In view of the fact that we have determined that Cubic Western enjoys a reasonable likelihood of success on the merits of this case by reason of S.C.I."s failure to submit a Letter of Surety with its bid, we need not address the plaintiff's other contentions; first, that S.C.I. failed to submit a certificate that it was authorized to do business in New Jersey and, second, that its bid was "obviously unbalanced". We do note, however, that the failure to submit a "transacting business" certificate was not a material condition and was, therefore, waivable; and, further, that the plaintiff's contention that the S.C.I. bid was "obviously unbalanced" was not proven.
2. Irreparable Injury
I am satisfied that the irreparable injury which Cubic Western would suffer in the absence of an injunction is self-evident. The Authority has clearly indicated its intention to award the contract to S.C.I. should the instant litigation be resolved in the Authority's favor. See Letter from Olarsch to King dated October 6, 1978, Plaintiff's Exhibit No. 5. The economic gain which Cubic Western would derive from being the successful bidder would be lost. We recognize that under the facts of this case this loss of potential profit may be fairly ascertained and that, accordingly, Cubic Western may have an adequate legal remedy. However, Cubic Western would also lose the opportunity to enhance its reputation in the computer systems field, as well as be deprived of a means of improving its job performance should we deny its application. Injury in these two forms cannot be easily compensated for in money damages.
Conversely, the Authority will not be irreparably harmed by the granting of this part of plaintiff's claim for injunctive relief. While the Authority would stand to make a potentially substantial savings should it be allowed to award the contract to S.C.I., we would not be forever preventing the Authority from doing so.
3. Potential Harm to Third Parties
S.C.I. is a third party whose interests will obviously be affected by our decision, as it has bid for this project with the expectation that it may realize a financial profit from being named the low bidder and performing the work. However, since we have also determined here that the Authority should not be enjoined from readvertising the contract, we assume that the Authority will proceed with its plan to conduct re-bidding. Thus, S.C.I. will have an opportunity to submit a second bid if it so desires. We also emphasize that by granting this phase of the request for relief we are not requiring the Authority to award the project to another bidder. Thus, were we to issue an injunction, S.C.I. would not necessarily be denied an opportunity to improve its reputation in the field or be deprived of a chance to perfect its job operation, whereas these adversities would befall Cubic Western should the injunction be denied.
4. The Public Interest
We also believe that Cubic Western has demonstrated that the public interest would best be served by enjoining the Authority from awarding the contract to S.C.I. First, by permitting the waiver of the Letter of Surety requirement we would be encouraging inefficiency by bidders. We would be allowing them to disregard the clearly-stated terms of public contract bidding instructions when the very cornerstone of the system is uniform compliance with such requirements.
Inefficiency within the public entity itself would also result as the municipality or other body would delay its decision on the award of the bid until the conditions which it deemed to be waivable had been complied with. Such delays could become lengthy, especially when there is a defect in the security. In these cases, the public body must depend upon the promptness with which the bonding company, a party over which it has no control, can complete its action.
Moreover, permitting this waiver would be detrimental to the public interest in that it would discourage competent bidders from submitting proposals. There would be engendered in the public contracting community a feeling that the effort of submitting a faultless proposal may not be worth the potential benefits of being selected the low bidder, since a bidder who has failed to comply with an obviously material condition may nonetheless be awarded the contract. Every bidder is entitled to have assurances that the public body is requiring that the bidder's competitors supply the same documents in the same time frame.
The general citizenry is also entitled to a guarantee that public contracts are being awarded on the basis of full compliance with the bidding guidelines. Public confidence in this system would be eroded if entities were allowed to subjectively determine that the deadline for submitting the required security could be extended for certain bidders.
We recognize that the purely economic interests of the public
would benefit most by allowing the Authority to award the contract to S.C.I., since its bid was approximately $ 1,264,619 less than the nearest competitor, Cubic Western. However, as we have stressed throughout this opinion, bidding statutes are based upon strong public policy, and we do not believe that cases such as this can be decided by simple dollar comparisons. See Hillside Twsp., supra, 25 N.J. at 327, 136 A.2d 265; But see Marvec Allstate Inc., supra, 148 N.J.Super. at 492, 372 A.2d 1156. After careful consideration, we conclude that this potential economic benefit does not outweigh the tangible adverse impact which a waiver of this type has on the competitive bidding system.
We have discussed each of the four factors to be considered in passing upon the application for injunctive relief since no one aspect will necessarily determine the outcome. Constructors Assn. of Western Pennsylvania, supra, 573 F.2d at 815. Having balanced all of these elements, we conclude that the Authority must be preliminarily enjoined from awarding the contract to S.C.I.
B. Enjoining the Authority from Readvertising for Bids for the Contract
The second part of Cubic Western's application seeks to have the Authority enjoined from seeking new bids for the contract. Cubic Western contends that since one of the original bidders submitted a proposal which complied with all the bidding specifications the Authority must award the contract to it, and that the Authority is powerless to set aside the original bidding by allowing the project to be readvertised. It appears that Cubic Western was the only bidder which both fully complied with the bidding instructions and submitted a proposal for an amount less than the Authority Engineer's estimate. Thus, by enjoining the Authority from rejecting any lawful bids, we would, in effect, be requiring the Authority to award the contract to Cubic Western.
1. Reasonable Probability of Success on the Merits
Cubic Western maintains that the Authority failed to reserve for itself the right to reject all bids, and that, even if the Authority is deemed to have the inherent power to reject, that it did not exercise this right in good faith.
It cannot be disputed that the Authority may specifically reserve the right to reject any and all bids submitted on a contract even though the statute governing its bidding procedures, N.J.S.A. 27:23-6.1, does not expressly grant it this right. See M. A. Stephen Const. Co. v. Bor. of Rumson, 117 N.J.Super. 431, 436-37, 285 A.2d 55 (App.Div.1971). Moreover, we believe that the Authority did make such a specific reservation. Section 1.08(j) of the bidding instructions states:
In addition, Proposals may be rejected:
(j) if it is deemed advisable to do so in the best interest of the Authority.
This provision was not meant to cover only those bids which, on an individual basis, should be rejected. If that were the case, the provision would have read: "In addition a Proposal may be rejected . . ." The use of the term "Proposals" requires that we conclude that All of the bids could be rejected if the Authority deemed it advisable.
Even if the Authority had not made this reservation, the law in New Jersey clearly states that a public body such as the Authority has the inherent power to reject all bids under proper circumstances. Cardell, Inc. v. Twsp. of Woodbridge, 115 N.J.Super. 442, 450, 280 A.2d 203 (App.Div.1971), Cert. denied 60 N.J. 236, 287 A.2d 733 (1972). As the court noted in that case:
No . . . governing body could effectively engage in competitive bidding without such power. At the very least, the existence of the possibility of total rejection of bids serves as a strong inducement to bidders to keep their bids as low as circumstances permit.