This case involves a public contract for storm drainage improvements in the Township of Neptune, Monmouth County. The project is governed by the Local Public Contracts Law N.J.S.A. 40A:11-1 et seq. Two questions are presented. The first which has not heretofore been addressed by the courts of this State is whether the failure to execute the bid proposal constitutes a material defect of a bid. The second which has been a troublesome one for municipalities, is when may a municipality which has reserved the right to reject all bids do so after it has determined that the lowest numerical bid is unresponsive. I conclude that the failure to execute a bid proposal constitutes a material defect and cannot be waived. I further conclude that the plaintiffs, the second lowest numerical bidder is the lowest responsive bidder and should have been awarded the contract.
The facts are not in dispute. On December 19, 1991, the Township of Neptune, advertised pursuant to N.J.S.A. 40A:11-1 et seq. for bids on a public works project known as "Phase I, Heck Avenue Storm Drainage Improvements in the Township of Neptune, Monmouth County, New Jersey" with a bid opening date of January 9, 1992. The published notice contained the following statement usually found in such solicitations for public contracts:
"The Mayor and Committee reserve the right to reject any and all bids or to waive any and all informality of any bid".
On January 9, 1992, the bids were opened. North Brunswick Paving, Inc. (hereinafter referred to as North Brunswick) submitted the lowest bid in the sum of $287,763.03. The next lowest bid in the sum of $326,393.00 was submitted by AceManzo, Inc. and D. Manzo and Son, Inc. (hereinafter referred to as Manzo); however, North Brunswick failed to complete and execute Page four of the bid proposal form. Neptune Township (hereinafter referred to as Neptune) determined that the bid submitted by North Brunswick was nonresponsive and therefore unacceptable due to the bidder's failure to complete and execute Page four of the bid proposal form. However, instead of awarding the contract to Manzo as the next lowest responsive bidder, Neptune approved a resolution rejecting all bids submitted on January 9, 1992 and authorized the advertisement for new bids.
Neptune readvertised for bids on the project with a bid opening date of February 6, 1992. Prior to the opening of the bids on February 6, 1992, Manzo filed this action in lieu of prerogative writs for a restraining order and to compel Neptune to award the contract to it as the lowest responsive bidder.
On February 5, 1992 I restrained Neptune from opening the readvertised bids for the project pending a final hearing. North Brunswick now crossclaims against Neptune and counterclaims against Manzo challenging the rejection of its original bid by Neptune.
The notice to bidders required that bids be submitted on a standard proposal form. The proposal form is a four page document. It begins on Page one by stating that "the bidder declares that it has read the plans and specifications, and contract documents, has examined the site and has determined for himself the condition effecting the work and he proposes and agrees if any bid is accepted to provide at his own expense, all labor, insurance, superintendence machinery, plans, equipment, tools, apparatus, appliances and means of construction and all other materials and supplies, and to complete ready for
its intended purpose, the entire work and all parts thereof described as included under this Contract prior to completion date described under Article IX of Information to Bidders. . . (emphasis in original)." There are further representations, covenants and agreements contained in the Proposal Form which proceed unit price listings on Page two and Page three of the Proposal Form and culminate with the execution on Page four of the Proposal Form by the bidder. Page four which was not completed or executed by North Brunswick stated the following:
There is presented herewith:
A certified check, cashier's check, or bid bond in the amount of $___ payable to the order of the Township of Neptune, which the undersigned bidder agrees to forfeit as liquidated damages to the Owner, if written notice of the acceptance of this bid is mailed, telegraphed, or delivered to the undersigned bidder within sixty (60) days after the date of opening of the bids, or any time thereafter, before this bid is withdrawn and the undersigned fails to deliver executed contact and contract bond within two (2) weeks after the date of such mailing, telegraphing or delivering of such notice. The undersigned bidder hereby designates as his office to which such notice of acceptance may be mailed, telegraphed, or delivered:
The undersigned bidder is (an individual) (a partnership) (a corporation) under the law of the State of _____, having principal offices at _____.