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Star of the Sea Concrete Corp. v. Lucas Brothers

June 17, 2004


On appeal from the Superior Court of New Jersey, Law Division, MiddleseX County, Docket No. L-1936-04.

Before Judges Stern, Lefelt and Payne.

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


Argued May 25, 2004

Middlesex County solicited bids for the improvement of a section of Ryders Lane in East Brunswick. Defendant Lucas Brothers, Inc. was awarded the contract as the low bidder, but upon a protest by Star of the Sea Concrete Corp., the second lowest bidder, Judge Longhi disqualified Lucas Brothers for failure to include with its bid a list of subcontractors. Failure to submit the list of subcontractors,"pursuant to Section 16 [N.J.S.A. 40A:11-16]," with a bid is"deemed a fatal defect" under N.J.S.A. 40A:11-23.2. The County and Lucas Brothers argue in this appeal, however, that because the list was not required by N.J.S.A. 40A:11-16, the omission was excusable. We disagree, and affirm Judge Longhi's decision to award the contract to the second lowest bidder, Star of the Sea.

The project for which Middlesex County solicited bids consisted of the widening and reconstruction of a portion of Ryders Lane, the installation of sidewalks, curbs, and drainage, together with modification of two traffic signals. The electrical work associated with modification of the traffic signals encompassed approximately ten percent of the cost of the overall project.

In connection with the bid solicitation, the County issued, pursuant to N.J.S.A. 40A:11-23.1, a"Bid Document Submission Checklist," which was divided into two sections, A and B. Section A of the checklist itemized five mandatory documents that the County requested with each bid. All of the five itemized documents contained a typed"x" in the box preceding the item under"owner's checkmarks," and the fourth requested"[a] listing of subcontractors as required by N.J.S.A. 40A:11- 16." The checklist specifically provided that failure to submit any itemized section A document"is a mandatory cause for the bid to be rejected." Section B of the checklist listed other documents the County required with each bid, and provided that failure to submit any of the section B documents"will be a cause for the bid to be rejected," pursuant to N.J.S.A. 40A:11- 23.1(b).*fn1 (emphasis added).

The County received fourteen bids, with the two lowest from Lucas Brothers ($2,310,928.58) and Star of the Sea ($2,358,792.66). Although Lucas Brothers' bid was over $47,000 less than Star of the Sea's, Star of the Sea's bid complied with all of the bid requirements. Lucas Brothers' bid, while indicating that it had included a list of subcontractors, failed to attach the promised document.

Star of the Sea filed a letter of protest with the Middlesex County Engineer's Office seeking to have Lucas Brothers' bid rejected for failing to comply with section A of the checklist. County Counsel rejected Star of the Sea's protest and indicated that he would recommend that the Board of Freeholders accept Lucas Brothers' bid as compliant with the bid specifications.

The Freeholders subsequently adopted a resolution awarding the contract to Lucas Brothers, and the next day Star of the Sea filed an order to show cause, with temporary restraints, and a verified complaint in lieu of prerogative writs, attempting to have the Freeholder's action reversed and Star of the Sea's bid recognized as the lowest bid complying fully with the bid solicitation.

The matter came before Judge Longhi who ruled that the listing of subcontractors was a mandatory, non-waivable requirement, and that therefore, Lucas Brothers' bid was non-responsive. Consequently, the judge directed that the project be awarded to Star of the Sea, and Lucas Brothers filed a timely notice of appeal. Judge Longhi stayed the contract award pending the outcome of the appeal, which we accelerated.

The Local Public Contracts Law, N.J.S.A. 40A:11-1 to -50, governs the advertising, bidding and contracting for the Ryders Lane project. The central issue in this dispute involves the meaning of N.J.S.A. 40A:11-23.2, which is part of the 1999 amendments to the Local Public Contracts Law. L. 1999, c. 39, § 2; N.J.S.A. 40A:11-21 to -23.2.

N.J.S.A. 40A:11-23.2 provides that"[w]hen required by the bid plans and specifications, the following requirements shall be considered mandatory items to be submitted at the time specified by the contracting unit for the receipt of the bids." The provision continues by warning that"the failure to submit any one of the [following five] mandatory items shall be deemed a fatal defect that shall render the bid proposal unresponsive and that cannot be cured by the governing body." N.J.S.A. 40A:11-23.2; See P & A Constr., Inc. v. Tp. of Woodbridge, 365 N.J. Super. 164, 175 (App. Div. 2004).

The first four of the five mandatory items included in N.J.S.A. 40A:11-23.2 are"[a] guarantee to accompany the bid pursuant to Section 21," a"certificate from a surety company pursuant to Section 22," a"statement of corporate ownership pursuant to Section 1," and the"listing of subcontractors pursuant to ...

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