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Tec Elec., Inc. v. Franklin Lakes Bd. of Educ.

June 19, 1995


Stark, J. S. C.

The opinion of the court was delivered by: Stark



The issue before the court is whether the failure of the lowest bidder to include a Prequalification Affidavit is a nonconformity requiring bid rejection pursuant to the Public School Contracts Law, N.J.S.A. 18A:18A-32.

On May 12, 1995, defendant Franklin Lakes Board of Education (Board of Education) opened bids for a project known as "Additions and Alterations at Franklin Avenue Middle School." Among the bidders for Contract No. 5-Electrical work were plaintiff, Tec Electric Incorporated (Tec), and defendant, Redmann Electric Company (Redmann). Tec was the lowest bidder, submitting a base bid of $834,490, and Redmann was the second lowest bidder with a base bid of $879,499.

One of the bid specifications was the submission of a one page document entitled Prequalification Affidavit. However, the ten items on the bidder checklist prepared by the Board of Education for enclosure with the bid proposal did not include the required Prequalification Affidavit. Item three on the checklist called for "Proof of N.J. DBC Pre-qualification (form DBC 701 -- amount of uncompleted contracts; and Form DBC Notice of Classification)." Tec's bid included both the DBC Form 701 and Notice of Classification but failed to include the Prequalification Affidavit.

On May 25, 1995, the Board of Education awarded the contract to Redmann, having disqualified Tec for failing to submit a Prequalification Affidavit. Tec was not offered an opportunity to cure that deficiency. *fn1 That Tec's bid in any other way failed to meet the specifications is not suggested.

On June 5, 1995, Tec commenced this action against both the Board of Education and Redmann to declare the Board of Education's contract with Redmann void.

Analysis of the Public Schools Contracts Law, N.J.S.A. 18A:18A-1 to 59, is required to determine whether the failure to comply with the mandatory language of N.J.S.A. 18A:18A-32 can be cured after bids have been opened.

Courts have consistently held in the context of Public Contracts Law, N.J.S.A. 40A:11-1 to 49, that the purpose of the competitive-bidding process is to secure the most economical result in the expenditure of public moneys by promoting uninhibited competition and guarding against "favoritism, improvidence, extravagance and corruption." Township of Hillside v. Sternin, 25 N.J. 317, 322, 136 A.2d 265 (1957); see also L. Pucillo & Sons, Inc. v. Mayor of New Milford, 73 N.J. 349, 356, 375 A.2d 602 (1977); Terminal Constr. Corp. v. Atlantic County Sewerage Auth., 67 N.J. 403, 410, 341 A.2d 327 (1975). Those goals are also intended to be achieved through the Public Schools Contracts Law. F.S.D. Industries, Inc. v. Board of Educ., 166 N.J. Super. 330, 334, 399 A.2d 1021 (App. Div. 1979).

Accordingly, the statutes authorizing competitive bidding demand that publicly advertised contracts be awarded to the "lowest responsible bidder." N.J.S.A. 40A:11-6.1; N.J.S.A. 18A:18A-18. Our Supreme Court, in its most recent pronouncement on public bidding, reiterated that the statute contemplates that the contract be awarded to the lowest bidder that "complies with the substantive and procedural requirements in the bid advertisements and specifications." Meadowbrook Carting Co. v. Island Heights Borough, 138 N.J. 307, 313, 650 A.2d 748 (1994) (citing Hillside, supra, 25 N.J. at 324).

While strict compliance with public-bidding guidelines is required, the Supreme Court has recognized that competitive-bidding provisions should be construed and administered in a manner so as not to thwart the primary purpose of achieving economy. As such, immaterial deficiencies in bids can be waived. Meadowbrook, supra, 138 N.J. at 314-15. In fact, Judge Pressler has suggested that "where the irregularity is not substantial, it may well be the duty as well as the right of the municipality to waive it." Township of River Vale v. R.J. Longo Constr. Co., 127 N.J. Super. 207, 222, 316 A.2d 737 (Law Div. 1974). There the issue was whether the type of security deposit required in the specifications, a certified check, was substantially the same as a bid bond supplied by the contractor. Id. at 212. The court determined that there was no discernible difference when each was analyzed in light of the bidding statute purposes. Id. at 218-21.

The two-part test to determine materiality announced in River Vale which was endorsed in Meadowbrook, supra, 138 N.J. at 315, requires the following determination:

First, whether the effect of a waiver would be to deprive the municipality of its assurance that the contract will be entered into, performed and guaranteed according to its specified requirements, and second, whether it is of such a nature that its waiver would adversely affect competitive bidding by placing a bidder in a position of advantage ...

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