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Warnock Ryan Leasing Inc. v. State

Decided: May 21, 1984.

WARNOCK RYAN LEASING, INC., WARNOCK RYAN DODGE, INC., CORPORATIONS OF THE STATE OF NEW JERSEY, AND DONALD W. WARNOCK, APPELLANTS,
v.
STATE OF NEW JERSEY, DEPARTMENT OF THE TREASURY, DIVISION OF PURCHASE AND PROPERTY, RICE AND HOLMAN FORD, INC. AND SEA BREEZE FORD, RESPONDENTS. SEA BREEZE FORD, APPELLANT, V. STATE OF NEW JERSEY, DEPARTMENT OF THE TREASURY, DIVISION OF PURCHASE AND PROPERTY, RICE AND HOLMAN FORD, INC., AND WARNOCK RYAN LEASING, INC., AND WARNOCK RYAN DODGE, INC., RESPONDENTS



On appeal from the Department of the Treasury, Division of Purchase and Property.

Ard, Morton I. Greenberg and Trautwein. The opinion of the court was delivered by Morton I. Greenberg, J.A.D.

Greenberg

On November 22, 1983, the State of New Jersey, through the Division of Purchase and Property, Department of the Treasury (Division), issued a request for proposals (RFP) for the purchase of several classes of law enforcement vehicles including the vehicles involved on this appeal, full-size pursuit and non-pursuit vehicles. The RFP requested bidders to give the price for vehicles to the State and its agencies, as well as to local governments. The local government price was requested so that the Division could extend the State contract to them pursuant to N.J.S.A. 52:25-16.1.

Appellants Sea Breeze Ford, Inc. and Warnock Ryan Leasing, Inc. as well as Rice and Holman Ford, Inc. submitted bids on the full-size cars. The Sea Breeze bids provided for fixed prices but allowed a 6% cash discount to the State if payment were made within 15 days. The cash discount term was not extended to the local governments. Rather Sea Breeze required them to pay C.O.D. Sea Breeze gave the lowest price to the State but because of the differential attributable to the discount Rice and Holman Ford was low on the local bid.

On December 21, 1983 Thomas P. Gallagher, assistant supervisor of the Division, issued an award recommending that Sea Breeze receive the contract for full-size pursuit vehicles. No recommendation for non-pursuit vehicles was made at that time. Based upon this recommendation the director of the Division on January 3, 1984 issued a notice awarding Sea Breeze the contract. This was intended to include both state and local purchases.

Subsequently the Division discovered that an error had been made in the contract award. Specifically the Division realized that Sea Breeze had excluded the cash discount for the local purchases so that Sea Breeze's bid was not the lowest for the local governments. Further the Division considered that the C.O.D. term for local government purchases was improper inasmuch as it precluded inspection before payment and was

unlawful under N.J.S.A. 40A:5-16 which requires municipalities to receive goods prior to payment.

Accordingly, on January 17, 1983, Gallagher recommended to the director that the award of January 4, 1984 be modified to eliminate the local government purchases from the Sea Breeze contract. He recommended, however, that Sea Breeze retain the award for state purchases for full-size pursuit vehicles. In addition he recommended that Sea Breeze be awarded the state contract for full-size non-pursuit vehicles. Finally he recommended that Rice and Holman be awarded the contract for the local purchases. Based upon these recommendations, the director issued new contract awards pursuant to which Sea Breeze retained the state contract for full-size vehicles and Rice and Holman received the local government award for full-size vehicles. Thus the awards were bifurcated.

Sea Breeze then filed a protest to this decision. A hearing on the protest was held on February 6, 1984, before Burton Weltman, assistant to the director of the Division. On February 24, 1984 Weltman issued a report and recommendations in which he found that the bifurcation of the award of full-size vehicles was permitted by law and was not in violation of established practices of the Division. Weltman also found that the C.O.D. clause in Sea Breeze's bid contradicted the inspection clauses of the RFP and thus was a major deviation from the terms of the RFP. He recommended adherence to the decision bifurcating the contract and canceling the local award to Sea Breeze. However Sea Breeze was to retain the contract for state vehicles.

Following the submission of exceptions, the director of the Division issued a final determination on March 12, 1984 affirming the hearing officer's recommendation, canceling the local award to Sea Breeze Ford, Inc. and affirming the award to Rice and Holman Ford, Inc. Sea Breeze retained the contract for the state vehicles.

Warnock Ryan filed a notice of appeal on March 22, 1984. It objects to the local award to Rice and Holman, contending that if the local contract is to be awarded it may only be given to the supplier on the state contract. Sea Breeze has separately appealed. It contends it should be awarded both the state and local contracts or it should be allowed to withdraw its entire bid. The State contends that none of the appellants has standing to appeal and in any event it ...


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