For reversal -- Chief Justice Hughes, Justices Mountain, Sullivan, Pashman, Clifford and Schreiber and Judge Conford. For affirmance -- None. The opinion of the court was delivered by Pashman, J.
This appeal concerns the validity of a municipality's waiver of certain deviations from its bidding specifications in awarding a garbage scavengers contract. Defendant Borough of New Milford (Borough) originally requested bidders to submit proposals for contracts of one, two, three and five years' duration. Defendant Angelo Pacio, trading as Pacio Sanitation (Pacio), entered bids on the first three proposed contracts, but failed to submit a proposal for the five-year contract. Plaintiff L. Pucillo & Sons, Inc. (Pucillo) and a third competitor bid on all alternatives. The Borough decided to enter into a three-year contract with Pacio, and agreed to waive any nonconformance with the bidding instructions caused by his omission of a five-year bid. Pucillo then brought this action challenging Pacio's status as the "lowest responsible bidder" under N.J.S.A. 40A:11-6.1a. The Law Division and the Appellate Division upheld the award and Pacio began work as scheduled on January 1, 1976. We subsequently granted certification, 70 N.J. 151 (1976), and now reverse.
Plaintiff concedes that Pacio submitted the low bid on the three-year contract,*fn1 but argues that Pacio was not the lowest "responsible" bidder because he failed to comply with the Borough's specifications. See Hillside v. Sternin, 25 N.J. 317, 324 (1957). Accordingly, plaintiff maintains that
this deviation from the bidding instructions disqualified Pacio from being awarded all contracts, including those for which he submitted estimates. Plaintiff offers two reasons for rejecting defendants' contention that the Borough could legally reserve the prerogative to waive noncompliance with the requirement to bid on all alternatives: (1) other potential bidders may have been willing to submit estimates if they had known that they would not have been held to the requirement of bidding on all contracts and (2) the actual bidders' costs and risks were greater than Pacio's and placed them at a competitive disadvantage.
The lower courts rejected these arguments. The Law Division judge interpreted the language in the specifications as permissive, thus disputing plaintiff's assumption that the Borough had made bids on all proposals mandatory. Since Pacio was eliminated from consideration from the five-year contract, for which he did not bid, the court held that the requisite "equal footing" among bidders had been maintained on all options. Stressing that the Borough's decision to award the three-year contract was most economical for the municipality, the trial judge found that its waiver was technical in nature and served the public interest. In an unreported decision, the Appellate Division affirmed for substantially the same reasons, adding only that the irregularity "did not afford [Pacio] any competitive advantage over the other bidders and did not tend to stifle competition."
The critical question in this case is whether the portion of the bidding specifications which directed garbage scavengers to submit proposals on all options was mandatory or permissive.*fn2 Since there is no dispute concerning the facts of
this case, resolution of this issue turns on the meaning of the language utilized in the specifications.
The Borough initially advertised for bids on September 4, 1975, and announced that sealed bids, prepared in accordance with its specifications and bid proposal forms, would be received on September 17, 1975. Its public notice to garbage scavengers also contained the following statement:
The Mayor and Council reserves [sic] the right to waive any informalities and the right to reject any and all bids to the best interest of the Borough of New Milford.
Interested bidders received four bid proposal forms, for one, two, three and five-year contracts;*fn3 a questionnaire concerning their financial ability and experience in performing public work; and detailed specifications for completion and submission of the required documents. Among the provisions of the bidding specifications were these warnings:
Bidders are cautioned not to attach any conditions, limitations, provisos or restrictions to any proposal, or to make any changes or erasures on the proposal blank, as such conditions, limitations, erasures or provisos may render the bid informal and cause its rejection.
Bidders are cautioned also that all proposals must be bid upon. Failure to indicate a bid may render the bid ...