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T.N. Ward, Inc. v. South Jersey Transportation Authority

October 26, 2010


On appeal from the South Jersey Transportation Authority, Resolution No. 2010-21.

Per curiam.


Argued October 12, 2010

Before Judges Lisa, Reisner and Alvarez.

This is a public bidding case. Appellant, T.N. Ward, Inc. (Ward) appeals from the final action of the South Jersey Transportation Authority (SJTA), as embodied in its April 20, 2010 resolution, awarding a contract to Hunter Roberts Construction Group, LLC (Hunter) for the construction of a terminal expansion and federal inspection services facility at the Atlantic City International Airport. Ward argues that, although the amount of its bid was higher than Hunter's, Hunter's bid contained material non-waivable defects, as a result of which it should have been rejected and the contract should have been awarded to Ward as the lowest responsible bidder. Ward asks that we vacate the SJTA's April 20, 2010 resolution, direct the SJTA to award the contract to Ward, and award counsel fees to Ward. Based upon our review of the record in light of the controlling legal principles, we conclude that Hunter's bid did not contain any material defects. Accordingly, we affirm.


After advertising for bids, the SJTA opened sealed bids on March 18, 2010.*fn1 The specifications called for a single bid by a general contractor. Hunter's total bid was $25,157,675. Ward submitted the second lowest bid, in the amount of $25,847,000.

On March 31, 2010, Ward's attorney wrote to the SJTA protesting Hunter's bid. The letter specified four*fn2 specific defects as follows: (1) listing a structural steel contractor which was not certified by the American Institute of Steel Construction (AISC), in violation of the specifications; (2) naming two structural steel contractors, in violation of anti-bid shopping laws; (3) inaccurately identifying subcontractors that would perform various categories of work; and (4) misrepresenting the amount of work to be performed by small business enterprises (SBEs). Ward's attorney demanded that Hunter's bid be rejected and the contract be awarded to Ward. Ward's attorney sent two follow-up letters, on April 6 and 14, 2010, expanding upon these points.

On April 19, 2010, representatives of the SJTA conducted a hearing to further consider Ward's protest. It is unclear from the record whether Ward or the SJTA requested the hearing. It is clear, however, that Hunter was not invited to have its representatives present at the hearing. Ward's attorney issued a fourth letter to the SJTA, dated April 19, 2010, in the nature of a legal brief for consideration at the hearing on that date.

The hearing was conducted by various staff members of the SJTA. None of the SJTA commissioners were present. Those present for the SJTA were its in-house counsel, its special counsel for this project, its deputy executive director, its project administrator for engineering, its engineering project manager for this project, its engineering manager, and its administrative services manager.

At the outset of the hearing, in-house counsel stated that the SJTA was "offering [Ward] the opportunity to lodge its protest or voice its concerns regarding the potential awarding of the project." He characterized the proceeding as "informal" and stated that the SJTA would not be offering any testimony, but that the SJTA representatives were "here to hear the arguments from [Ward's counsel]." Special counsel reiterated at the outset that this was an "informal" proceeding, continuing that "[w]e're not using this as an opportunity to present all the evidence that might bear on this particular dispute in response to the request by [Ward]. We're here to hear information." At the end of the hearing, special counsel further explained that "this is not the end of these proceedings, I'm sure, and the SJTA and this group [presumably referring to the SJTA staff members present] certainly would reserve the right, if we think it's necessary, to have additional hearings and maybe supplement the factual record if we think that would be beneficial to the overall system."

At the hearing, Ward's counsel presented brief testimony by three witnesses: John DeVecchio, Ward's executive vice-president; David Galli, a representative of Central Metals, Inc. (Central Metals), one of the structural steel contractors named in Hunter's bid proposal; and Anthony Branda, a project manager estimator for Guthrie Glass & Mirror, Inc. (Gutherie), a subcontractor listed by Hunter to perform the awning and canopies work. We will discuss their testimony later in this opinion.

On the next day, April 20, 2010, the Board of Commissioners of the SJTA met and unanimously adopted the resolution awarding the contract to Hunter and directing its executive director to execute the contract documents. The resolution recited that upon opening and tabulating the bids on March 18, 2010, Hunter's bid was deemed the lowest responsible bid. The resolution made no mention of Ward's protest or the administrative hearing. By awarding the bid to Hunter following the sequence of events we have described, it is reasonable to infer that the information, assertions, and legal arguments presented by Ward through its counsel's letters and at the hearing were insufficient to dispel the SJTA's initial conclusion that Hunter's bid was not only the lowest in amount but the "lowest responsible bid." Stated conversely, the SJTA found Ward's protest factually and legally deficient.

At oral argument, the SJTA's attorney explained that, although there is nothing in the record to substantiate it, the SJTA found it unnecessary to engage in fact-finding. This was so because, even if the facts asserted by Ward (including the testimony it presented at the hearing) were true, no material defect in Hunter's bid was established under the controlling legal principles. Although we are able to review the matter now before us based upon these representations and assumptions, we express the view that, where factual disputes are presented to a public entity in connection with a bid protest, the entity should account for those matters in its decision-making process. Failure to do so could impede informed judicial review and could require a remand for that purpose. We are able to proceed in this case because all of the factual matters presented by Ward are contained in the record on appeal, and we, like the SJTA, accept them as true for purposes of our analysis.

After the SJTA awarded the contract on April 20, 2010, Ward filed a complaint in lieu of prerogative writs in the Law Division on April 22, 2010. After some limited proceedings in the Law Division, Ward acknowledged that, because the SJTA is a state agency, jurisdiction lay in the Appellate Division, see R. 2:2-3(a)(2), not the Law Division. Accordingly, on May 3, 2010, Ward voluntarily dismissed its Law Division complaint and filed this appeal.

On May 6, 2010, Ward moved before this court for a stay of the execution and performance of the contract between the SJTA and Hunter, for acceleration of the appeal, and for supplementation of the record. On May 26, 2010, we granted the stay and ordered acceleration. We denied leave to supplement the record.


Ward has raised a threshold issue as to which statutory provisions pertaining to public bidding apply in this case. In the course of its bid protest before the SJTA and in the Law Division, it contended that the Local Public Contracts Law (LCPL), N.J.S.A. 40A:11-1 to -51, applies. The SJTA has contended all along that it is governed by the provisions of N.J.S.A. 52:32-2, which we will refer to as the "State Bidding Law." On appeal, Ward has modified its position. In its brief, it contends that it is unclear whether the SJTA is a local or state agency, but suggests that under either the LCPL or the State Bidding Law the result would be the same. At oral argument, Ward's attorney conceded that the State Bidding Law controls, but argued that we should consider provisions in the LCPL in determining the correct application of the State Bidding Law to the facts of this case. Indeed, by voluntarily dismissing its Law Division action and filing this appeal pursuant to Rule 2:2-3(a)(2), Ward has, in effect, acknowledged that the SJTA is a state agency, as a result of which the State Bidding Law applies.

The issue is not a close one. The SJTA is clearly not a local contracting unit within the definition of the LCPL. See N.J.S.A. 40A:11-2(1). It was established by the South Jersey Transportation Authority Act, N.J.S.A. 27:25A-1 to -42, as a "body corporate and politic" within the Department of Transportation. N.J.S.A. 27:25A-4. By statute, the SJTA shall constitute an instrumentality of the State exercising public and essential government functions to provide for the public safety, convenience, benefit and welfare, and the ...

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