock Industries, Inc. v. Kohl, 59 N.J. 471 (1971), cert. den., 405 U.S. 1065, 92 S. Ct. 1500, 31 L. Ed. 2d 796 (1972), in which we upheld the decision of then Commissioner of Transportation, John C. Kohl, to suspend Trap Rock as a qualified bidder on highway contracts to be awarded by the Department of Transportation. The decision rested upon the fact that the president and board chairman of Trap Rock, Michael J. Stavola, who was also the owner of 80% of its capital stock, had been indicted for conspiracy to bribe and for offering a bribe to a member of the State Police. Stavola was subsequently convicted. Pursuant to proceedings

following Stavola's conviction, the Commissioner of Transportation, acting under authority granted by N.J.S.A. 27:7-35.8, barred Trap Rock for a period of five years from bidding on highway contracts. This determination was also sustained by this Court. Trap Rock Industries, Inc. v. Kohl, 63 N.J. 1 (1973). The decision to debar Trap Rock was expressly without prejudice to its right to apply for reinstatement during the five year period, if it could demonstrate that Michael J. Stavola had divested himself of all interest in the corporation and had ceased to exercise control of it. Trap Rock did so apply for reinstatement. Following a hearing, Commissioner Kohl decided, on June 29, 1973, that Stavola had in fact divested himself of all interest in and control over the corporation. Accordingly, as of that date, he ordered reinstatement.

Thereafter Trap Rock submitted bids with respect to various highway projects, was upon occasion the successful bidder and performed work for the Department of Transportation. On September 5, 1974 the corporation entered a plea of guilty in the United States District Court for the District of New Jersey to an indictment charging it with having unlawfully made and filed a false federal income tax return for the fiscal year ending February 28, 1970. It was sentenced on its guilty plea and ordered to pay a fine of $3,500. Upon learning of this development Commissioner Sagner immediately held a hearing at which he determined that Trap Rock lacked the moral integrity to continue as a qualified bidder with respect to highway contracts. From this decision an appeal was taken to the Appellate Division, which reversed the Commissioner's ruling. We granted certification. 68 N.J. 160 (1975).

My chief reason for registering dissent from the views expressed in the prevailing opinion rests upon a conviction that it announces an unfortunate and quite serious departure from the position taken by this Court in Trap Rock Industries, Inc. v. Kohl, supra, 59 N.J. 471. In that case a unanimous Court, speaking through former Chief Justice

Weintraub, analyzed in some depth and with a good deal of precision the nature of the relationship between the State and those from whom it purchases services or materials. It may provide a useful preface to quote some significant passages from that opinion:

We start with the premise expressed in Perkins v. Lukens Steel Co., 310 U.S. 113, 127, 60 S. Ct. 869, 84 L. Ed. 1108, 1114-1115 (1940), that "Like private individuals and businesses, the Government enjoys the unrestricted power to produce its own supplies, to determine those with whom it will deal, and to fix the terms and conditions upon which it will make needed purchases." The State need not resort to competitive bidding. (citing cases) And if the Legislature chooses to direct competitive bidding, it need not mandate an award to the "lowest" responsible bidder but rather may vest in its agent the discretion to accept the bid of "that responsible bidder whose bid, conforming to the invitation for bids, will be most advantageous to the State, price and other factors considered," as the statute provided in Commercial Cleaning Corp. v. Sullivan, 47 N.J. 539, 548 (1966).

[T]he purpose of a procurement program is not to advance the interest of those who want the State's business. On the contrary, the purpose is to serve the State's interest as purchaser.

That he [low bidder] has an interest of some character which will support a claim to be heard cannot be questioned. The point to be stressed is that the interest, whatever its dimensions is conferred upon him to the end that the public will obtain all that is due it in ...


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