This action in lieu of prerogative writs involves a novel issue arising out of the interpretation of Section 13 of the Local Public Contracts Law, N.J.S.A. 40A:11-1 to -48, and its application to alleged "lock out" or "sole source" bidding specifications.
Plaintiff, Utilimatic, Inc. ("Utilimatic"), filed a suit against defendant Brick Township Municipal Utilities Authority ("BTMUA" or "Authority") and a second action against defendant Lakewood Township Municipal Utilities Authority*fn1 ("LTMUA" or "Authority"), and defendant Water Specialties, Inc. ("Water Specialties") alleging in both cases a failure to award a contract for water meters to Utilimatic as the "lowest responsive bidder." The matters were consolidated by court order dated March 20, 1992.
Both the BTMUA and the LTMUA advertised for bids for the purchase of water meters. Each Authority received three bids. Utilimatic, bidding Kent brand meters, was the lowest bidder in each instance. However, each Authority rejected Utilimatic's bid as nonresponsive and awarded the contract to the second lowest bidder, Water Specialties, which bid the Sensus SR-I brand
The BTMUA cited three reasons for rejecting the Utilimatic bid. It was alleged that Utilimatic did not satisfy the specifications concerning the "register," the "magnetic coupling," and the "measuring chamber." The LTMUA also cited the first two reasons but not the third in rejecting Utilimatic's bid. The two specifications which the BTMUA and the LTMUA relied upon in finding Utilimatic was nonresponsive contained identical language in each bid notice:
A) Register: "All reduction gearing and the generator shall be contained in a permanently hermetically sealed, tamperproof enclosure made from a corrosion resistant material and shall be secured to the upper main case by means of a locking device located in the interior of the meter so the register cannot be removed externally (emphasis added)."
B) Magnetic Coupling: "The motion of the piston shall be transmitted to the sealed register through the use of a direct magnetic drive without any intermediate magnetic coupling (emphasis added)."
The third deficiency, cited only by the BTMUA, involved the measuring chamber and was described in its specifications in part as:
"C) Measuring Chamber: 'The chamber's division plate shall be stainless steel with a bonded rubber coating ' (emphasis added)."
The principal issue raised by this challenge is whether the defendants' specifications are valid or, conversely, whether the defendants advertised for a "brand name" in the guise of "lock out" or "sole source" specifications. The resolution of these questions turns on the application of N.J.S.A. 40A:11-13, specifically subsections (a) and (d), and the second to last unlettered paragraph of the statute.
The opening paragraph of N.J.S.A. 40A:11-13 bespeaks a fundamental tenet underlying our bidding laws in that it requires bid specifications to be "drafted in a manner to encourage free, open
and competitive bidding." To ensure that goal is attained, the statute expressly prohibits ...