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Sevell v. New Jersey Highway Authority

April 13, 2000


Before Judges Carchman, Lefelt and Lintner.

The opinion of the court was delivered by: Carchman, J.A.D.

Argued March 29, 2000

On appeal from Superior Court Law Division, Union County.

This appeal requires us to address whether a zero ($0) bid for towing, mileage, road service, tire change, fuel, oil and/or water call, battery boost, storage charges, winching or labor (collectively "the towing services") on a section of the Garden State Parkway is void per se as a matter of public policy. The affect of such bid is that the towing services would be provided to motorists free of charge. The Law Division held that such bid was proper. We agree and affirm.

This appeal is but another chapter in an ongoing dispute between plaintiff Norman Sevell, and defendants the New Jersey Highway Authority (the Authority) and N.E.R.I. Corp. t/a L & J Auto Body (NERI) regarding bidding for towing services on a portion of the Garden State Parkway (Parkway) identified as the Union County Zone (Mile Post 132.0 to 145.6). The background of the prior disputes and history of the selection process for towing services on the Parkway is set forth in N.E.R.I. Corp. v. New Jersey Hwy. Auth., 147 N.J. 223 (1996), where the Supreme Court held that towing services must be awarded in compliance with the applicable bidding statute, N.J.S.A. 27:12B-5.2, and Sevell's Auto Body v. New Jersey Hwy. Auth., 306 N.J. Super. 357 (App. Div. 1997), certif. denied, 153 N.J. 51 (1998), where plaintiff unsuccessfully challenging the bidding specifications established by the Authority.

Since the opening of the Parkway, plaintiff has continually been awarded the towing contract and provided towing services in the Union County Zone. *fn1 At the time competitive bidding was required as a result of the Court's decision in N.E.R.I., Sevell's charges for the towing services included a forty-five dollar charge for towing plus a mileage charge of $2.25 and a fifteen dollar charge for road service, tire change, fuel oil or water, battery boost and storage. These charges were within the limits established by the Authority, see N.J.A.C. 19:8-2.12, although towers were not precluded from charging less than the authorized amount.

The relevant provisions of the bidding specifications required the successful bidder to tow to its garage or the nearest exit. Alternative arrangements could be made with the vehicle owner in which case, the bid rates would not apply. If the vehicle was taken to the bidder's garage, the specifications required that any repair services provided must be authorized by the vehicle owner, in writing, and that "charges to the motorist for parts repairs, labor, and service for each vehicle . . . shall in no event exceed the rates covered in current edition 'Auto Repair' or 'Flat Rate and Parts' manuals or 'Chiltons' manuals." Additionally, the specifications set forth standards for the tower's response time and facilities and finally, obligated the successful bidder to pay an annual minimum contract fee to the Authority of $42,996 or five percent of the gross receipts of services rendered, whichever is greater.

When the bids were received, NERI submitted a bid reflecting a zero ($0) bid for the towing services. The next lowest bid was by MTS Tow Services, with a weighted bid of $15.15 and the third lowest bid was by plaintiff's corporation, with a weighted total of $28.18. (The Authority weighed each of the elements of the towing services provided to arrive at a weighted bid. No one challenges the weighing process.) The bid prices reflected, not a charge to the Authority, but a charge to the motoring public for the towing services provided by the bidder.

After the contract was awarded to NERI, plaintiff filed an action in the Law Division challenging NERI's zero bid. Plaintiff also challenged the timing of the award of the contract, and the trial judge concluded that the Authority did not violate N.J.A.C. 19:8-5.13(e) (requiring an extension of bids if an award is not made within forty-five calender days of bid opening); this issue is not implicated on this appeal.

Following preliminary discovery, the parties filed cross-motions and agreed that the issue could be decided as a matter of law. Judge Pisansky granted defendants' motions for summary judgment concluding that zero bids were not invalid as a matter of law, thereby upholding the bid award. This appeal followed.

On appeal, plaintiff reasserts that a "zero bid never was, is not and should never be a valid bid in the State of New Jersey." In asserting this claim, plaintiff again concedes that the issue is narrow and can be resolved as a matter of law, eschewing any suggestion that NERI is not a responsible bidder or that the Authority is incapable of administering the contract consistent with the specifications.

Our analysis of the issue raised requires a brief restatement of applicable principles of public bidding law. Public bidding statutes exist for the good of taxpayers, not bidders, and they must always be construed for the public good and to guard against "favoritism, improvidence, extravagance and corruption." N.E.R.I., supra, 147 N.J. at 235. The primary objective of these statutes is to achieve the honesty and integrity of the bidders and the bidding process. Sevell's, supra, 306 N.J. Super. at 363. Bidding statutes are designed to protect the public through "fair and open competitive bidding." Lord v. Municipal Util. Auth., 133 N.J. Super. 503, 506 (App. Div. 1975). "The purpose is to secure competition . . . they should be construed with sole reference to the public good; and they should be rigidly adhered to by the courts." Hillside Twp. v. Sternin, 25 N.J. 317, 322 (1957).

To achieve these purposes[,] all bidding practices which are capable of being used to further corrupt ends or which are likely to affect adversely the bidding process are prohibited, and all awards made or contracts entered into where any such practice may have played a part, will be set aside. This is so even though it is evident that in fact there was no corruption or any actual adverse effect upon the bidding process. [Terminal Const. Corp. v. Atlantic Cty. Sewerage Auth., 67 N.J. 403, 410 (1975).]

We have recognized the necessity of utilizing the bidding process to protect the public and have commented that "[a]ny stifling of competition undermines the policy of" open public bidding. Armaniaco v. Cresskill, 62 N.J. Super. 476, 481 (App. Div. 1960). This finding is consistent with the goal of open and competitive bidding, which is to protect the public; this includes providing the public with the lowest possible contract price, subject to sufficient quality controls. If there is no showing that the bidding procedure or the bid specifications undermine the principles of fair and competitive bidding, there is no reason to invalidate a winning bid. Riverland Const. Co. v. Lombardo Contracting, 154 N.J. Super. 42, 47 (App. Div. 1977), aff'd o.b., 76 N.J. ...

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