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Clyde N. Lattimer & Son Construction Co., Inc. v. Township of Monroe Utilities Authority

June 22, 2004

CLYDE N. LATTIMER & SON CONSTRUCTION COMPANY, INC., A CORPORATION OF THE STATE OF NEW JERSEY, PLAINTIFF-APPELLANT,
v.
TOWNSHIP OF MONROE UTILITIES AUTHORITY, A BODY POLITIC OF THE STATE OF NEW JERSEY, DEFENDANT-RESPONDENT, AND MUNICIPAL MAINTENANCE COMPANY, INC., A CORPORATION OF THE STATE OF NEW JERSEY, DEFENDANT.



On appeal from the Superior Court of New Jersey, Law Division, Middlesex County, L-6406-03.

Before Judges Newman, Parrillo and Hoens.

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

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

Argued: June 1, 2004

Plaintiff Clyde N. Lattimer & Sons Construction Company appeals from the order dismissing its complaint challenging the award by defendant Township of Monroe Utilities Authority (MUA) of a municipal contract for repairs to a pump station to defendant Municipal Maintenance Company, Inc. (MMC), the lowest responsible bidder. Plaintiff contends that MMC's bid should have been rejected because MMC failed to obtain a pre-bid price quote from its named electrical subcontractor David Hamilton Electrical Contracting in violation of N.J.S.A. 40A:11-16 of the Local Public Contracts Law. Because neither the language of nor the legislative history to N.J.S.A. 40A:11-16 requires that a single named electrical work subcontractor submit a pre-bid price quote to the contractor, we are satisfied that the bid was properly awarded to MMC and affirm.

The relevant facts are not in dispute. Some time in summer 2003, MUA invited public bids for a repair project to a pump station owned by the Township. MMC submitted the low bid for the project in the amount of $972,000.00. Plaintiff was the second lowest bidder at $1,048,000.00. In a letter to the MUA dated August 12, 2003, plaintiff challenged MMC's bid, pointing out that MMC failed to obtain a price quote from its listed electrical subcontractor in violation of the Local Public Contracts Law, N.J.S.A. 40A:11-1 to -50. Instead, MMC estimated the cost for Hamilton to perform the electrical work. MMC and Hamilton have an extended history of working together, and maintain an"arrangement" whereby MMC will use Hamilton for the electrical work on most of its projects.

On August 27, 2003, plaintiff filed a complaint in lieu of prerogative writs seeking to enjoin the award of the contract to MMC and declaring plaintiff as the lowest bidder. On September 11, 2003, the trial court issued an Order to Show Cause with Temporary Restraints. Following argument on September 30, 2003, the trial court issued an order on October 10, 2003 dissolving the temporary restraints, and dismissing both the Order to Show Cause and plaintiff's complaint with prejudice. The trial court reasoned that the requirement sought by plaintiff, that a named subcontractor had to provide a price quote to the contractor prior to bidding, was not expressed in N.J.S.A. 40A:11-16. From the MUA's perspective, it received the lowest price and was protected by the bidder's surety bond in the event there was a dispute between the bidder and subcontractor after the award of the contract. Plaintiff's effort to secure a stay of the trial court's order was unsuccessful both before the trial court and this court.

On appeal, plaintiff contends that awarding a contract to a contractor who did not receive a pre-bid price quote from a named subcontractor violates both the letter and spirit of N.J.S.A. 40A:11-16.

N.J.S.A. 40A:11-16, commonly referred to as the Anti-Bid Shopping Law, provides in relevant part:

The contracting agent shall advertise for and receive, in the manner provided by law, either (a) separate bids for each of said branches of work, or (b) bids for all the work goods and services required to complete the building to be included in a single overall contract, or (c) both. In the case of a single bid under (b) or (c), there shall be set forth in the bid the name or names of all subcontractors to whom the bidder will subcontract the furnishing of... electrical work... each of which subcontractors shall be qualified in accordance with P.L. 1971, c. 198 (C.40A:11- 1 et seq.).

From its enactment in 1971, N.J.S.A. 40A:11-16 required the names of subcontractors to be set forth in all bids. Prismatic Dev. Corp. v. Somerset County Bd. of Chosen Freeholders, 236 N.J. Super. 158, 163 (App. Div. 1989), overruled on other grounds by Meadowbrook Carting Co., Inc. v. Borough of Island Heights, 138 N.J. 307, 320 (1994). In 1987, the Legislature passed Senate Bill No. 1029, which would have amended N.J.S.A. 40A:11-16 to permit bidders to submit the names of subcontractors after the opening of bids but prior to the award of the contract, as an alternative to requiring bidders to submit all subcontractor names at the time they submit their bids. See Governor's Reconsideration and Recommendation Statement to Senate Bill No. 1029 L. 1987, c. 48.

The bill was conditionally vetoed by then Governor Thomas Kean. In his Reconsideration and Recommendation Statement, Governor Kean had this to say:

Current law requires that general contractors bidding on local public construction contracts set forth the name or names of all subcontractors at the time of bid submission. The statute contemplates subcontracts for the furnishing of plumbing and gas fitting, steam power plants, steam and hot water heating and ventilating apparatus, electrical work, and structural steel and ornamental iron work.

I am not convinced that changing this system of bidding to permit subcontractors to be named at a later time would be in the public interest. If a general contractor could wait to name subcontractors until after he has submitted his bid to the local unit of government, then the local unit of government would be unlikely to benefit from any bid shopping undertaken by the general contractor in securing the performance of subcontractors. The purpose of public bidding is to secure performance of high quality for the lowest possible price, and I believe that this objective is furthered by retention of the current statutory scheme whereby subcontractors must be named by general ...


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