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Sempre Construction Co. v. Township of Mount Laurel

Decided: June 18, 1984.

SEMPRE CONSTRUCTION CO., INC., PLAINTIFF,
v.
TOWNSHIP OF MOUNT LAUREL AND CACON, INC., DEFENDANTS



Wells, J.s.c.

Wells

This is an action to vacate the award of a contract for a municipal construction project involving excavation work. The action is by one of ten unsuccessful bidders against the Township of Mount Laurel ["Township"] and the apparent low bidder. Pending decision herein the Township agreed to stay commencement of the work.

The disputed bids were actually the second round received on the project, the first bids having all been rejected for a perceived ambiguity in the invitation to bid. The new invitation to bid requested bids on base work and eight 2,000 cubic yard alternates. The first round required unit price bids on the alternates while the second round asked for lump sum bids on each alternate. The Township reserved the right to make the award "on the base bid, or base did plus alternates. . . ."

Both Sempre Construction Co., Inc. and Cacon, Inc. submitted bids on each round. Sempre's initial bid was $222,798 for base work and $240,000 ($15 per cubic yard) for the eight alternates, totalling $462,798. Cacon's initial bid was $249,644 for base work and $128,000 ($8 per cubic yard) for the eight alternates, totalling $377,644. The parties' respective bids would have placed them 13th and 6th respectively among the 15 bidders. On the second round plaintiff Sempre submitted a new base bid of $233,240 ($10,422 over its first base bid) and $25,300 for the alternates ($214,700 under its prior alternate bid), totalling $258,540 or $240,258 lower than its original total bid.

Cacon submitted a new base bid of $251,644 ($2,000 over first base bid) and $64 for the alternates ($127,936 under its prior alternate bid), totalling $251,708 or $125,936 lower than its total original bid.

The bids were reviewed by Mt. Laurel's consultant, Kinsey Associates. The consultant noted that Cacon and one other bidder, Versatile Concrete Corp., had submitted "exceedingly low" bids for alternates. Versatile indicated that it "misread" the alternative and had submitted a per cubic yard price by mistake and might request to be released. Since Versatile was clearly out of the running however, no further action was taken. When similarly questioned, defendant Cacon indicated that it fully understood the bid and had intended to submit an $8 per 2,000 cubic yard alternate bid for each of the eight alternates. The consultant advised the Township that this bidding strategy was not unprecedented and meant that the contractor wanted "all of the work or none of it." The Township then resolved to award the contract to Cacon whose base bid plus alternates was $6,832 lower than plaintiff's, the next lowest bid.

The action was commenced in the Chancery Division on a verified complaint and order to show cause without restraints. R. 4:67-1. Since the action seeks to overturn municipal action the more appropriate forum is the Law Division by way of action in lieu of prerogative writs. R. 4:69-1 et seq. Restraints, if necessary, may be sought there. R. 4:69-3. McKenna v. N.J. Highway Auth., 19 N.J. 270 (1955). Most, if not all, the cases involving disputes over bidding on public contracts have been brought in the Law Division. See George Harms Constr. Co. v. Bor. of Lincoln Pk., 161 N.J. Super. 367 (Law Div.1978), and the cases cited therein. Accordingly, the matter will be transferred to the Law Division and will be decided on the merits under the standards applicable to an action in lieu of prerogative writs. R. 4:3-1(b).

Plaintiff claims that Cacon, the low bidder, wrote itself an option to be relieved from its bid by bidding a lump sum $8 for each of the eight alternates, a total of $64. Plaintiff points to defendant's $8 per cubic yard bid on the first round and contends that Cacon, had it wished to do so, upon assessing its bid after the bid opening, could have prevailed either on the Township or the Chancery Division to relieve it of its bid on the ground of unilateral mistake. Such an option, according to plaintiff, given to one bidder creates an unfair advantage which impugns the fundamental integrity of the bidding process since one bidder may not be bound by its bid.

There is support for plaintiff's basic contention that practices which affect the public bidding process adversely are prohibited and awards made or contracts entered into where unlawful or prohibited practices may have played a part will be set aside; even though there was no corruption or any actual adverse effect on the bidding process. See Waste Disposal, Inc., v. Mayor and Council of Borough of Roselle Park, 145 N.J. Super. 217 (App.Div.1976). Plaintiff also correctly points to cases wherein it was held that municipalities may not waive material bid requirements where doing so places the erring bidder in an advantageous position by giving such bidder the option to rescind his bid or conduct negotiations after the bid has been awarded. See George Harms Constr. Co., v. Bor. of Lincoln Pk., 161 N.J. Super. 367 (Law Div.1978); Cubic Western Data v. New Jersey Turnpike Authority, 468 F. Supp. 59 (D.C.N.J.1978). In George Harms, supra, the low bidder failed to supply a statutorily mandated stockholder disclosure statement prior to the opening of bids. The Court found such statement to be an essential and material part of the contract which could not be waived or cured by subsequent submission. In Cubic Western, supra, the United States District Court held that a statutorily mandated letter of surety was similarly a non-waivable essential and material part of the contract incapable of subsequent cure. In each case the Court expressed concern that one bidder should not be placed in an advantageous

position relative to the other bidders and that once a bid is accepted it should not be ...


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