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Allstate Office v. Division of Purchase and Property

July 5, 2011

ALLSTATE OFFICE INTERIORS, INC. AND OFFICE FURNITURE DEALERS ALLIANCE, PLAINTIFFS-APPELLANTS,
v.
DIVISION OF PURCHASE AND PROPERTY, DEPARTMENT OF THE TREASURY, STATE OF NEW JERSEY, AND DEPTCOR, A PUBLIC ENTITY WITHIN THE DEPARTMENT OF CORRECTIONS, STATE OF NEW JERSEY, DEFENDANTS-RESPONDENTS.



On appeal from the Division of Purchase and Property, Department of the Treasury.

Per curiam.

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

Argued Telephonically January 18, 2011

Before Judges Lisa and Reisner.

Appellant Allstate Office Interiors, Inc., is a seller of office systems and furniture. Appellant Office Furniture Dealers Alliance is an industry trade association representing sellers of office systems and furniture. Appellants seek review of the May 13, 2010 final decision of the Division of Purchase and Property (Division), in the Department of the Treasury.

The dispute involves the proposed purchase by another State agency, the Department of Health and Senior Services, of 250 stools for use in one of its buildings. State agencies are required to purchase any needed articles or supplies, when they are available, from an entity within the New Jersey Department of Corrections known as DEPTCOR, which are "manufactured or produced by institutional labor." N.J.S.A. 30:4-95. State agencies "shall not purchase any such supplies or articles from another source unless [DEPTCOR] shall first certify . . . that it cannot furnish the same or the equivalent thereof." Ibid. DEPTCOR purchased, through a public bidding process, component parts for the stools, which were then assembled by inmates. Thus, the Division deemed the desired items available from DEPTCOR for use by the Department of Health and Senior Services.

Appellants contend that the assembly of these component parts does not fall within the purview of N.J.S.A. 30:4-95, which requires that articles be "manufactured or produced" byinmates. The Division took a contrary view. In light of the legislative purposes of the statute and the common dictionary definitions of the words "manufacture or produce," the Division concluded that, in this context and with respect to the articles that are the subject of this dispute, "manufacture or produce" encompasses the assembly of the stools.

Appellants brought an action in the trial court seeking to prevent the sale of the stools from DEPTCOR to the Department of Health and Senior Services and to declare that assembly of component parts is not included in the statutory definition of "manufactured or produced." The matter was transferred to this court pursuant to Rule 1:13-4(a). The Division denied a stay of the proposed sale of the stools by DEPTCOR, and so did we. For the reasons that follow, we affirm the Division's determination.

I.

On February 26, 2009, the Division issued a Request for Proposal (RFP) for "Furniture - Unassembled, Unfinished Including Components - DEPTCOR." The RFP sought to obtain "bid proposals for any and all furniture, which is offered in the manner of 'ready to assemble', 'ready to finish', and/or the components for same." Under the heading "BACKGROUND," the RFP explained the intended purpose of this procurement:

State Use Industries intends to operate 17 industrial shops utilizing inmate employeesfrom nine correctional institutions. To meet this objective, it is the State's intention to operate furniture production facilities at [several specified State prisons]. Items produced in this facility will be shipped to DEPTCOR's Central Warehouse and offered for sale to DEPTCOR's customer base. Initially, DEPTCOR shall procure the items in component/kit form, requiring elementary assembly labor. As the business develops and experience with the product, production, and marketing improves, DEPTCOR shall purchase component items in a form requiring more intricate assembly, thereby enlarging its production operation and providing a greater number of meaningful work opportunities for the inmate population. [Emphasis added.]

The RFP required bidders to include an example of a manufacturer's generated time study for the completion of the assembly process "with anticipated learning curves" for at least one complex product. The example was to include "at least siX (6) individual steps for assembly and completion with an exploded view of the product that will be suitable for use at the inmate level of manufacturing." (Emphasis added).

The record before the Division, and which is now before us, includes a step-by-step description of the assembly process of the stools. The components must be assembled in a particular manner and in a particular sequence. Several of the steps require the use of hand tools.

Appellants urged the Division to determine that this relatively minor assembly process did not fall within the statutory meaning of manufacturing or producing the stools. Appellants argued before the agency that to manufacture or produce requires the creation of articles from "raw materials," a term used in an accompanying statute, N.J.S.A. 30:4-98. More particularly, that provision confers on DEPTCOR the authority to "[p]rocure and install in each institution the machinery and equipment and furnish the tools, supplies, raw materials, seeds, fertilizers and articles necessary for the operation of the assigned industries and performance of the assigned occupations and vocations with relation to the determined standards ...


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