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Cetco Contracting Services Company v. Cumberland County Improvement Authority

May 17, 2011


On appeal from the Superior Court of New Jersey, Law Division, Cumberland County, Docket No. L-58-10.

Per curiam.


Submitted April 12, 2011

Before Judges Yannotti, Espinosa and Skillman.

Defendant R.E. Pierson Construction Company, Inc. (Pierson) appeals from an order entered by the Law Division on June 4, 2010, which denied its motion for summary judgment and granted a cross-motion by defendant Cumberland County Improvement Authority (Authority) to uphold its decision to reject all bids submitted on a contract for improvements to its solid waste facility. We affirm.


In September 2009, the Authority issued a public advertisement for bids on a contract for the Phase VI Lateral Cell Expansion at its Solid Waste Complex. In the instructions to bidders, the Authority stated that all general contractors and any subcontractor hired by such an entity would be required to complete a Contractor Responsibility Certification (CRC). In the CRC, each contractor would be required to verify, among other things, that it had a satisfactory record of past contract performance and law compliance "that demonstrates a solid history of both technical competency and business integrity sufficient to justify receiving" the contract.

The bidding instructions indicated that a contractor's failure to submit or complete the CRC would render it "ineligible for the prospective contract." Furthermore, a contractor's submission of false or misleading information in the CRC would "render the firm ineligible to perform work for the Authority and/or shall be considered a material breach of any contract entered and entitle the Authority to all applicable remedies available at law or in equity."

The Authority opened the bids on October 20, 2009. Pierson submitted the lowest bid, in the amount of $14,389,889, and CETCO Contracting Services Company (CETCO) submitted the next lowest bid, in the amount of $14,729,200. On November 24, 2009, the Authority adopted Resolution No. 2009-112, which awarded the contract to Pierson "in accordance with the specifications" and its bid. On December 2, 2009, the Authority provided Pierson with three copies of the construction contract for execution.

By letter dated December 8, 2009, CETCO wrote to the Authority and asked whether Pierson had identified Atlantic Lining Co., Inc. (Atlantic) in its bid as a subcontractor for the project and, if so, whether Pierson had submitted a CRC for Atlantic. CETCO informed the Authority that Atlantic's owner, Francis M. Taylor (Taylor), had previously pled guilty to federal tax fraud charges. Pierson returned the signed contracts to the Authority on December 22, 2009. The Authority then informed Pierson that it was required to submit completed CRCs for each of its subcontractors. Pierson submitted CRCs for Atlantic and its other subcontractors on January 15, 2010.

On that same date, CETCO filed a verified complaint in this matter and sought the issuance of an order to show cause with temporary restraints enjoining the Authority from proceeding with the contract. CETCO was apparently unaware that Pierson had provided the Authority with a CRC for Atlantic. CETCO alleged that the CRC had not been submitted. It also alleged that Atlantic could not submit a valid CRC because Taylor had been previously convicted of federal tax fraud "arising from and/or relating to public construction work[.]" CETCO claimed that Atlantic was not eligible to perform work on the project.

The trial court entered an order temporarily enjoining the Authority's award of the contract to Pierson pending further order of the court. The order also required the Authority and Pierson to show cause why a preliminary injunction should not be entered restraining the Authority from proceeding with the contract or, alternatively, enjoining Pierson from using Atlantic as a subcontractor on the project.

On February 2, 2010, the Authority held a meeting, and adopted a resolution pursuant to the Open Public Meetings Act (OPMA), N.J.S.A. 10:4-12(b), excluding the public from its discussion of the matters pertaining to "personnel, litigation and/or contractual negotiations." The Authority then adopted another resolution stating that all bids would be rejected, the project would be re-evaluated and new bids would be sought.

In the resolution, the Authority noted that previously it had passed a resolution stating that Pierson was the lowest responsible bidder on the contract and authorizing the execution of a contract with Pierson. The Authority noted, however, that CETCO had filed an action in the Law ...

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