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JEN Electric, Inc. v. County of Essex

June 24, 2008


On appeal from the Superior Court of New Jersey, Law Division, Essex County, Docket No. L-100-08.

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



Argued June 3, 2008

Before Judges Skillman, Yannotti and LeWinn.

Plaintiff JEN Electric, Inc. appeals from an order entered by the trial court on April 4, 2008, which dismissed plaintiff's complaint on the ground that plaintiff did not have standing to challenge bidding specifications issued by defendant County of Essex for a contract to undertake certain traffic signal and road improvements on Central Avenue in Newark, New Jersey. Plaintiff also appeals from an order entered by the trial court on March 19, 2008, which denied plaintiff's motion for leave to file an amended complaint naming Daidone Electric, Inc., a bidder on the contract, as an additional plaintiff. For the reasons that follow, we affirm.


In October 2007, the County publicly advertised for the submission of bids on the contract for the Central Avenue project, which requires, among other things, the successful bidder to provide a traffic control system, video car detection devices and related electronic equipment, and computer software. Plaintiff is a vendor that distributes the PEEK Traffic Control System line of products, which are manufactured by Quixote Corporation. Plaintiff objected to the specifications on the ground that they required equipment and software manufactured by Econolite and did not afford bidders the opportunity to propose products that were the functional equivalent of the Econolite equipment and software.

Thereafter, the County issued an addendum to the specifications which indicated that the County would accept products that were the equivalent of any brand name products designated in the specifications. The addendum also stated that pre-qualification of alterative products was not required. Bids were submitted in response to the request for proposals, but the County elected to reject all of the bids and seek new proposals.

In December 2007, the County issued revised specifications for the project, calling for the submission of bids by January 10, 2008. Plaintiff claimed, however, that the revised specifications were more restrictive than those issued in October 2007 because they allegedly made it impossible for products to be considered the equal of those specified in the bidding documents.

In a letter dated December 21, 2007 to Leonard Sorge, the County's principal buyer, Frank Dobiszewski, plaintiff's vice-president of engineering, asserted that the "form and content" of the revised specifications violated the Local Public Contracts Law (LPCL), N.J.S.A. 40A:11-1 to -51, because the specifications for certain equipment "are for a specific manufacturer (Econolite), with no approved equal provision."

Dobiszewski asserted that there was only one vendor in the State who could supply the necessary traffic signal equipment identified in the bid specifications. He stated that, "[a]s a supplier of a competing brand that can meet or exceed the specific brand listed, [plaintiff] feel[s] [that] this unfair practice is in direct violation of the public bid process." Dobiszewski requested that the County postpone the bid opening "until the specifications can be reviewed and amended."

Sorge responded to Dobiszewski in a letter dated December 24, 2007. He stated that, as indicated in the bid specifications, the County "ALWAYS" accepts an equivalent to any brand name product identified as a requirement in its public bidding specifications. Sorge added that "the equivalent [product] must meet or exceed the specification of the brand stated in the bid and it is the responsibility of the bidder to prove that the equivalent meets or exceeds specification."

On December 26, 2007, the County issued a clarification to the bidding documents, which stated that the specifications "should read Econolite or equal (equivalent) in all sections of the specification[s]." The clarification additionally stated that the equivalent products "must meet or exceed" the bidding requirements.

On December 27, 2007, Dobiszewski again wrote to Sorge. He stated that the revised bid specifications favored a particular "sole source" vendor for the Econolite traffic signal equipment, despite the fact that "generic specifications exist." Dobiszewski asserted that the specifications were unlawfully restrictive. Dobiszewski cited the LPCL, the regulations adopted by the Department of Community Affairs (DCA) pursuant to the LPCL, as well as a federal regulation that pertains to the use of federal funds on state and local highway projects, 23 C.F.R. § 635.411 (2008).

Dobiszewski additionally asserted that the County was overpaying for its traffic signal equipment and that "the total traffic signal equipment package cost given to [c]ontractors from us and another competing supplier was approximately $650K lower than" the supplier of the Econolite products. He asked that the bid specifications "be revised to a generic format in order to provide a fair and open bidding process."

Sorge replied in a letter dated January 3, 2008. He stated that the County had given careful consideration to Dobiszewski's concerns but reaffirmed the County's position that the bid specifications were in full compliance with the LPCL and all applicable federal and state regulations. Sorge indicated that the date for the submission of bids would not be extended and bids would be opened on January 10, 2008.

Sorge added that, as noted in the clarification to the specifications dated December 26, 2007, the County "ALWAYS" accepts equivalents to any "BRAND NAME" specified in a request for bids. He stated that it was the County's "understanding that equivalents to Econolite [b]rand [p]roducts in the specification are commercially available."

On January 8, 2008, plaintiff filed an action in lieu of prerogative writs in the Law Division in which it alleged that the County's revised bid specifications violated the LPCL and certain state and federal regulations. Plaintiff claimed that the specifications were unlawfully restrictive because certain of the requirements for equipment and software were identified by manufacturer, rather than nationally-recognized, generic standards.

Plaintiff asserted that the County had designated five brand-name products to be used on the project, specifically products manufactured by Econolite, Pelco, Clary, Safetran, and APX.*fn1 Plaintiff alleged that the specifications were invalid "because they foreclose[d] the possibility that a vendor [could] supply non-brand name equivalents for any of these products, in direct violation of both federal and state bidding laws."

Plaintiff sought an order declaring the bidding specifications null and void, directing the County to immediately issue an addendum to the specifications that complies with the LPCL and the applicable state and federal regulations, and enjoining the County from awarding any contract based on the current "illegal" bid specifications.

On January 9, 2008, the trial court entered an order temporarily restraining the County from awarding a contract based on the challenged bidding specifications until further order of the court. The court ordered the County to show cause why a preliminary injunction should not be entered enjoining the County from proceeding with the contract. The court also ordered expedited discovery and required that it be completed in advance of the hearing on plaintiff's application for a preliminary injunction.

On January 10, 2008, the County received eight bids on the contract, including a bid from Daidone. The specifications did not require the bidders to identify the products that they would supply in performance of the contract. Therefore, the bids do not reveal whether the bidders contemplated using Econolite products, PEEK products, or any other products in fulfilling the contract requirements.

In its response to the order to show cause, the County argued that the bidding specifications were not unlawful. The County also argued that plaintiff did not have standing to challenge the County's bid specifications because it was not a bidder or prospective bidder on the contract, and was not a taxpayer in Essex County.

Plaintiff thereupon filed a motion seeking leave to amend its complaint to add Daidone as a plaintiff. The County opposed the motion, arguing that Daidone had waived its right to challenge the bid specifications by submitting a bid for the contract without challenging the specifications within the time required by N.J.S.A. 40A:11-13(e). The statute provides in pertinent part that:

[a]ny prospective bidder who wishes to challenge a bid specification shall file such challenges in writing with the contracting agent no less than three business days prior the opening of the bids. Challenges filed after that time shall be considered void and ...

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