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Baylinson v. Board of Com'rs of Housing Authority of City of Atlantic City

February 24, 1995


Winkelstein, J.s.c.

The opinion of the court was delivered by: Winkelstein


Plaintiff, an attorney, has filed a complaint in lieu of prerogative writ against defendant, a Public Housing Authority (the Authority), created by the City of Atlantic City pursuant to N.J.S.A. 55:14A-1 to -58. *fn1

In 1994, the Authority sought proposals for legal services. Plaintiff submitted a proposal but was not awarded the contract. Instead, the Authority decided to readvertise and seek additional proposals. The case first came before the court on February 3, 1995, at which time plaintiff asked the court to enjoin the Authority from awarding a contract to anyone else pending a decision as to whether plaintiff should have been awarded the contract based on his original proposal. For purposes not related to the issue now before the court, the request for injunctive relief was denied. At oral argument, however, it was brought to the court's attention that the Authority's new specifications included a proposed contract term of two years. Plaintiff objected to the two year term arguing that it is contrary to N.J.S.A. 40A:11-15 which provides that a contract for professional services may not exceed twelve consecutive months. *fn2 Defendant argues that since federal regulations governing housing authorities, and the Authority's contract with the U.S. Department of Housing and Urban Development (HUD) do not limit professional service contracts to one year, the Authority is permitted to engage an attorney for a two year term.

In procuring contracts, the Authority is governed by the procurement procedures established in the Code of Federal Regulations.

Procurement standards. (1) Grantees and subgrantees will use their own procurement procedures which reflect applicable State and local laws and regulations, provided that the procurements conform to applicable Federal law and the standards identified in this section.

[24 C.F.R. § 85.36(b).]

The Local Public Contracts Law, N.J.S.A. 40A:11-1 to -49, provides that all contracts for the performance of work or services must be advertised for and awarded to the lowest responsible bidder. N.J.S.A. 40A:11-4 to -5 lists exceptions. Among the exceptions is a contract for "professional services." N.J.S.A. 40A:11-5(1)(a)(i). Professional services are defined as:

Services rendered or performed by a person authorized by law to practice a recognized profession, whose practice is regulated by law, and the performance of which services requires knowledge of an advanced type in a field of learning acquired by a prolonged formal course of specialized instruction and study as distinguished from general academic instruction or apprenticeship and training. Professional services may also mean services rendered in the performance of work that is original and creative in character in a recognized field of artistic endeavor.

[N.J.S.A. 40A:11-2(6).]

The essence of a professional service is that it involves "specialized knowledge, labor or skills and the labor or skill is predominately mental or intellectual, rather than physical or manual." Atlantic Mut. Ins. Co. v. Continental Nat'l Amer. Ins. Co., 123 N.J. Super. 241, 246, 302 A.2d 177 (Law Div. 1973). Whether such services be medical, legal or otherwise, professional services are not to be secured by public bidding because there is something inherent in the process which would nullify or detract from the professional quality of the services being sought. Capasso v. Pucillo, 132 N.J. Super. 542, 334 A.2d 370 (Ch. & Law Divs.), aff'd, 132 N.J. Super. 473, 334 A.2d 334 (App. Div. 1974). Contracts for legal services are included as professional service contracts, and public bidding is not necessary. Id. at 550.

All contracts, whether procured by bid or otherwise, are limited in term to twelve consecutive months unless otherwise stated. N.J.S.A. 40A:11-15. No exception to the twelve month restriction exists for professional legal services.

The sole issue to be determined therefore is whether the state statute which limits the term of the contract to one year is preempted by federal regulations or public policy as expressed in the contract between the Authority and HUD. This is a case of first impression. *fn3

The preemption doctrine, rooted in the second clause of Article IV of the United States Constitution, requires that when the mandates of federal law and state law are not consistent, state law must yield. Feldman v. Lederle Lab., 125 N.J. 117, 133, 592 A.2d 1176 (1991). Federal ...

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