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Alaska Services, Inc. v. County of Morris

August 23, 2007


On appeal from the Superior Court of New Jersey, Law Division, Morris County, Docket No. L-1283-06.

Per curiam.


Argued May 1, 2007

Before Judges Graves and Lihotz.

The issue presented for consideration is whether a county contract to outsource laundry services must be awarded pursuant to the public bidding statute, N.J.S.A. 40A:11-4, or whether such a contract may be awarded subject to the competitive contracting provisions of N.J.S.A. 40A:11-4.1. Plaintiff Alaska Services, Inc., who submitted the lowest bid, appeals from the June 13, 2006 summary judgment in favor of defendants, and the dismissal of its action in lieu of prerogative writs, filed to challenge the competitive contract awarded to defendant Sodexho Operations, LLC. (Sodexho). Plaintiff, additionally appeals from the denial of its motion for reconsideration entered on August 16, 2006.

On February 2, 2006, defendant County of Morris (County) advertised in the Daily Record, its newspaper of record, that it was soliciting proposals for a laundry services provider for the Morris View Nursing Home (MVNH), a county-run long-term nursing care facility, with 315 skilled nursing beds (282 of which are filled), a thirty-bed assisted living unit, and a non-medical adult daycare center serving approximately fifty clients. The MVNH laundry facility operated a full-time service laundry department that collected, laundered, and delivered linen, residential clothing items, staff uniforms, and certain specialty items.

On March 10, 2006, James Abline, the County's purchasing agent, advised all bidders that a revision of the bidding qualifications required the process to begin anew. On March 14, 2006, an advertisement reflecting the revised qualifications was published in the Daily Record. Submissions were due by April 3, 2006.

The revised proposal required that seven items accompany each proposal, including a "Consent of Surety" and a "Corporate Disclosure Statement." The revised proposal also stated that "the County Purchasing Agent reserves the right to reject any or all bids and to waive immaterial formalities." No objections to the specifications were filed. N.J.S.A. 40A:11-13. Only plaintiff, Sodexho, and Healthcare Services Group, Inc. provided submissions. On April 3, 2006, the County informed plaintiff that its proposal was rejected for failure to meet bid specifications. Specifically, the County found plaintiff's submission lacked verifiable references and did not provide for a full-time manager during required laundry operations. Plaintiff was also deemed insufficiently experienced to operate a laundry service at a facility as large as MVNH. Sodexho was awarded the contract.

As a result, on May 9, 2006, plaintiff filed a verified complaint and order to show cause (OTSC) for a temporary restraining order, barring the award of the contract to Sodexho.*fn2 Argument was heard on May 10, and the court scheduled a hearing for June 12, 2006. Plaintiff's requests for a temporary restraining order and expedited discovery were denied by the motion judge, who determined the discovery requests were "premature" given that plaintiff's arguments arose from the bids which had already been submitted. Motions for summary judgment were filed by defendants to be heard on the scheduled hearing date.

The only challenge to the award set forth in plaintiff's complaint was that Sodexho's proposal failed to include a price per pound for the laundry services. Plaintiff also refuted that its proposal failed to provide adequate references and the provision of a full time manager, as required. At the June 13 hearing, plaintiff sought to raise additional arguments challenging the adequacy of Sodexho's bid, which had not been raised in plaintiff's complaint, OTSC, or brief in opposition to defendant's motion for summary judgment. The court, therefore, declined to hear these arguments and limited plaintiff's complaint to those presented in its brief. The motion judge, however, did suggest that plaintiff file a motion for reconsideration on the issues raised for the first time at the hearing.

The motion judge first determined that plaintiff's bid failed to conform to the requisite specifications sought by the County inasmuch as it neither provided for an available full-time manager nor demonstrated past experience working with similar-sized facilities. The contention that Sodexho's submission contained a material violation of the published specifications was rejected. The County, in awarding the contract to Sodexho, noted it could calculate the per pound cost based upon the total price stated in Sodexho's proposal.

The court also determined that pursuant to the process employed, the County awarded the contract to Sodexho as a competitive contract in lieu of public bidding, which required the evaluation and comparison of the bidders based on the documentation provided in the bid submission. Thus, the trial court reasoned, awarding of the contract was governed by N.J.S.A. 40A:11-4.1. Defendants' motions for summary judgment were granted. Plaintiff's motion for reconsideration was denied, after review.

Plaintiff now appeals presenting these issues, which were first raised at the ...

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