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Hall Const. Co., Inc. v. New Jersey Sports & Exposition Authority

December 16, 1996


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

Approved for Publication December 16, 1996. As Corrected December 23, 1996.

Before Judges Skillman, A.a. Rodriguez and Cuff. The opinion of this court was delivered by Cuff, J.A.D.

The opinion of the court was delivered by: Cuff

The opinion of this court was delivered by


This appeal concerns the award of a contract by the New Jersey Sports and Exposition Authority (Sports Authority) for the general construction work to construct luxury spectator suites at Giants Stadium. Prismatic Development Corp. (Prismatic), the purported low bidder, appeals from an order entered by Judge Ciolino which declared its bid materially defective and invalid. Pending the outcome of this appeal, the Sports Authority has tentatively awarded the contract to the next low bidder Hall Construction Co. (Hall). We affirm.

In 1995, the Sports Authority decided to construct luxury suites at Giants Stadium for sale to spectators. When the Sports Authority sought bids for the work, it divided the project into five contracts: (1) foundation; (2) structural steel; (3) general construction; (4) elevators; and (5) sports field lighting. The Sports Authority decided to construct the suites in two segments: north-side and south-side of the Stadium, and tentatively decided to proceed only with the south-side suites at this time. In the belief that it might achieve some cost-savings if the foundations for the north-side suites were installed at the same time as the south-side suites, the Sports Authority requested the bidders on the foundation contract and the general construction contract to submit a bid for preliminary work associated with the north-side suites. It is Prismatic's response to this alternate in its bid for the general construction contract which is at issue in this case.

The Sports Authority solicited bids for general construction for the south-side suites in June 1996. Each bidder was requested to provide a lump sum bid. Each bidder was also directed to provide prices for three alternates: landscaping--north-side only (Alternate No. 1), lightning protection (Alternate No. 2), and architectural signage (Alternate No. 3).

The Authority received four bids for the general construction contract. By the time the bids were tabulated, the Sports Authority had decided to defer installation of the foundation for the north-side luxury suites which eliminated the need for Alternate 1. It also had decided to proceed with Alternates 2 and 3.

Cynthia Lorelli, Director of Purchasing for the Sports Authority, reviewed the bids for the general construction contract and prepared a bid tabulation sheet indicating the base bid, the bid for each alternate and the total price of the base bid plus the Alternates 2 and 3. Prismatic's bid contained a lump sum figure for the Base Bid, Alternate 2 and Alternate 3; Prismatic left the space next to Alternate 1 blank. On the tabulation sheet for the Prismatic bid, Lorelli recorded "No Bid" for Alternate 1. To determine the lowest bidder, the Sports Authority tabulated the bids for the base work and Alternates 2 and 3. Based on this calculation, the Sports Authority determined that Prismatic was the lowest bidder. Hall filed a protest with the Sports Authority. It argued that Prismatic's bid should not be considered because it failed to include a bid for Alternate 1. The Sports Authority rejected the protest concluding that the failure to supply an amount for Alternate 1 was not a material defect. In a certification filed with the trial court, it stated its reasoning as follows:

Since the Authority was not proceeding with the foundation on the north side and, therefore, the bid for Alternate 1 would not be a factor, [it] agreed that it was nonmaterial and waived the defect to the extent one existed.

Hall, the next lowest bidder on the base bid, with a bid of $22,407,000, filed a verified complaint and order to show cause to enjoin the Sports Authority from awarding the contract to Prismatic and to declare the Prismatic bid materially defective. In an oral opinion, Judge Ciolino found that Prismatic's bid was materially deficient because of "failure to submit the appropriate price...." The matter was remanded to the Sports Authority to award the contract to one of the remaining bidders. Hall has been awarded the contract, subject to the Disposition of this appeal.

Prismatic argues that the bid it submitted was responsive because it complied with the technical requirements of the bid specifications. Prismatic also urges that the Sports Authority decision to accept its bid and to reject Hall's protest is entitled to a presumption of validity. Hall disagrees, arguing that the Sports Authority does not have broad discretionary authority to determine whether a bid is materially defective.

The New Jersey Sports and Exposition Authority Law, N.J.S.A. 5:10-1 through -38, specifically N.J.S.A. 5:10-21.1.a, governs the award of this contract. ...

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