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426 Bloomfield Avenue Corp. v. City of Newark

Decided: February 23, 1993.

426 BLOOMFIELD AVENUE CORPORATION T/A C & J TOWING SERVICE, PLAINTIFF-APPELLANT,
v.
CITY OF NEWARK, DEFENDANT-RESPONDENT, AND METROPOLITAN TOWING, J.V. AND K & K TOWING, INC., INTERVENING DEFENDANTS-RESPONDENTS



On appeal from Superior Court of New Jersey, Law Division, Essex County.

Michels, Bilder and Baime. The opinion of the court was delivered by Baime, J.A.D.

Baime

[262 NJSuper Page 385] The City of Newark contracts with private entities for the provision of vehicle towing and storage services. In 1991, the City adopted a resolution creating five towing districts and mandating that no single vendor be awarded more than one district contract. The effect of the restriction is to eliminate from consideration the lowest responsible bid with respect to

four of the five towing districts. We hold that the one district limitation discourages free, open and competitive bidding and subverts the objectives of the Local Public Contracts Law (N.J.S.A. 40A:11-1 through -49).

I.

The facts are not in dispute. Until recently, the City was divided into four towing districts corresponding with the geographical boundaries of its police precincts. Towing contracts were awarded for each district to the lowest responsible bidder. Bidding specifications did not prohibit a single bidder from being awarded the contract for more than one towing district.

On December 18, 1991, the City adopted a resolution which created five towing districts that coincide with the boundaries of its political wards. In addition, the resolution barred a single vendor from being awarded the contract for more than one district. Although vendors "may bid on all five wards[,] no bidder may hold more than one contract." The one district per vendor restriction was said to promote competition by increasing the number of available towing contractors. However, its effect is to bar a successful bidder in one district from being awarded a contract for another district even if it has submitted the lowest responsible bid and has satisfied all other specification requirements.

Plaintiff, a New Jersey Corporation engaged in the business of providing vehicle towing and storage services, instituted this action challenging the one district limitation. Metropolitan Towing, J.V. and K & K Towing, Inc. intervened, and, along with the City, filed answers in which they asserted that the bid specification comported with all applicable statutes. Following argument, the Law Division dismissed plaintiff's complaint on the basis that the one district restriction was not arbitrary and capricious. This appeal followed.

II.

N.J.S.A. 40A:11-6.1 provides that "[a]ll purchases, contracts or agreements which require public advertisement for bids shall be awarded to the lowest responsible bidder." This section is supplemented by N.J.S.A. 40A:11-13 which states that "[a]ny specifications for an acquisition . . . shall be drafted in a manner to encourage free, open and competitive bidding." These statutes "are for the benefit of the taxpayers and are construed as nearly as possible with sole reference to the public good." Terminal Const. Corp. v. Atlantic Cty. Sewerage Auth., 67 N.J. 403, 409-10, 341 A.2d 327 (1975). Their purposes "are to guard against favoritism, improvidence, extravagance and corruption" and "their aim is to secure for the public the benefits of unfettered competition." Id. at 410, 341 A.2d 327. The object of public bidding is "not the protection of the individual interests of the bidders but rather the advancement of the public interest in securing the most economical result by inviting competition in which all bidders are placed on an equal basis . . . ." Tp. of River Vale v. R.J. Longo Const. Co., 127 N.J. Super. 207, 215, 316 A.2d 737 (Law Div.1974). Notwithstanding the deference we generally accord to the actions of municipal governments, see, e.g., Kramer v. Bd. of Adjust., Sea Girt, 45 N.J. 268, 296, 212 A.2d 153 (1965); Miller v. Passaic Valley Comm'n, 259 N.J. Super. 1, 15, 611 A.2d 128 (App.Div.1992); Agorganic v. Ocean County Utilities, 259 N.J. Super. 377, 388, 613 A.2d 511 (Law Div.1992), our "long-standing judicial policy" in construing these statutes "has been to curtail the discretion of local authorities by demanding strict compliance with public bidding guidelines." Pucillo v. Mayor and Council of Borough of New Milford, 73 N.J. 349, 356, 375 A.2d 602 (1977). See, e.g., Hillside Twp. v. Sternin, 25 N.J. 317, 325-326, 136 A.2d 265 (1957); A.C. Schultes & Sons v. Haddon Tp., 8 N.J. 103, 108, 83 A.2d 896 (1951); Waszen v. City of Atlantic City, 1 N.J. 272, 283, 63 A.2d 255 (1949); Palamar Const., Inc. v. Tp. of Pennsauken, 196 N.J. Super. 241, 257, 482 A.2d 174 (App.Div.1983); Stano v. Soldo Constr. Co., 187 N.J. Super. 524, 535,

455 A.2d 541 (App.Div.1983). As cogently expressed by Justice Francis in Hillside Twp. v. Sternin, "[i]n this field it is better to leave the door tightly closed than to permit it to be ajar, thus necessitating forevermore in such cases speculation as to whether or not ...


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