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Riverland Construction Co. v. Lombardo Contracting Co.

Decided: November 21, 1977.


Halpern, Larner and King. The opinion of the court was delivered by Larner, J.A.D.


[154 NJSuper Page 43] This appeal arises out of a controversy relating to public bids for a sewer construction contract for a project planned by the Township of Bridgewater designated as "Charlotte Drive -- Edgewood Terrace Area Sanitary Sewers." On August 1, 1977, after appropriate advertising,

the township received ten competitive bids, with Lombardo Contracting Co. (Lombardo) submitting the lowest and Riverland Construction Company (Riverland) the second lowest. Since all other proposals were higher and since the two lowest bidders were concededly responsible and qualified, the issue for determination by the municipality and the trial court focused upon the validity of these bids and the appropriateness of the remedy in the event of rejection.

Lombardo's overall bid was $324,140.98, whereas Riverland's bid amounted to $331,414. These bids compared favorably with the estimate of the township engineer in the sum of $343,163. However, the municipality rejected the two lowest bids of Lombardo and Riverland on the ground that they were "unbalanced," relying upon a reservation in the specifications that proposals may be rejected if the prices are obviously unbalanced. The other bids were also rejected for a variety of reasons and a resolution was adopted August 15, 1977 calling for readvertising for new bids.

Thereupon Riverland instituted an action in lieu of prerogative writs seeking a declaration that it was the lowest responsible bidder and an order compelling the township to award it the contract. Lombardo filed an answer denying Riverland's claim to the contract as well as a cross-claim asserting invalidity of the resolution rejecting the bids and its right to the contract as the lowest responsible bidder. The municipality took the position that the rejection of all bids was legally warranted.

The matter was considered by the trial judge at a plenary hearing on September 20 and resulted in a judgment dated October 3 setting aside the resolution rejecting Riverland's bid, directing the township to award the contract to Riverland, affirming the rejection of Lombardo's bid on the basis that it is "sham, non-responsive and contrary to statute," and enjoining the municipality from readvertising for new bids.

Lombardo alone appeals from that judgment. After granting a stay of the judgment we accelerated the appellate process in order to accommodate the public interest in early completion of the project.

The issue before us focuses solely on one of 38 items in the proposal which sought a per cubic yard unit bid for select fill to cover the sewer pipe after installation. Since the exact amount of fill could not be ascertained in advance of the work, the township sought a unit price based on the engineer's estimate of a required quantity of 8,078 cubic yards.

Lombardo, in submitting its total bid, included the unit price of one cent per cubic yard for the select fill, while Riverland submitted a price of $1 a cubic yard. As extended, and based on the engineer's estimate, Lombardo's bid for this item was approximately $80, while Riverland's bid for the same item was approximately $8,000. The township engineer, on the other hand, estimated the reasonable cost for this item as $5 per cubic foot, or a total of approximately $40,000. Based on the advice of its engineer the township considered both bids for select fill so low as to be unbalanced. The trial judge agreed as to the Lombardo "penny" bid, but found that the $1 bid was not so nominal as to render it "unbalanced." It was on that basis that he proceeded to find the Lombardo bid invalid and the Riverland bid to be the lowest valid responsible bid.

We conclude that under the facts gleaned from this record the trial judge erred in its determination that the Lombardo bid was illegal.

In Stamato v. New Brunswick , 20 N.J. Super. 340 (App. Div. 1952), we held:

An unbalanced bid comprehends a bid based on nominal prices for some work and enhanced prices for other work. The mere fact that a bidder has submitted an unbalanced bid, does not automatically operate to invalidate an award of the contract to such bidder. There must be proof of collusion or of fraudulent conduct on the part of such bidder and the city or its engineer or other agent, or proof of other irregularity of such ...

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