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Weidner v. Tully Environmental

October 12, 2004


On appeal from the Superior Court of New Jersey, Law Division, Bergen County, BER-L-757-03.

Before Judges Conley, Lisa and Winkelstein.

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


Argued September 22, 2004

In this public contract action, defendant Tully Environmental, Inc. appeals from an April 8, 2003 summary judgment that in part (1) denied Tully's motion to dismiss the amended complaint for failure to state a claim, and (2) granted plaintiff Frank Weidner's cross-motion, voiding a December 27, 2002 agreement (the Agreement) between Tully and Bergen County for the redevelopment of Overpeck County Park. In the order memorializing his decision, Judge Jonathan Harris also issued a permanent injunction against any further performance under the Agreement. We affirm.

This case arises out of an interpretation of an amendment to the Local Public Contracts Law, N.J.S.A. 40A:11-1 to -50, known as the Competitive Contract in Lieu of Public Bidding statute, N.J.S.A. 40A:11-4.1 to -4.5, enacted in January 2000 and effective ninety days later. This legislation provides public entities with an alternative method to solicit proposals for public projects. The amendment contemplates awarding contracts on the basis of an evaluation of the"technical, management, and cost-related criteria,... all developed in a way that is intended to meet the specific needs of the contracting unit...," N.J.S.A. 40A:11-4.4b, to allow a municipality to make"a finding that a specific proposal is the most advantageous, price and other factors considered...." N.J.A.C. 5:34-4.3(d). Under this amendment, the governmental entity is no longer obligated to award the contract to the lowest responsible bidder. See N.J.S.A. 40A:11-4.1 to -4.4.

In this case, on October 28, 2002, Bergen County published a request for proposals (RFP) to develop Overpeck Park, a former landfill. Because the RFP contemplated that a contractor would charge fees for the placement of fill materials at the park, the project would be a positive revenue source without cost to the County. The RFP also indicated that"proposers are free to (but not encouraged [to])... make modifications to the contract documents...," with"all such modifications [to be] made at the risk of the proposal's rejection." The criteria for evaluating proposals, set forth in the RFP at § 1.2, said:

[A] proposer's inability or refusal to strictly adhere to a particular element will result in a score that reflects both the materiality of the element as well as the degree to which the proposal varies from requirements of the RFP. Each proposal, to the extent that it varies from the terms of the RFP, will be evaluated on the basis of whether it maintains the essential and material elements of the County's desired business and risk posture as embodied in the Agreement and Technical Specifications. The technical specifications called for five million cubic yards of fill material to fill and grade the park. The fill material was"at a minimum, [to] meet the NJDEP Non-Residential Direct Contact Soil Cleanup Criteria." The specifications also provide that the"[f]ill material delivered to the site shall be rejected if the material does not satisfy the requirements of the Approved Fill Material Acceptance Protocol."

Although about a dozen contractors attended a prebid meeting, Tully was the only contractor to submit a proposal. In its proposal, Tully made two changes to the contract documents. First, Tully proposed an alternative acceptance criteria (AAC) protocol which called for fill materials at levels"moderately above the Non-Residential Direct Contact Soil Cleanup Criteria" called for in the specifications. That AAC protocol had been previously approved by the New Jersey Department of Environmental Protection (NJDEP) in connection with other projects. This revised protocol would, as did the protocol called for in the RFP, require NJDEP and County approval.

Second, Tully added a provision, referred to as an"economic unfeasibility provision," that read:

If, as the Project progresses, market conditions for the receipt of Fill Material change so that the Fill Material Revenue falls to a point that the Project is no longer economically viable the Contractor and Owner shall negotiate the remainder of the Project so that the revenue and the cost associated with the completion of the Project is economically achievable. Accordingly, if, due to unforeseen circumstances, conditions change through no fault of the Contractor, that render the Contract economically infeasible, then the Contractor may petition the County for consent to cancel the Contract which consent will not be unreasonably withheld.

Upon receipt of Tully's proposal, in accordance with the procedure established in the Competitive Contract amendment, the County created an evaluation committee to review and evaluate Tully's proposal. The committee gave it a score of 96 out of a possible 100. The committee "unanimously conclude[d] that the execution of the Redevelopment Agreement with Tully Environmental, Inc., cost and other factors considered, is in the best interest of the citizens of Bergen County...." Based on the recommendation of the committee, on December 18, 2002, the County adopted a resolution awarding the project to Tully. The Agreement was executed on December 27, 2002.

Plaintiff, as a citizen and taxpayer, filed this action challenging the contract award. He contends that the proposal submitted by Tully materially deviated from the terms of the RFP, giving Tully an unfair advantage over other potential bidders. Plaintiff subsequently filed an amended complaint and order to show cause seeking an order to restrain Tully and the County from proceeding with the project and find Tully's proposal nonconforming and void. Although Bergen County had initially accepted the project and was named as a defendant, the County joined with plaintiff and asked that the court void the Agreement.

In response to the order to show cause, Tully filed a motion to dismiss the amended complaint and a motion to disqualify the County's attorney.*fn1 Without objection, the Law Division converted both motions into cross-motions for summary judgment and rendered an extensive oral decision denying Tully's motion, and granting summary judgment in favor of plaintiff, finding the Agreement between Tully and the County to be null and void; the judge enjoined ...

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