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Vanas Construction Co., Inc v. City of Jersey City and Arco Electrical Contractors

SUPERIOR COURT OF NEW JERSEY APPELLATE DIVISION


December 23, 2010

VANAS CONSTRUCTION CO., INC., PLAINTIFF-RESPONDENT,
v.
CITY OF JERSEY CITY AND ARCO ELECTRICAL CONTRACTORS, INC., T/D/B/A ARCO CONSTRUCTION GROUP, DEFENDANTS-APPELLANTS.
JOGI CONSTRUCTION, INC., PLAINTIFF-RESPONDENT,
v.
CITY OF JERSEY CITY AND JOSEPH M. SANZARI, INC., DEFENDANTS-APPELLANTS.

On appeal from the Superior Court of New Jersey, Law Division, Hudson County, Docket A-1650-10T2 A-1804-10T2

Per curiam.

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

Argued December 15, 2010

Before Judges Sapp-Peterson and Fasciale.

In these three accelerated appeals that have been consolidated, appellants Joseph M. Sanzari, Inc. (Sanzari), Arco Electical Contractors, Inc., t/d/b/a Arco Construction Group (Arco), and the City of Jersey City (the City), appeal from trial court orders entering judgment in favor of respondent Jogi Construction, Inc. (Jogi) and partial judgment in favor of Vanas Construction Co., Inc. (Vanas). The trial court found that bid proposals submitted by Sanzari for the Newark Avenue Roadway Improvement Project, Federal Project No. FS-7851(102) and Jersey City Project No. 09-006 (Newark Avenue Project), and by Arco for the West District Police Precinct, Project No. 2007-002 (West District Precinct Project), were materially defective and that the defects were non-waivable. The court permanently enjoined and restrained the City from implementing and effectuating the respective contracts as to Sanzari and Arco. We affirm.

I.

Jersey City advertised for bids in connection with the two projects in the spring of 2010. The bid specifications required that prospective bidders complete and submit numerous documents.

Two such documents were the "Certificate of Experience" of the general contractor and the "Plant and Equipment Questionnaire"

(Questionnaire) to be completed by the general contractor.

Additionally, the bid specifications required the separate submission of a Certificate of Experience and Questionnaire to be completed by each subcontractor required to be named pursuant to N.J.S.A. 40A:11-16.*fn2

It is undisputed that when the City opened bids for the Newark Avenue Project on May 6, 2010, Sanzari's bid was the lowest at $3,169,067.80, followed by Jogi at $3,348,789.94, and English Paving Company, Inc., at $3,399,133.73. However, Sanzari's bid proposal did not include a completed Certificate of Experience and Questionnaire for Kevco Electric Company (Kevco), listed as Sanzari's electrical engineer in the bid proposal. The City notified Sanzari of the deficiency, and either on May 6 or May 7, Sanzari provided the omitted documents. Similarly, when the City opened the bids for the West District Precinct Project on August 5, 2010, Arco's bid of $9,653,153 was the lowest, followed by Vanas at $9,750,000, and Onekey, LLC at $9,790,000. Arco also failed to include in its package completed Certificates of Experience and Questionnaires for K & D Contractors, LLC, its proposed plumbing and HVAC subcontractor; and Erection & Welding Contractors, its proposed structural steel and ornamental iron subcontractor. The City advised Arco that it could submit the requisite documents within twenty-four hours.

A. The Jogi Bid Protest

Jogi filed a bid protest for the Newark Avenue Project on May 7, the day following bid openings. Jogi contended the Sanzari bid proposal was non-responsive and thereby null and void. In a letter dated May 14, Jersey City notified Sanzari that "[p]ursuant to the terms and conditions of the City's bid specifications, the City must reject Sanzari's bid." The letter stated further:

The Certificates of Experience for the subcontractor named in the proposal pursuant to N.J.S.A. 40A:11-16 was discussed in two different sections of the bid specification. Section 8 entitled "Bid Documents" on page I-6 of the Information to Bidders advised bidders that Certificates of Experience for subcontractors required by law to be listed in the proposal were to be submitted with the proposal. It advised that a failure to do so would result in rejection of the bid. The Schedule of Required Submittals by Bidder on page SRS-1 advised that a failure to include the Certificates would result in rejection of the bid.

([C]ontracting authorities may not waive any material or substantial variation between the conditions under which the bids are invited and the proposal submitted). The Certificates of Experience for subcontractors that were required by law to be listed in the bid proposal were referenced in two different sections of the bid specifications. Bidders were clearly advised that the Certificates were mandatory documents that were to be submitted with the proposal. The City will proceed to evaluate the bid proposal of Jogi Construction, Inc. to determine if it is the lowest responsible bidder.

In correspondence dated May 20, Sanzari's attorney stated that the bid proposal was not materially defective and that the City was "legally bound under the Local Public Contracts Law to award the contract to Sanzari as the lowest responsible bidder."

He first argued as a threshold matter that N.J.S.A. 40A:11-16(b) did not apply because Kevco was the only electrical subcontractor named in the proposal and, therefore, Sanzari was only required to list the "names of the trade subcontractors required to be listed by N.J.S.A. 40A:11-16." Second, he argued that Kevco "is well-known to the City from other City public projects in which Kevco has performed or is performing electrical work." Third, he challenged the two provisions contained in the bid proposals cited by the City in its May 14 correspondence:

Neither Section 8 nor the Schedule state that the general contractor (i.e., the bidder) must provide a separate Certificate of Experience for its subcontractors, be they listed or unlisted subcontractors. Indeed, the Certificate of Experience itself does not state that it must be completed by the listed subcontractors. Rather, it states at pg. P-32 as follows: "IMPORTANT: THIS CERTIFICATION MUST BE FILLED IN BY BIDDER." (Emphasis in original).

Sanzari's next argument acknowledged that the Questionnaire expressly required the general contractor to provide duplicate copies of the proposal to its proposed subcontractors and required the subcontractors to complete the duplicate documents, but noted that this provision was "found a[t] the bottom of the second page of the Plant and Equipment Questionnaire, which is of course a different document that asks for information particular to plant and equipment." Finally, he argued that the City ignored "the equally important provisions of Section 29 ['SUBMISSION OF POST BID INFORMATION'] of the Information to Bidders[,]" that contemplated "the possibility of post-bid submissions specifically addressed to the responsibility of the proposed subcontractors."

Subsequent to its receipt of the correspondence from Sanzari's attorney, the City, in a letter dated May 27, 2010, notified Sanzari that after reviewing Tec Electric, Inc. v. Franklin Lakes Board of Education, 284 N.J. Super. 480 (Law Div. 1995), it reconsidered its rejection of Sanzari's bid proposal and concluded that "despite what the specifications stated, Sanzari's failure to include the Certificate [of Experience for Kevco] was a minor defect which could be and was cured[,]" and that under the Tec Electric, Inc. decision, it was required to permit "Sanzari to cure the defect."

B. The Vanas Bid Protest

On August 9, five days after bid opening, Vanas formally objected to the award of the contract to Arco. It first took "exception to the leniency the City has allowed Arco with respect to issuing this documentation within 24 hours as all of this documentation was to be 'submitted with the bid' as indicated in multiple locations in the bid form." Vanas next maintained that Arco's non-compliance "prevented the City from determining that legitimate, experienced subcontractors were being used." It additionally argued:

Furthermore, if the bid of Arco was substantially less tha[n] the second bid, they could adopt a position that their bid did not comply with the requirements of the bid form and therefore withdraw their bid without penalty and without being bound by the Bid Bond to the City of Jersey City[,] thereby giving them an advantage over every other bidder who submitted bids in accordance with the Contract Documents. Clearly, the intent of the Bid Form was that all the required documentation be submitted with the bid. The bid of Arco did not comply with this requirement.

In response, the City acknowledged that the failure to include the Certificate of Experience and Questionnaire documents for each of Arco's subcontractors was "clearly a bid defect." Specifically, the City concluded:

First, the submission of documents used to determine the responsibility of a bidder did not deprive the City of its assurance that the contract would be entered into, performed and guaranteed according to the specified requirements. Arco submitted a bid bond and consent of surety and would have suffered severe financial consequences if it had refused to provide the documents to the City. Second, allowing Arco to cure the defect did not give it a competitive advantage over the other bidders. The missing documents pertained to the experience and qualification of subcontractors. The document did not and could not influence the amount of the Arco[] bid or of any of the other bidders. See[] Tec Elec[.], Inc. v. Franklin Lakes Bd. of Educ[.], 284 N.J. Super. 480, 487 (Law Div. 1995).

In a resolution adopted on July 14, 2010, City Council awarded the Newark Avenue Project to Sanzari. In a resolution dated September 15, 2010, City Council awarded the West District Precinct Project to Arco. Jogi and Vanas, as the second lowest bidders on the respective contracts, filed verified complaints in lieu of prerogative writ seeking to set aside the action of the City. Jogi argued that the contract award to Sanzari was arbitrary, unreasonable, capricious, illegal, and in derogation of public policy. Vanas' complaint raised similar allegations but additionally alleged that "[a]ssuming a post-bid cure was even permissible, Arco's post-bid submissions still did not substantially meet the requirements of the bid invitation."

C. The Prerogative Writ Actions

The trial court conducted oral argument on the Sanzari/Jogi matter on September 28 and on the Arco/Vanas matter on October 7. The court reserved decision after each of the arguments and issued a written opinion on October 15, granting judgment in favor of Jogi and partial judgment in favor of Vanas. In reaching its decision, the court first considered the purposes for the Certificate of Experience and Questionnaire. To answer that question, the court referenced the City's explanation contained in its August 24, 2010 letter to Vanas in response to Vanas' challenge to the Arco award:

A Certificate of Experience and a Plant & Equipment Questionnaire are documents that the City uses to determine whether the low bidder, and its subcontractors that are required to be listed pursuant to N.J.S.A. 40A:11-16, are responsible. Responsibility involves a consideration of a bidder's experience, financial ability, moral integrity and availability of facilities necessary to perform the contract . . . .

With this language as the factual framework for analyzing the purposes of the two documents, the court next noted that in both bid proposals "all bidders were put on notice [by the express language of the bid information and specifications prepared by the City] that failure to include the Certificates and Questionnaires would result in 'automatic rejection . . . at the time of [b]id reception.'" The court then reasoned:

In both matters before me, the bid submissions from the lowest bidders included a list of subcontractors but failed to include the Certificates or other supporting documents as to the subcontractors named. As discussed above, the express purpose of the Certificate is to assist the City in determining whether the low bidder and its named subcontractors are sufficiently experienced, financially able, and in possession of the facilities and moral integrity necessary to perform the contracts in question. In the absence of these Certificates and other required documentation in both cases, the City was essentially provided with nothing more than the names and addresses of the subcontractors that would be responsible for performing portions of the work required under the contract. At the time of bid reception, the City therefore had no information regarding prior work performed by each subcontractor, the manner in which each subcontractor had inspected the proposed work, each subcontractor's plan for performing the proposed work, the supervisor responsible for overseeing each subcontractor, full information as to each subcontractor's other private or government contracts, each subcontractor's available equipment, or the status of each subcontractor's contracts for materials.

The court concluded that the action of the City in awarding the two contracts to the two lowest bidders violated N.J.S.A. 40A:11-23.2.

The court also considered the impact of the awards under the two-part test first enunciated by Judge Pressler in Township of River Vale v. R.J. Longo Construction Co., Inc., 127 N.J. Super. 207, 216 (Law. Div. 1974) and adopted by the Supreme Court in Meadowbrook Carting Co., Inc. v. Borough of Island Heights, 138 N.J. 307, 313 (1994):

[F]irst, whether the effect of a waiver would be to deprive the municipality of its assurance that the contract will be entered into, performed and guaranteed according to its specified requirements, and second, whether it is of such a nature that its waiver would adversely affect competitive bidding by placing a bidder in a position of advantage over other bidders or by otherwise undermining the necessary common standard of competition.

[River Vale, supra, 127 N.J. Super. at 216.]

The court noted the Court's recognition in Meadowbrook that notwithstanding the existence of the River Vale test, decisions applying the two-part test "have been somewhat inconsistent in articulating the difference between a material defect in a bid that cannot be waived and an immaterial defect that can be waived." Meadowbrook, supra, 138 N.J. 319.

Against this analytical framework, the court rejected the argument advanced that bid bonds were in place to prevent Sanzari and Arco from walking away from the contracts once the bids were opened and they were deemed non-compliant because the bid bonds for each project would only entitle the City to $20,000 in each case if the bidders walked away and the projects were valued in excess of $3 million and $9 million respectively.

Consequently, the court concluded "[t]he non[-]compliance by both [d]efendants precluded such commitment because the omission of Certificates effectively left nullification in the hands of the bidders." Based upon these findings, the court was satisfied that Jersey City, in both instances was "deprived of adequate assurance that [the] contracts would be entered into with the non[-]compliant [d]efendants."

Addressing the second prong, the court stated:

[B]oth [d]efendants were afforded an unfair bidding advantage insofar as they were not required to submit the subcontractor documentation in their initial bid submissions. Whether or not the burden of doing so is considered to be laborious, the requirement of obtaining Certificates and supporting documents from all subcontractors must surely lessen the pool of subcontractor candidates from which a bidding contractor can choose in preparing the final bid submission. I therefore find it indisputable that a general contractor who is not required to obtain these documents prior to bid submission is placed in a position of advantage over its competitors.

Moreover, in order to achieve the "common standard of competition" called for by the LPCL,*fn3 the conditions and specifications of the bidding process "must apply equally to all prospective bidders." Hillside [v. Sternin], 25 N.J. [317,] 322 [(1957)]. Were it otherwise, and were courts to freely permit individual bidders to follow or disregard bid specifications at their leisure, "the mandate for equality among bidders would be illusory and the advantages of competition would be lost." Id. at 323. The unambiguous language included in the packet submitted to bidders by the City is not, and cannot, be disputed by the parties; all bidders were put on notice that failure to include the necessary Certificates and Questionnaires would result in "automatic rejection . . . at the time of [b]id reception." In conformity with its rejection of a bid by A.J.M. Contractors just months earlier on the same grounds, the City initially enforced the clear language of its bid specifications by rejecting Defendant Sanzari's bid proposal for failure to include the Kevco Certificate in its initial bid submission. The City thereafter reversed course and permitted both [d]efendants the opportunity to cure the very same type of defect that had caused the rejection of the A.J.M. bid. I conclude that a "common standard of competition" cannot exist when the rules of the game are changed at the very moment that they are broken.

Subsequent to the court's rulings, the City awarded the contracts to Jogi and Vanas. The court thereafter entered an order staying its October 15 orders. Sanzari and Arco filed applications with this court seeking permission to file an emergent motion on short notice to continue the stay pending appeal. We denied the application by order dated November 18, 2010, and on appeal to the Supreme Court, our order was reversed. By order dated November 24, we granted the emergent application, extended the trial court's stay pending appeal, issued an accelerated briefing schedule and consolidated the two appeals for purposes of joint disposition. The City filed a separate appeal on December 1, 2010, which has been consolidated with the Sanzari and Arco appeals.

On appeal, Sanzari contends:

POINT I

THE CITY ACTED WITHIN ITS PERMISSIBLE DISCRETION WHEN IT PERMITTED SANZARI TO CURE AN IMMATERIAL AND WAIVABLE DEFECT IN FAILING TO INCLUDE THE CERTIFICATE OF EXPERIENCE.

A. THE CONFLICTING BID INSTRUCTIONS DID NOT EXPRESSLY REQUIRE THE CERTIFICATE

OR QUESTIONNAIRE FOR SUBCONTRACTORS BE SUBMITTED AT THE TIME OF BIDDING.

B. EVEN IF A CERTIFICATE AND QUESTIONNAIRE FOR KEVCO WERE REQUIRED AT THE TIME OF BIDDING, THEIR INADVERTENT OMISSION DID NOT CONSTITUTE A MATERIAL DEFECT.

C. THE LACK OF MATERIALITY OF THE LATE SUBMISSION OF THE DOCUMENTS IS FURTHER EVIDENCED BY . . . SANZARI'S COMPLETE COMPLIANCE WITH THE LPCL.

POINT II

IT IS IN THE BEST INTEREST OF THE PUBLIC THAT THE CONTRACT BE AWARDED TO SANZARI.

In its appeal, Arco contends:

POINT I

ARCO'S FAILURE TO SUBMIT THE REQUIRED SUBCONTRACTOR DOCUMENTATION WITH ITS BID DID NOT VIOLATE THE FIRST PRONG OF RIVERVALE/MEADOWBROOK MATERIALITY ANALYSIS BECAUSE IT DID NOT DEPRIVE JERSEY CITY OF ANY ASSURANCE THAT THE CONTRACT WOULD BE ENTERED INTO AND PERFORMED BY ARCO ACCORDING TO ITS SPECIFIED TERMS.

POINT II

JERSEY CITY'S AWARD OF THE CONTRACT TO ARCO DID NOT VIOLATE THE SECOND PRONG OF RIVERVALE/MEADOWBROOK MATERIALITY ANALYSIS BECAUSE ARCO GAVE NO COMPETITIVE ADVANTAGE OVER VANAS OR ANY OTHER COMPLIANT BIDDER.

POINT III

VANAS' DISCUSSION OF OTHER ALLEGED DEFICIENCIES IN ARCO'S POST-BID SUBMISSIONS IS INAPPROPRIATE AND SHOULD NOT BE CONSIDERED BY THIS COURT.

The City, in its appeal, contends:

POINT I

THE FAILURE OF SANZARI AND ARCO TO INCLUDE WITH THEIR BID PROPOSALS CERTIFICATES OF EXPERIENCE AND PLANT AND EQUIPMENT QUESTIONNAIRES FOR SUBCONTRACTORS NAMED PURSUANT TO N.J.S.A. 40A:11-16 WERE CURABLE BID DEFECTS.

POINT II

SANZARI AND ARCO WERE NOT AFFORDED AN UNFAIR BIDDING ADVANTAGE BECAUSE THEY WERE LEGALLY BOUND TO PERFORM THE CONTRACTS WITH THE SUBCONTRACTORS NAMED IN THEIR BID PROPOSALS.

POINT III

THE LAW PERMITS THE CITY TO ALLOW A LOW BIDDER TO CURE MINOR BID DEFECTS.

POINT IV

THERE WAS A COMMON STANDARD OF COMPETITION FOR ALL BIDDERS WHO SUBMITTED PROPOSALS FOR PROJECTS I AND II.

II.

In our review of the City's determination that the omission of the Certificates of Experience and Questionnaires in the bid proposals submitted by Sanzari and Arco were minor defects that were curable and waivable, we apply the same standard of review employed by the trial court, namely, whether the decision was arbitrary, unreasonable or capricious. Palamar Constr., Inc. v. Twp. of Pennsauken, 196 N.J. Super. 241, 250 (App. Div. 1983).

We approach this matter mindful that ordinarily it is not our task to substitute our judgment for that of the municipality, particularly where municipal action calls for the exercise of discretion. Colonnelli Bros., Inc. v. Vill. of Ridgefield Park, 284 N.J. Super. 538, 541 (App. Div. 1995), certif. denied, 143 N.J. 327 (1996). Nonetheless, in the context of awarding public contracts, we are also mindful that we have construed local public contracts law "to curtail the discretion of local authorities by demanding strict compliance with public bidding guidelines." L. Pucillo & Sons, Inc. v. Mayor and Council of Borough of New Milford, 73 N.J. 349, 356 (1977).

Close scrutiny of municipal action in the award of public contracts furthers the objective underlying all public bidding laws, namely, "to secure for the taxpayers the benefits of competition and to promote the honesty and integrity of the bidders and the system[.]" In re Protest of Award of On-Line Games Prod. and Operation Servs. Contract, 279 N.J. Super. 566, 589 (App. Div. 1995). Public "[b]idding statutes are for the benefit of the taxpayers and are construed as nearly as possible with sole reference to the public good." Terminal Constr. Corp. v. Atl. County Sewerage Auth., 67 N.J. 403, 409-10 (1975).

The court observed more than fifty years ago in Hillside, supra, "[i]n this field it is better to leave the door tightly closed than to permit it to be ajar, thus necessitating forevermore in such cases speculation as to whether or not it was purposely left that way." 25 N.J. at 326. Consequently, a municipality must ensure that its bidding process is not used or perceived as being used in such a way as to favor one bidder over another or to allow for corruption. Terminal Constr., supra, 67 N.J. at 410. In doing so, a municipality furthers the objectives of our public contract laws, which is not to promote the individual interests of the bidders, but to promote the public interest by "inviting competition in which all bidders are placed on an equal basis[.]" River Vale, supra, 127 N.J. Super. at 215. See also 426 Bloomfield Ave. Corp. v. City of Newark, 262 N.J. Super. 384, 387 (App. Div. 1993).

Here, there is no dispute that the City identified the submission of these documents as mandatory and that the consequence for the failure to submit the documents was automatic rejection. It is also undisputed that the documents were not included in the bid proposals as required. If the omitted documents are statutorily mandated, then unquestionably the failure to submit the documents with the bid proposal is non-waivable. N.J.S.A. 40A:11-23.1; see also P & A Constr., Inc. v. Twp. of Woodbridge, 365 N.J. Super. 164, 177 (App. Div. 2004). On the other hand, if not statutorily mandated, the determination of whether the defects are minor or inconsequential and therefore waivable, or material and non- waivable is subject to the two-part River Vale test. Ibid.

A.

The trial judge found that the omission of the Certificates of Experience and Questionnaire for the subcontractors rendered Sanzari's and Arco's bids "defectively unresponsive and non- curable" and the City's decision to permit Sanzari and Arco to cure the defect violated N.J.S.A. 40A:11-23.2.

N.J.S.A. 40A:11-23.2 states in relevant part:

When required by the bid plans and specifications, the following requirements shall be considered mandatory items to be submitted at the time specified by the contracting unit for the receipt of the bids; the failure to submit any one of the mandatory items shall be deemed a fatal defect that shall render the bid proposal unresponsive and that cannot be cured by the governing body:

d. A listing of subcontractors pursuant to section 16 of P.L.1971, c.198 (C.40A:11-16)[.]

N.J.S.A. 40A:11-16 requires that in the case of a single bid contract, as in the Sanzari and Arco bids, the bids must contain:

the name or names of all subcontractors to whom the bidder will subcontract the furnishing of plumbing and gas fitting, and all kindred work, and of the steam and hot water heating and ventilating apparatus, steam power plants and kindred work, and electrical work, structural steel and ornamental iron work, each of which subcontractors shall be qualified in accordance with P.L.1971, c.198 (C.40A:11-1 et seq.)

[(emphasis added).]

While the bid proposals contained the names of the subcontractors, there was nothing provided that demonstrated the subcontractors' qualifications in "accordance with P.L.1971, c.198 (C.40A:11-1 et seq.)" Ibid. We construe the reference to "40A:11-1 et seq." to simply mean that the subcontractor must meet the test for qualifications under the LPCL, whatever those particular qualifications may be. A review of the LPCL does not set forth any particular requirement for subcontractors other than their listing under Section 11-16. Thus, we do not agree that the failure to provide the Certificate and Questionnaire for the subcontractors violated N.J.S.A. 40A:11-23.2 as the trial court found. That, however, does not end the discussion.

As we have previously had occasion to state:

[T]he 1999 amendments to the [LPCL] do not contain any legislative directive concerning the waiver of other bid defects. We do not believe that this legislative silence can be reasonably construed as an affirmative authorization for local contracting agencies to waive any bid defect that is not expressly set forth in N.J.S.A. 40A:11-23.2. Instead, we conclude that N.J.S.A. 40A:11-23.2 should be construed as a legislative directive that a bidder's failure to submit any of the five mandatory items set forth therein shall automatically be considered a non[-]waivable defect, but any other bid defect shall continue to be considered under the River Vale criteria of materiality.

[P & A Constr., supra, 365 N.J. Super. at 177.]

Because the trial court did not base its decision solely upon its finding that the City violated N.J.S.A. 40A:11-23.2, but instead also considered the River Vale criteria of materiality, any error in reaching the conclusion that the City violated N.J.S.A. 40A:11-23.2 was harmless. R. 2:10-2.

B.

In applying the River Vale factors, we must first determine whether the City's decision to waive its requirement that bidders submit the Certificates of Experience and Questionnaires at the time the bid proposals were submitted "deprive[d] the [the City] of its assurance that the contract [would] be entered into, performed and guaranteed according to its specified requirements." River Vale, supra, 127 N.J. Super. at 216. As to Sanzari, in reversing its earlier rejection of the bids as non-conforming "with the bidding instructions," in its May 27, 2010 letter, the City simply stated that "despite what the specifications stated, this was a minor bid defect." The letter provided no explanation why the defect was deemed minor.

Rather, it merely referenced the River Vale factors and then, in a conclusory manner, stated "[b]ased on this test," the omission of the documents "was a minor defect which could be and was cured."

As to Arco, the City offered three reasons why it considered the defect to be minor: (1) Arco submitted a bid bond and consent surety and would have suffered severe financial consequences if it had refused to provide the documents to the City; (2) the "missing documents pertained to the experience and qualification of subcontractors"; and (3) the "document did not and could not influence the amount of . . . Arco's bid or of any of the other bidders." Financial security to perform is only one factor that evidences the bidders ability to perform the contract in accordance with the plans and bid specifications. The City used the Certificate of Experience and Questionaire to consider other factors, including "availability of facilities necessary to perform the contract[.]" The absence of these documents at the time the bids were received provided no assurances of the "availability of facilities necessary to perform the contract[.]" The City had no information whatsoever in this regard. As the trial court stated:

In the absence of these Certificates and other required documentation in both cases, the City was essentially provided with nothing more than the names and addresses of the subcontractors that would be responsible for performing portions of the work required under the contract. At the time of bid reception, the City therefore had no information regarding prior work performed by each subcontractor, the manner in which each subcontractor had inspected the proposed work, each subcontractor's plan for performing the proposed work, the supervisor responsible for overseeing each subcontractor, full information as to each subcontractor's other private or government contracts, each subcontractor's available equipment, or the status of each subcontractor's contracts for materials.

We note that although not mandated statutorily for subcontractors, N.J.S.A. 40A:11-20 provides:

There may be required from any bidder submitting a bid on public work to any contracting unit, duly advertised for in accordance with law, a certificate showing that he owns, leases, or controls all the necessary equipment required by the plans, specifications and advertisements under which bids are asked for and if the bidder is not the actual owner or lessee of any such equipment, his certificate shall state the source from which the equipment will be obtained, and shall be accompanied by a certificate from the owner or person in control of the equipment definitely granting to the bidder the control of the equipment required during such time as may be necessary for the completion of that portion of the contract for which it is necessary.

The inclusion of this provision in the LPCL is clear evidence of the substantive materiality of the Questionnaire here because it calls for the bidder to provide most of the information set forth under Section 11-20. The City exercised its discretion to not only require the general contractor to complete the Questionnaire but also required each subcontractor listed by the bidder to also complete the Questionnaire. As we stated in P & A Construction, Inc., supra, 365 N.J. Super. at 173, where the issue was the omission of a certified financial statement, which was a mandatory requirement in the bid specification but later deemed waivable by the municipality because it was not statutorily mandated:

The essential reason for requiring a bidder to submit a certified financial statement with its bid, as with the requirement that a bidder show that it owns, leases or controls whatever equipment is necessary to perform the contract . . . is to provide assurance to the contracting agency that the bidder will be able to complete performance if it is awarded the contract.

[Ibid. (emphasis added).]

We agree, as appellants argued, that not every item designated as mandatory in a bid proposal means that the item is material and therefore non-waivable. Here, however, the record does not support such a finding. If, for example, the Certificate of Experience or Questionnaire contains responses that facially reflect questionable plans, supervision, availability of the necessary equipment, "this would provide a proper basis for the contracting agency to reject the bid on the ground that the bidder's ability to complete performance could be jeopardized by a lack of" sufficient human and equipment resources. Ibid. Thus, by waiving its requirement that the Certificates of Experience and Questionnaires must be included in the bid proposals at the time of opening the City was deprived of "'assurance that the contract [would] be . . . performed and guaranteed according to its specified requirements.'" Ibid. (quoting River Vale, supra, 127 N.J. Super. at 216).

As to the second prong of the River Vale analysis, we are in complete agreement with the trial court's findings:

[B]oth [d]efendants were afforded an unfair bidding advantage insofar as they were not required to submit the subcontractor documentation in their initial bid submissions. Whether or not the burden of doing so is considered to be laborious, the requirement of obtaining Certificates and supporting documents from all subcontractors must surely lessen the pool of subcontractor candidates from which a bidding contractor can choose in preparing the final bid submission. I therefore find it indisputable that a general contractor who is not required to obtain these documents prior to bid submission is placed in a position of advantage over its competitors.

Moreover, in order to achieve the "common standard of competition" called for by the LPCL, the conditions and specifications of the bidding process "must apply equally to all prospective bidders." Hillside, [supra,] 25 N.J. at 322. Were it otherwise, and were courts to freely permit individual bidders to follow or disregard bid specifications at their leisure, "the mandate for equality among bidders would be illusory and the advantages of competition would be lost." Id. at 323. The unambiguous language included in the packet submitted to bidders by the City is not, and cannot, be disputed by the parties; all bidders were put on notice that failure to include the necessary Certificates and Questionnaires would result in "automatic rejection . . . at the time of Bid reception." In conformity with its rejection of a bid by A.J.M. Contractors just months earlier on the same grounds, the City initially enforced the clear language of its bid specifications by rejecting Defendant Sanzari's bid proposal for failure to include the Kevco Certificate in its initial bid submission. The City thereafter reversed course and permitted both [d]efendants the opportunity to cure the very same type of defect that had caused the rejection of the A.J.M. bid. I conclude that a "common standard of competition" cannot exist when the rules of the game are changed at the very moment that they are broken.

There is no contention here that the actions of Sanzari or Arco were other than as represented, inadvertent. Nor is there any evidence that the City's actions in waiving the defects were undertaken for any reason other than advancing the public interest. At oral argument, the City explained that the inclusion of the Certificate of Experience and Questionnaire as mandatory in the bid proposals and for which automatic rejection would result in the event of non-compliance, was a "mistake."

We initially note that this was not an explanation offered to any of the bidders at the time of the bid protests. Nor was this argument advanced before the trial court. Hence, there is no support for this contention in the record and we decline to consider it here. Star of Sea Concrete Corp. v. Lucas Brothers, Inc., 370 N.J. Super. 60, 72 (App. Div. 2004) (citing Nieder v. Royal Indem. Ins. Co., 62 N.J. 229, 234 (1973)).

Moreover, by urging that we view what it clearly denoted in the bid proposal as mandatory and grounds for automatic rejection as a minor defect that was waivable and curable, the City "would be free to reject a low bidder for such an omission" -- as the trial court observed had occurred months earlier with the A.J.M. bid. Pucillo, supra, 73 N.J. at 355. Yet, the City "could accept a non-conforming bid [such as the Sanzari and Arco bids,] when it was 'in the best interest of [the City].'" Id. at 356. In essence, the City has: transform[ed] the mandatory requirement in [its] specifications into a polite request. The ordinary reader of the specifications would regard them as calling for [compliance] on all the terms specified. Awarding the contract to one who failed to [comply] on all terms necessary created an inequity in the bidding and an opportunity for favoritism.

[Ibid.]

The savings to the taxpayers by waiving the defects and awarding the two contracts to Sanzari and Arco are not insignificant. However, savings to the taxpayers, standing alone, is insufficient to justify waiver of a material requirement in the bid specifications. Meadowbrook, supra, 138 N.J. at 325. "Contracts are not to be awarded 'simply to the lowest bidder, but rather to the lowest bidder that complies with the substantive and procedural requirements in the bid advertisements and specifications.'" Star of the Sea, supra, 370 N.J. Super. at 73 (quoting Meadowbrook, supra, 138 N.J. at 313). N.J.S.A. 40A:11-2(27) defines "lowest responsible bidder" as "the bidder or vendor: (a) whose response to a request for bids offers the lowest price and is responsive; and (b) who is responsible. (emphasis added). "While the public may occasionally be harmed by failure to waive a bid requirement, 'the overriding interest in insuring the integrity of the bidding process is more important than the isolated savings at stake.'" Star of the Sea, supra, 370 N.J. Super. at 73 (quoting Meadowbrook, supra, 138 N.J. at 313).

We disagree with the argument advanced by appellants that because the post-bid submissions call for further submissions, upon request from the engineer or architect, this is further support for their contention that the omissions were minor defects. This language, contained in the Information to Bidders, is permissive and does not call for the submission of documentation addressing the responsibility of the proposed subcontractors unless it is requested. We therefore do not view this provision as diminishing the materiality of the Certificates of Experience and Questionnaires, whose significance here was evidenced by (1) the mandatory nature of the documents as expressly noted in the bid proposals; (2) notice provided to the bidders in the proposal that the consequences for non-compliance is automatic rejection; and (3) the City's clear and unequivocal statement of its purpose for requesting the documents. We note further that in both bid proposals, these two documents were located sequentially with each other, rather than separated by numerous other pages between the two documents.

Finally, in their briefs and during oral argument, Sanzari and Arco placed considerable reliance upon Palamar Construction, Inc., supra, and the Law Division decision in Tec Electric Inc., supra, to support their position that the omissions here were minor defects that were curable. We agree with Jogi and Vanas that these cases are factually distinguishable. Neither case addressed a bid specification that was delineated as mandatory and included other evidence in the record demonstrating the substantive materiality of the omitted documents. Further, if a defect is material and non-waivable, the timing of the cure, in our view, becomes irrelevant.

The remaining arguments advanced by appellants are without sufficient merit to warrant discussion in a written opinion. R. 2:11-3(e)(1)(E).

Affirmed.

APPENDIX A

1. CERTIFICATE OF EXPERIENCE:

The Bidder must supply a document which will indicate his experience in performing the required work under this Project. This document shall be attached to this Proposal and along with this Certificate, shall be signed by Bidder.

The information to be included on this document shall consist of at least the following:

(1) Name of Owner

(2) Amount of Contract

(3) Type of Work

(4) Name of Owner's Engineer in Charge of Work

(5) Address of Owner's Engineer, Street and Municipality

(6) Approximate Dates

hereby certifies that has performed the following work as described on the attached sheet within the past three (3) years.

Name of Bidder

Witness By

Title

Date

IMPORTANT: THIS CERTIFICATION MUST BE FILLED IN BY BIDDER.

APPENDIX B

2. PLANT AND EQUIPMENT QUESTIONNAIRE

Submitted to City of Jersey City

By a Corporation

a Partnership

an Individual

With Principal Office at

The signatory of this questionnaire guarantees the truth and accuracy of all statements and of all answers to interrogatories hereinafter made.

a. In what matter have you inspected the proposed work? Explain in detail.

b. Explain your plan and schedule for performing the proposed work.

c. The work, if awarded to you, will have the personal supervision of whom?

d. Do you intend to do the paving on the proposed work with your own forces? If so, give type of equipment to be used.

e. Do you intend to sublet any portions of the work? If so, it is mandatory pursuant to N.J.S.A. 40A:11-16 that you list the names of those subcontractors under each discipline below[.] [F]ailure to do so will automatically result in rejection of the bid.

Trade Name of Subcontractor Address

Plumbing & Gas Fitting and all kindred

[W]ork

Steam and Hot Water Heating and Ventilating Apparatus, and all kindred Work

Electric Work

Structural Steel & Ornamental Iron

Each subcontractor listed above shall fill out and submit a Certificate of Experience (as shown in this Bid Proposal) and items a, b, c, f, g, h, i and the remaining affidavit, duly executed, on the last page of the "Plant and Equipment Questionnaire". The General Contractor shall supply each subcontractor with duplicate pages of this proposal to be filled out by the subcontractor and then submitted with the bid proposal.

Whenever a bid sets forth more than one subcontractor for any of the specialty trade categories listed above, the bidder shall submit to the contracting unit a certificate signed by the bidder listing each subcontractor named in the bid for that category. The certificate shall set forth the scope of work for which the subcontractor has submitted a price quote and which the bidder has agreed to award to each subcontractor should the bidder be awarded the contract. The certificate shall be submitted to the contracting unit simultaneously with the list of the subcontractors. The certificate may take the form of a single certificate listing all subcontractors or, alternatively, a separate certificate may be submitted for each subcontractor. If a bidder does not submit a certificate or certificates to the contracting unit, the contracting unit shall award the contract to the next lowest responsible bidder.

f. Give full information about all of your contracts, whether private or government contracts, whether prime or sub-contracts; whether in progress or awarded but not yet begun; or where you are low bidder pending formal award of contract.

The information to be included on this document shall consist of at least the following:

(a) Owner

(b) Location

(c) Description

(d) Adjusted Contract Amount

(e) Amount Completed and Billed

(f) Additional Earned Since Last Estimate

(g) Balance to be Completed

(h) Estimated Date of Completion

(i) Totals of Items, D, E, F, G and H above

g. What equipment do you own that is available for and intended to be used on the proposed project?

The information to be included on this document shall consist of at least the following:

(a) Quantity

(b) Type of Equipment

(c) Description, Size, Capacity, etc.

(d) Condition

(e) Years of Service

(f) Present Location

h. What equipment do you intend to purchase or lease for use on the proposed work, should the Contract be awarded to you?

The information to be included on this document shall consist of at least the following:

(a) Quantity

(b) Type of Equipment

(c) Description, Size, Capacity, etc.

(d) Approximate Cost Purchase/Lease

i. Have you made contracts or received firm offers for all materials within prices used in preparing your Proposal? Do not give name of dealers or manufacturers.

The undersigned hereby declare(s) that the items of equipment in [q]uestion g are owned by _________________________, and are available for and are intended to be used on the Project, if awarded the Contract, and that he/they propose(s) to purchase or lease for the Project the additional items of equipment stated in Question h.

If awarded the Contract, the undersigned will furnish certificates from the owners of leased equipment to the effect that, in case of default of Contract, as set forth in NJSS Subsection 108.14, the Governing Body has the right to take over the leased equipment for use in completing the work.

STATE OF _________________

: ss.

COUNTY OF ________________

I, ___________ of the City of

__________, in the County of __________ and the State of _____________, of full age, having been duly sworn according to law, upon my oath depose and say

that:

I am ______________ of ____________________,

Title Name of Organization and that the answers to the foregoing questions and all statements therein contained are true and correct. Sworn and Subscribed to ___________________ the City of Jersey City before me this _____ day of __________, 200 .

SIGNATURE OF NOTARY PUBLIC

(Stamp and Seal)

My commission expires_________

3. FINANCIAL STATEMENT

(see no. 3 on page p-3)

ASSETS

Cash on Hand $______

Cash in Bank and Name of said Bank $______

Accounts receivable from $______ completed contracts Real Estate used for business $______ purposes Material in Stock $______ Equipment Book Value $______ Furniture and Fixtures $______ Other Assets $______

TOTAL ASSETS $______

LIABILITIES

Notes payable to Bank $______

Notes payable for Equipment $______ obligations Notes payable for other $______ obligations Accounts payable $______ Other Liabilities $______

TOTAL LIABILITIES $______

5. CORPORATION OR PARTNERSHIP STATEMENT

Chapter 33 of the Public Laws of 1977 provides that no corporation or partnership shall be awarded any State, County, Municipal or School Districts contract for purposes of any work or the furnishing of any materials or supplies unless prior to the receipt of the bid or accompanying the bid of said corporation or partnership there is submitted a statement. The statement shall set forth the names and addresses of all stockholders in the corporation or partnership who own ten percent (10%) of its stock of any class or of all individual partners in the partnership who own a ten percent (10%) or greater interest therein.

Incorporated:____ Partnership:____ Date:____ 200____

Legal Name of Bidder:_______________________

Business Address: Street, City, State and Zip Code Telephone:

Listed below are the names and addresses of all stockholders in the corporation or partnership who own ten percent (10%) or more of its stock of any class, or of all individual partners in the partnership who own a ten percent (10%) or greater interest therein.

Name:______________ Address:________________ Name:______________ Address:________________ Name:______________ Address:________________ Name:______________ Address:________________ Name:______________ Address:________________ Name:______________ Address:________________ Name:______________ Address:________________ Name:______________ Address:________________ Name:______________ Address:________________ Name:______________ Address:________________ Name:______________ Address:________________ Name:______________ Address:________________

We have no one person who owns ten percent (10%) or more of the corporat[ion] or partnership.

Signed:_________________

Title:__________________

6. BID GUARANTEE (SEE INFORMATION TO BIDDERS ARTICLE NO. 09)

7. CONSENT OF SURETY (SEE INFORMATION TO BIDDERS ARTICLE NO. 10)


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