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A&A Industrial Piping, Inc v. County of Passaic and Tomar Construction L.L.C

April 25, 2012


On appeal from Superior Court of New Jersey, Law Division, Passaic County, Docket No. L-1206-11.

Per curiam.


Argued March 7, 2012

Before Judges Fuentes, Koblitz and Haas.

Appellant A&A Industrial Piping, Inc. (A&A) appeals from the May 10, 2011 order authorizing Passaic County to reject all bids for installation of upgrades to the heating, ventilation and air conditioning (HVAC) and fire protection systems for the Passaic County Jail, Phase II (Project), and allowing a rebid. A&A maintains that the re-bid is not statutorily permitted, and thus as the lowest responsible bidder, A&A must be awarded the contract. After reviewing the record in light of the contentions advanced on appeal, we affirm.

In December 2010, a Notice to Bidders for the Project advised that sealed bids would be accepted on January 5, 2011. Part I of the Notice is divided into three sections. The first section contains the specifications as prepared by the Passaic County Procurement Center. The second section consists of the Instructions to Bidders and General Conditions issued by the State of New Jersey Department of Treasury, Division of Property Management and Construction (DPMC Specifications), advising bidders of the requirements for state contracts. The third section contains the County's Supplementary Specifications (County Specifications), which includes amendments and revisions to the DPMC Specifications, including the elimination of the section requiring pre-qualification of bidders and subcontractors.

Tomar Construction (Tomar) was the lowest bidder by more than $1,000,000 at $4,245,000. A&A was the second lowest bidder. Tomar's bid, as required, included the names of subcontractors it intended to use on the Project. Tomar identified itself as the contractor to perform the project's HVAC and structural steel work. Although Tomar provided licensing documentation for its plumbing and electrical subcontractors,*fn1 and a business permit for the sprinkler system installer, it failed to provide any evidence that it was qualified to perform HVAC or structural steel work. A&A's bid indicated its intention to use a subcontractor for the structural steel portion of the project. Its bid listed its subcontractors and included documentation from the DPMC and other state agencies and trade organizations to evidence its subcontractors' qualifications.

On January 10, 2011, A&A protested the County's consideration of Tomar's bid, asserting the bid was materially defective under N.J.S.A. 40A:11-23.2. Specifically, A&A challenged Tomar listing itself as the structural steel contractor because it was not qualified by the DPMC to perform such work.*fn2 A&A also advanced a related argument that Tomar violated N.J.S.A. 40A:11-16 by listing itself as the structural steel contractor when it likely intended to use a subcontractor to perform the work.

Tomar responded on January 13, 2011. Tomar's letter referred A&A to the portion of the County Specifications that eliminated the bidder pre-qualification requirement found in the DPMC Specifications. Tomar also indicated it was "well qualified to carry out structural steel work." Tomar provided evidence of its capacity to perform such work and its experience.*fn3

Pursuant to the recommendation of the Passaic County Engineer, the Passaic County Board of Chosen Freeholders adopted a resolution on February 8, 2011, that rejected all bids, authorized a re-bid and announced the project specifications would be revised in accordance with the engineer's recommendation "to include pre-qualification requirements for contractors and subcontractors which were inadvertently omitted previously[.]"

On March 15, 2011, A&A filed an order to show cause contesting the resolution's legality. The trial judge denied the order to show cause, dismissed the accompanying complaint and approved the resolution authorizing a re-bid.*fn4

The judge determined that the County's project specifications mistakenly omitted a bidder pre-qualification requirement and that Tomar relied on this omission in preparing and submitting its bid. The judge concluded that the County's decision to incorporate the DPMC's pre-qualification requirement justified a rejection of previously received bids and a re-bid under N.J.S.A. 40A:11-13.2(d).

"A municipality has a well-recognized right to reject all bids received for a public project." PENPAC, Inc. v. Morris Cnty. Mun. Utils. Auth., 299 N.J. Super. 288, 295 (App. Div.), certif. denied, 150 N.J. 28 (1997) (citations omitted). While this right is a "discretionary privilege," it is "not without limit." Id. at 296 (quoting Bodies by Lembo, Inc. v. Cnty. of Middlesex, 286 N.J. Super. 298, 308 (App. Div. 1996)).

When assessing the validity of bid rejections, the scope of appellate review is limited. Id. at 297. A municipal body's decision may not be overturned unless the reviewing court finds "the decision was arbitrary, capricious and unreasonable." Ibid. (quoting Palamar Constr., Inc. v. Twp. of Pennsauken, 196 N.J. Super. 241, 250 (App. Div. 1983)). "'Even when doubt is entertained as to the wisdom of the action, or as to some part of it, there can be no judicial declaration of invalidity in the absence of clear abuse of discretion by ...

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