On certification to the Superior Court, Appellate Division, whose opinion is reported at 346 N.J. Super. 58 (2001).
This is a public bidding case. On August 1, 2000, the Borough of Keyport (Keyport or Borough) solicited bids for the construction of a new municipal building complex. The bid advertisement provided that bidders had to comply with the requirements of The Public Works Contractor Registration Act (PWCRA), which became effective April 2000. The PWCRA, specifically §56.51, provides that "no contractor shall bid on or engage in any contract for public work ... unless the contractor is registered pursuant to this act." The definition of contractor includes any subcontractor or lower tier subcontractor of a contractor.
Seventeen bids were received, ranging from a bid price of $3,010,000 to $3,898,000. The following parties to this appeal submitted the following bids: A & K Excavating LLC (A&K) - $3,010,000; Maharaj Construction Inc. (Maharaj) - $3,082,000; and R.C.G. Construction Co., Inc. (RCG) -$3,127,000. RCG filed written objections with Keyport, alleging that it submitted the only fully compliant bid because, although A&K was registered under the PWCRA at the time it submitted its bid proposal, its steel subcontractor, Zagata, was not. RCG also claimed that A&K's failure to include its bid price in its corporate resolution was a material defect, and that Maharaj's bid was invalid because necessary information was not contained in its corporate resolution.
On December 19, 2000, Keyport awarded the contract to A&K. In its resolution, the Borough stated that: 1) the registration of subcontractors was not expressly required by the bid specifications and that, in fact, Zagata's registration certificate had been furnished by the Borough prior to its award of the contract to A&K; and 2) A&K's failure to include its bid price in its corporate resolution was a waivable, nonmaterial defect.
The trial court vacated the award of the contract to A&K, interpreting §56.51 of the PWCRA as requiring the contractor and all subcontractors who will work on the project to be registered before the contractor submits its bid proposal to the public entity. The court concluded that §56.51 was clear and unambiguous and that the definition of contractor includes subcontractor. Thus, as the subcontractor, Zagata, was not registered under the PWCRA prior to A&K's bid submission, the award to A&K must be vacated.
On appeal, the Appellate Division reversed and remanded to the trial court for an order reinstating the award of the Keyport contract to A&K. The Appellate Division concluded that under § 56.51, a subcontractor is required to register before it begins performing work on the project, not before the general contractor submits its bid proposal. The court reasoned that the Legislature intended and the legislative scheme demonstrates that "engage in" means "perform" work on the public work project. According to the Appellate Division, the trial court's interpretation of the phrase "engaged in" would lead to practical difficulties in the enforcement of the PWCRA, especially since contractors often do not know the identity of lower tier subcontractors at the time they submit a bid proposal. The court noted its confidence that interpreting §56.51 as requiring subcontractors to register before commencing performance on a public project will not compromise the underlying goals of the Legislature. Finally, the Appellate Division noted that safeguards are in place to assure that subcontractors have registered prior to beginning work on a public project.
The Appellate Division also found that the omission of the bid price in the corporate resolution was a waivable defect. Judge Coburn filed a concurring opinion addressing whether an award of a contract to an unregistered contractor must be vacated under the PWCRA.
HELD: Judgment of the Appellate Division is AFFIRMED for the reasons expressed in Judge Havey's opinion below.
Under §56.51 of the Public Works Contractor Registration Act, a subcontractor is required to register before it begins performing work on the project, not before the general contractor submits its bid proposal.
CHIEF JUSTICE PORITZ and JUSTICES COLEMAN, LONG, VERNIERO, LaVECCHIA, ZAZZALI and ALBIN join in this opinion.
The opinion of the court was delivered by: Per Curiam
(NOTE: This Court wrote no full opinion in this case. Rather, the Court's affirmance of the judgment of the Appellate Division is based substantially on the reasons expressed in Judge Havey's opinion below.)
The judgment is affirmed, substantially for the reasons expressed in Judge Havey's opinion of the Appellate Division, ...