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George Harms Construction Co. v. Borough of Lincoln Park

Decided: July 6, 1978.

GEORGE HARMS CONSTRUCTION COMPANY, INC., PLAINTIFF,
v.
BOROUGH OF LINCOLN PARK, A MUNICIPAL CORPORATION OF THE STATE OF NEW JERSEY, AND D'ANNUNZIO -- FIRESIDE UTILITY CONTRACTORS CORPORATION AND DISTRICT ASSOCIATES, INC., A JOINT VENTURE, DEFENDANTS



MacKenzie, J.c.c. (temporarily assigned).

Mackenzie

The matter comes on for expedited resolution on the return date of an order to show cause with temporary restraints issued following the filing of a complaint in lieu of prerogative writs. Both defendants have answered. Defendant D'Annunzio -- Fireside Utility Contractors Corporation and District Associates, Inc., a joint venture (hereinafter D'Annunzio), has cross-claimed and counterclaimed. Filed affidavits disclose no contested issue of material fact. The matter may be treated with consent of all counsel as though cross-motions for summary judgment were before the court. R. 4:46.

On May 12, 1978, at about 10 A.M., the Borough of Lincoln Park (borough) received bids for the performance of certain construction work on a $6,000,000 project known and designated as Contract No. 3, Borough of Lincoln Park, Sanitary Sewerage Collection System, which involved the construction of a substantial portion of its sanitary sewerage collection system. Upon the opening and tabulation of the bids it was discovered that the apparent low bidder, D'Annunzio, failed to provide a list of stockholders as required by N.J.S.A. 52:25-24.2. The bid solicitation prepared by

the borough contained specific reference to the statute.*fn1 The apparent second low bidder, George Harms Construction Company, Inc. (hereinafter "Harms") noted this irregularity and voiced its objection and sought to have the apparent low bidder disqualified. Shortly thereafter, D'Annunzio submitted a document to the Borough which purported to satisfy the requirements of N.J.S.A. 52:25-24.2. The difference between the bids of D'Annunzio and Harms is approximately $200,000.

Upon receipt of Harms' objection and challenge to the award of the contract to D'Annunzio, the Borough promptly scheduled a hearing on June 5, 1978, at which time the attorneys for both bidders were given an opportunity to address the governing body on the question of the challenge to the qualification of the apparent low bidder. The governing body of the Borough considered the challenge and on June 12, 1978, unanimously passed a resolution rejecting the challenge by Harms on the strength of its conclusion that the municipality had the authority to waive the non-compliance of D'Annunzio.

On June 23, 1978 the court entered an order restraining the borough from undertaking any actions whatsoever with respect to the execution, signing or award of the subject contract, pending the return date of the plaintiff's order to

show cause. Resolution of the case turns on the meaning of N.J.S.A. 52:25-24.2.

In essence, N.J.S.A. 52:25-24.2 (L. 1977, c. 33) requires corporate or partnership bidders on state, county, municipal or school district contracts to submit, prior to or accompanying the bid, a list of all stockholders or partners owning 10% or more of stock or interest in the firm. It provides in pertinent part that

No corporation or partnership shall be awarded any contract * * * for the performance of any work * * * the cost of which is to be paid with or out of any public funds by the State, or any county, municipality * * * unless prior to the receipt of the bid or accompanying the bid , of said corporation or said partnership, there is submitted a statement setting forth the names and addresses of all stockholders in the corporation or partnership who own 10% or more of its stock. * * * If one or more such stockholder or partner is itself a corporation or partnership, the stockholders holding 10% or more of that corporations stock, or the individual partners owning 10% or greater interest in the partnership, as the case may be, shall also be listed. The disclosure shall be continued until names and addresses of every noncorporate stockholder, and individual partner, exceeding the 10% ownership criteria established in this act, has been listed. [Emphasis supplied]

For reasons hereafter stated, the statute must be given its plain meaning.*fn2 The key operative words are "no" and "shall".*fn3 In this ...


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