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Township of Burlington v. Middle Department Inspection Agency Inc.

Decided: August 28, 1980.

TOWNSHIP OF BURLINGTON, A MUNICIPAL CORPORATION OF THE STATE OF NEW JERSEY, PLAINTIFF,
v.
MIDDLE DEPARTMENT INSPECTION AGENCY, INC., GARDEN STATE ELECTRIC INSPECTION SERVICE, INC., BUILDING INSPECTION UNDERWRITERS, INC., MIDDLE ATLANTIC ELECTRIC INSPECTION, INC. AND GENERAL INSPECTION SERVICES, INC., CORPORATIONS OF THE STATE OF NEW JERSEY, AND STATE OF NEW JERSEY, DEFENDANTS



Gottlieb, J.J.D.R.C. (temporarily assigned):

Gottlieb

This declaratory judgment action squarely presents the issue of whether a municipality which chooses to administer the State Uniform Construction Code by contracting with an approved agency for electrical subcode inspection and enforcement services is required to award such a contract by competitive public bidding. Plaintiff Township of Burlington submits that bidding is not required since the inspection services are either "professional services" or are "extraordinary unspecifiable services" ("EUS") under the Local Public Contracts Law, N.J.S.A. 40A:11-1 et seq.

Before reaching the merits of the issue, one procedural problem must be discussed. One of the stipulated facts is that the cost of the services will exceed $2,500. Since N.J.S.A. 40A:11-3 permits contracts to be entered into by a contracting unit without public advertising for bids when the cost does not exceed $4,500 in the fiscal year, it would seem that there may not exist a justiciable controversy so that this court ought not to act. In acting on causes asserted under the Uniform Declaratory Judgment Act, N.J.S.A. 2A:16-50 et seq. , the court must be mindful that the act "cannot be used to decide or declare rights or status of parties upon a state of facts which are future, contingent and uncertain." Lucky Calendar Co. v. Cohen , 36 N.J. Super. 300, 304 (Law Div. 1955), aff'd 20 N.J. 451, 454 (1956). In this case the court cannot be certain that the $4,500 has or will be reached during the fiscal year and, absent more, would

decline to render an advisory opinion. However, under N.J.S.A. 40A:11-6.1, contracts which do not meet the $4,500 threshold are not to be awarded until the contracting agent has solicited quotations, whenever practicable, where "the estimated cost or price of which is $500 or more" and the award is to be made "on the basis of the lowest responsible quotation received, which quotation is most advantageous to the contracting unit, price and other factors considered." This latter statute does, nevertheless, exempt contracts calling for "the performance of professional services."

It is clear, therefore, that since the $500 level has already been reached, the township is presented with a justiciable problem: to assert that the inspection services are "professional services" and relieved of the quotation requirements of N.J.S.A. 40A:11-6.1 or concede that inspection services do not qualify as "professional services" and subject them to the procedures mandated by N.J.S.A. 40A:11-6.1. In recognition of the determination that the Uniform Declaratory Judgment Act is "remedial in nature and entitled to liberal construction and administration," Union Cty. Freeholder Bd. v. Union Cty. Park Comm'n , 41 N.J. 333, 336 (1964), and, as such, is to be construed as "afford[ing] relief from uncertainty to a person's rights," N.J. Home Bldrs. Ass'n v. Civil Rights Div. , 81 N.J. Super. 243, 251 (Ch.Div.1963), this court will exercise its discretion and hear the matter. Passaic Valley Sewerage Comm'n v. Paterson , 113 N.J. Super. 148, 151 (App.Div.1971). "[T]he remedy [of a declaratory judgment] should not be denied lightly, and where a complaint discloses a justiciable controversy within the statute normally it ought to be entertained." Condenser Serv. & Engin. Co., Inc. v. American Mut. Liab. Ins. Co. , 45 N.J. Super. 31, 43 (App.Div.1957).

Under the State Uniform Construction Code Act, N.J.S.A. 52:27D-119 et seq. , municipalities are required to administer and enforce the Code. N.J.S.A. 52:27D-126. They can implement this function in one of three ways: (1) by employing a qualified construction official and subcode officials, N.J.S.A. 52:27D-126(a); (2) by using an approved inspection authority, N.J.S.A.

52:27D-126(a); or (3) by requesting that the Department of Community Affairs assume the task, N.J.S.A. 52:27D-128. Of course, there are many variations possible; since there are many subcodes constituting the Uniform Construction Code-the building, plumbing, electrical, energy, fire prevention, mobile home and mechanical subcodes, N.J.S.A. 52:27D-123(b)-a municipality may choose, for example, to employ qualified personnel to administer and enforce all of the subcodes except plumbing and electrical, and use an approved inspection authority for those two codes.

In Burlington Township's particular case it has determined that it would perform the administration and enforcement of the entire code by employees save for the electrical code. In regard to the electrical code, it has determined to contract with an approved inspection agency to administer and enforce that code. The township is also in receipt of certain rules promulgated by the Division of Local Government Services essentially providing that, as relevant, contracts with approved inspection agencies are not contracts for "professional services" or an EUS. As such, they are not exempt from the competitive public bidding process or the quotation process required under N.J.S.A. 40A:11-4 or 6.1. The Division of Local Government Services is directly empowered by N.J.S.A. 40A:11-5(1)(a)(ii) to adopt rules and regulations administering the implementation of EUS contracts by local units. Under the Local Fiscal Affairs Law, N.J.S.A. 40A:5-1 et seq. , the Division of Local Government Services receives and reviews the annual fiscal audit of a local unit, which audit is to report on and make recommendations concerning compliance by the local unit with applicable statutes and regulations. Nevertheless, the Division's rules pertaining to what qualifies as a "professional service" are not binding on a municipality. This was recognized by the Division itself when it issued its "Local Public Contract Guidelines and Local Public Contract Regulations" (1977), which indicates on the introductory page that the guidelines are "advisory" while the regulations are "mandatory."

The township is of the opinion that the contract for electrical subcode administration and enforcement by an approved inspection agency is not subject to competitive public bidding or, at least, quotation. Hence, this declaratory judgment action was instituted so that the township might have its rights and obligations judicially determined. See, N.J.S.A. 2A:16-53; Bergen Cty. v. Port of N.Y. Auth. , 32 N.J. 303, 307 (1960); and Registrar and Transfer Co. v. Division of Tax. Director , 166 N.J. Super. 75, 78 (App.Div.1979). The various defendants include the State of New Jersey and the approved electrical inspection authorities providing services in Burlington County. Both the township and the State have moved for summary judgment. All of the facts have been stipulated so the motions are ripe for decisions. R. 4:46-2.

The court must determine whether the inspection services to be performed by an approved authority are either "professional services" or EUS. If they are professional services, the contracts are not subject to competitive public bidding. However, if the court determines that they are properly characterized as being EUS, then their award would be subject to N.J.S.A. 40A:11-6.1. If they are neither, then their contracts must be awarded in compliance with the Local Public ...


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