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Waste Disposal Inc. v. Mayor and Council of Borough of Roselle Park

Decided: November 23, 1976.

WASTE DISPOSAL, INC., AND GENE ANTONUCCI, PLAINTIFFS-APPELLANTS,
v.
MAYOR AND COUNCIL OF THE BOROUGH OF ROSELLE PARK, AND CUSTOM DISPOSAL SERVICE CORPORATION, DEFENDANTS-RESPONDENTS



Lynch, Milmed and Antell. The opinion of the court was delivered by Milmed, J.A.D.

Milmed

This appeal involves the propriety of an award of a contract for the furnishing of scavenger services to the Borough of Roselle Park under the applicable Local Public Contracts Law, N.J.S.A. 40A:11-1 et seq. By their complaint in lieu of prerogative writs, plaintiffs challenged the borough resolution awarding the contract to defendant Custom Disposal Service Corporation and sought to have that resolution and award set aside. After hearing, the trial judge denied plaintiffs' motion for summary judgment and dismissed the complaint.

On this appeal plaintiffs contend that the bidding procedures utilized by the borough "were vague, uncertain, conflicting and in violation of Law." We agree. Certain of the provisions of the published notice for bids were clearly not in harmony with either the letter or the spirit of the applicable statute. Thus, N.J.S.A. 40A:11-21 provides, in pertinent part, that

There may be required from any person bidding on any contract or agreement, advertised in accordance with law, that the bid be accompanied by a guarantee payable to the contracting unit that if the contract or agreement is awarded to him he will enter into a contract therefor and will furnish any performance bond or other security required as a guarantee or indemnification. The guarantee shall be in the amount of 10% of the bid, but not in excess of $20,000.00, except as otherwise provided herein, and may be given,

at the option of the bidder, by certified check, cashier's check or bid bond. * * * [Emphasis supplied]

Here, however, the advertised notice for bids mandated that

A certified check for 10% of the bid must accompany each bid as a guaranty that the bidder will enter into the contract and furnish acceptable bond if his bid is accepted.*fn1

In light of the more expansive and optional provisions of N.J.S.A. 40A:11-21, above quoted, it is apparent that the notice requirements for a certified check for 10% of the bid could only have had, as counsel for appellants suggest, "a chilling effect upon potential bidders, inhibiting rather than encouraging competitive bidding."*fn2

Beyond this, we are in full accord with the observation made by counsel for appellants that:

By adopting a prequalification procedure without providing prospective bidders with the requisite period of time to prepare for the bidding, the Borough unnecessarily discouraged full, free and open competition, and thereby violated the provisions of the Local Public Contracts Law.

The notice for bids permitted bids to be submitted until 8:30 P.M. on November 13, ...


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