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October 2, 1979

PASSAVANT CORPORATION, the Hyman and Fannie Besser Foundation, and Albert G. Besser, as Executor of the Estate of Hyman Besser, Plaintiffs,
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY, REGION II, Eckardt C. Beck, Regional Administrator, Passaic Valley Sewerage Commission, Courter & Company, and Performance Systems, Inc., Defendants

The opinion of the court was delivered by: BIUNNO

Passaic Valley Sewerage Commission (PSVC) is an agency of the State of New Jersey, performing public functions, Brickett v. Lagay, 134 N.J.L. 1, 45 A.2d 804 (E. & A., 1946). The District was created by N.J.P.L. 1902, c. 48, and the applicable statutes are found in N.J.S.A. 58:14-1, et seq. Its territorial boundaries encompass those parts of Essex, Passaic, Bergen and Hudson counties described by metes and bounds in N.J.S.A. 58:14-1 and 1.1, and its general purpose is to relieve the streams and rivers in the District from pollution. By P.L.1953, c. 388, now found in N.J.S.A. 58:14-34.10 et seq. a legislative finding was made of an imperative need to repair, replace and improve the sewerage system, including particularly immediate enlargement and betterment of the sewage treatment and disposal works.

The present dispute deals with the type of specifications employed by PVSC to advertise for bids on a sludge dewatering plant, under Contract 500A. As the court understands it, the dewatering of sludge is one of the last processes of the various stages of sewage treatment, and is intended to separate solids from liquid effluent so that the solids may be disposed of other than by dumping sludge in the ocean, a method which Congress has declared may not be used after December 31, 1981.

 The dewatering process evidently follows the heat treatment stage, which was involved in CCTW & M v. EPA, 452 F.Supp. 69 (D.N.J.1978) and BSP v. EPA, 471 F.Supp. 958 (D.N.J.1979).

 The entire treatment plant project, of which the heat-treatment and dewatering stages are a part, is evidently the subject of a grant under 33 U.S.C. § 1281, et seq., under which the Federal share is 75%, 33 U.S.C. § 1282(a)(1), the grants being administered by the Environmental Protection Agency (EPA).

 Plaintiff Passavant is a manufacturer of high pressure filter presses for the dewatering of sludge. Passavant did not submit a bid, nor did any contractor submit a bid contemplating the use of Passavant's equipment.

 Instead, after having received the bid documents on December 12, 1978 (Adm.Rec., Tab 3, p. 22), Passavant wrote PVSC on December 19, 1978 claiming that insufficient time had been allowed to submit bids (Idem., p. 21). Then, on February 2, 1979, Passavant wrote the Consulting Engineers, with copy to PVSC and EPA, requesting a change of specifications and asking a reply by February 9, 1979 (Idem., Tab 2, item 5), and on February 9, 1979 wrote a bid protest directed to the specifications to PVSC (Idem., Tab 2, item 6). Since February 9 was a Friday and Monday, February 12 was a holiday, the bid protest was received by PVSC on February 13, 1979 (Idem., Tab 3, p. 10, Consent Exhibit 1).

 On February 15, 1979, PVSC wrote Passavant to acknowledge the protest and set a hearing date for February 27, 1979 (Idem., Tab 2, item 7), a date which was changed to March 13, 1979 by letter of February 23, 1979 (Idem., Tab 2, item 8).

 In the bid protest letter and at the hearing, Passavant objected to the use of "performance" specifications under which bids could be submitted with the use of 6 different makes of filter presses: two each of the high pressure, low pressure and diaphragm type, employing not less than 5 or more than 10 units (Idem., Tab 3, p. 40, p. 41, pp. 85-86, pp. 106-107). It objected to the requirement that each bidder provide dimensions for the building (to be let under Contract 500B) to house the equipment (Idem., Tab 3, pp. 59-61; pp. 108-115), to the use of a test run when the equipment was installed and the performance bond to assure that the process would function as designed (Idem., Tab 3, pp. 61-67).

 Other objections made, such that the performance bond required would increase the bid price by the face amount of the bond, and would amount to charging operating and maintenance costs to capital or construction costs, are collateral.

 In any event, after the hearing before PVSC on March 13, 1979, a Report and Recommendation by the Hearing Officer was made (Idem., Tab 2, item 2) accompanied by an engineering report (Idem., Tab 2, item 3) and a legal opinion (Idem., Tab 2, item 4), these being dated March 14, 1979. Under date of March 16, 1979, Passavant submitted a request for review of the determination of PVSC rejecting the protest (Idem., Tab 2, item 1).

 The Memorandum of Authorities submitted to PVSC was sent to EPA with Passavant's letter of March 22, 1979 (Idem., Tab 4). EPA's Regional Counsel wrote PVSC on March 26, 1979 (Idem., Tab 5) that further procurement action be deferred until final resolution by EPA, inviting further written submissions by April 6th, and scheduling a conference for April 10th. An extension of the submission deadline is reflected by Passavant's letter of March 30th to PVSC (Idem., Tab 6), and Passavant's further submission and letter of transmittal was made April 7th (Idem., Tab 7). A list of those who appeared at the conference of April 10th is found at Tab 8, and the Regional Administrator's determination rejecting the protest and authorizing approval of the award of the contract to the low bidder was issued April 13th (Idem., Tab 9).

 The complaint here was filed May 4, 1979 on behalf of Passavant and two parties (hereafter "Besser") claiming to own vacant land within the District. Aside from introductory matter, the complaint criticizes the "performance" method of specification (Part II), the allowance of 3 different generic types of dewatering systems (Part III), the use of "average pressure" as a component for calculating the theoretical capacity of the dewatering system (Part IV), the performance guarantee (Part V), and the alleged use of federal grant funds for "operation and maintenance costs" (Part VI).

 The remedies sought are: (A) declaring the EPA decision to be unlawful and setting it aside; (B) preliminary and permanent injunction against PVSC from awarding the contract or, if already granted, setting it aside; (C) preliminary and injunctive relief against PVSC from promulgating or adhering to the specifications and requiring it to change them in such fashion as the Court finds fair and proper; (D) enjoining the low bidder and its supplier of equipment from commencing work on the project, and (E) other and further relief.

 On the same day, an order to show cause was entered ex parte directing defendants to show cause why EPA should not be directed to serve and file ...

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