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Advance Electric Co., Inc. v. Montgomery Township Board of Education

May 21, 2002


On appeal from the Superior Court of New Jersey, Law Division, Somerset County, L-354-01.

Before Judges Kestin, Steinberg and Alley.

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


Submitted April 15, 2002

Plaintiff, Advance Electric Company, Inc. (Advance), appeals from the denial of its application seeking to restrain the Montgomery Township Board of Education (Board) from awarding a contract to BML Productions, Inc. (BML), a contractor that intended to use one of Advance's competitors as the electrical subcontractor to replace and install stage lighting at the Montgomery Township High School theater. Under N.J.S.A. 18A:18A- 18(b), a public school board may award a contract to a prime contractor, who may then subcontract specific portions of the job only to a qualified subcontractor. Advance argues that no regulations exist under which subcontractors for public school contracts may be qualified, and that the portion of the statute under which the bid was awarded is consequently invalid.

The State contends that because the work under the subject contract has already been completed, this appeal is moot. Alternatively, the State and the Board assert that because regulations promulgated by the Department of Treasury contain standards for the qualification of subcontractors, we should affirm the trial court's determination that the statute upon which the contract was bid is valid. We consider this matter on the merits and affirm.


In 2000, the Board issued a request for proposal (RFP) seeking bids for the replacement and installation of stage lighting and a dimming control system for the Montgomery Township High School. The RFP required that the bidding contractor provide the names of all subcontractors to whom work would be subcontracted, "each of which shall be qualified and shall provide proof thereof with the bid." On December 18, 2000, the contract was awarded to BML Productions, Inc. Advance, which also bid on the contract, protested that award, claiming that BML was not certified or licensed as an electrical contractor.

The matter was transmitted to the Office of Administrative Law (OAL) for hearing, and on January 8, 2001, Administrative Law Judge Robert S. Miller issued an order staying the award of the contract. Further hearings were to be scheduled. On January 29, 2001, the State Board of Education affirmed Judge Miller's stay and remanded for further hearings. Before those hearings could commence, however, the Board canceled the contract to BML and re- bid the project.

A new RFP was then prepared to solicit bids for the project. BML again submitted a bid, this time using Electric Wire as its electrical subcontractor. Although Advance claims that Electric Wire was not in compliance with the registration requirements of the "Public Works Contractor Registration Act," N.J.S.A. 34:11- 56.48 to -56.57, the Board submitted correspondence in connection with this appeal indicating that Electric Wire was duly registered.

Advance then filed a complaint in Superior Court alleging that no qualification standards for electrical subcontractors had been adopted as required by the Public School Contracts Law, N.J.S.A. 18A:18A-1 to -59 (the Act), and that no local board of education could solicit bids from contractors for all of the work on a particular project, which work would then be subcontracted out. According to Advance, the Board's only recourse at this point would be to re-bid the contract seeking separate bids for each portion of work to be done under the contract. Advance sought temporary restraints against the award to BML. It also sought a ruling that the Board's bid solicitation was illegal and that the contract must be re-bid.

Judge Rosemarie R. Williams denied Advance's application, declining to exercise jurisdiction in light of the hearing still pending before the OAL. A week later, Judge Miller issued an order noting that the only issue before him was the award of the contract to BML in late 2000, that he was not confronted with the issue raised by Advance in its complaint, and that in his view nothing prevented the Superior Court from accepting jurisdiction over the issues raised in Advance's complaint.

After the Board announced plans to award a contract on April 23, 2001, Advance asked it to refrain from doing so until Judge Williams had issued a ruling on its complaint. Advance also filed an emergent application with the Appellate Division seeking a stay of any contract the Board might award. We denied the application in our order of April 20, 2001, stating that Advance had made "[n]o showing of a reasonable probability of ultimate success on the merits[,]" and citing Crowe v. DeGioia, 90 N.J. 126, 133 (1982). Moreover, the Board rejected Advance's call for a delay in awarding the contract and instead awarded it to BML.

In Judge Williams' decision, which she issued in May 2001, she described the procedural history and facts relevant to the dispute and noted the four-part test created by Crowe v. DeGioia, supra, to determine whether injunctive relief would be warranted. She also pointed to the heavy burden on Advance to demonstrate the Act's invalidity.

Judge Williams determined that under N.J.S.A. 18A:18A-27, the Department "may" adopt regulations, but does not require that it do so. She concluded that Advance's argument that regulations had to be adopted before the Act could be implemented thus was without merit. She further observed that the Department of Treasury had adopted regulations regarding the classification of all contractors who bid for state contracts, which "addressed the quality of work, the experience, performance record, etc. Although this classification is a method to qualify contractors, there is nothing to support the proposition that the Legislature anticipated a different methodology for qualifying subcontractors."

The court concluded that Advance had not

demonstrated that N.J.S.A. 18A:18A-18(b) is inoperable for three reasons. First, [Advance] has not rebutted the presumption of the statute's validity by presenting clear and convincing proofs demonstrating otherwise. Second, the express language of N.J.S.A. 18A:18A-27 provides that the State Treasurer may enact regulations and does not require that the promulgation of such regulations be mandatory. Finally, the State has already adopted qualification methodology for contractors and there is no evidence to support the proposition that a subcontractor would [be] qualified in a different manner. Since ...

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