October 26, 2012
IN RE: BID PROTEST OF FIRE PROTECTION SYSTEMS INSPECTION, MAINTENANCE/REPAIR AT VARIOUS NJDMAVA FACILITIES (PROJECT VV113)
On appeal from the Department of Military and Veterans Affairs.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Submitted October 11, 2012
Before Judges Sapp-Peterson and Haas.
Appellant, Absolute Protective Systems, Inc. (Absolute), appeals from the February 13, 2012 final decision of the Department of Military and Veterans Affairs (DMAVA) upholding the award of a contract to Oliver Fire Protection and Security (Oliver) for the maintenance, repair and inspection of fire protection systems at various DMAVA facilities. After reviewing the record in light of the contentions advanced on appeal, we affirm.
DMAVA is responsible for maintaining New Jersey National Guard armories and other military and veterans' facilities. N.J.S.A. 38A:3-6(g). It is authorized to advertise for bids and enter into contracts for the performance of services necessary to maintain these facilities. N.J.S.A. 38A:12-3.
In 2011, DMAVA issued a request for proposals (RFP) on a contract to provide fire protection systems inspection, maintenance, and repair services at approximately fifty-seven DMAVA facilities located throughout New Jersey. The RFP set forth detailed instructions for the bidders on the bidding process, the information and documentation to be submitted in the bids, and the manner in which the bids would be evaluated. The contract would be for a one-year period although, at DMAVA's option, there could be up to four, one-year extensions of the contract.
Under the terms of the RFP, the contractor would be required to perform both "scheduled" and "on call" services in order to "maintain proper function of equipment in all designated locations." Bidders were required to visit each DMAVA facility, inspect the character and condition of the equipment to be serviced, and complete a "facility site visit worksheet" for each facility. The worksheet contained spaces for the name of the facility visited, the signature of the "facility representative" and the different categories of equipment that could be found at each site. Bidders were asked to report the number of fire protection systems located in each facility on the worksheet and submit the worksheet with their bid.
The bidders were required to provide their proposed costs for eighteen different aspects of the project. Thus, for example, bidders were asked to include the costs for scheduled work, such as annual inspections of wet and dry sprinkler systems, fire hydrants, deluge sprinkler systems and other equipment tests. For these specific systems and equipment, a fixed price estimate was required. There was also an "on call" component of the contract, where services were not scheduled in advance. For these "on call" maintenance and repair services, the bidders were required to submit the hourly rates to be charged when these services were provided during, and after, regular business hours.
On September 15, 2011, DMAVA conducted a mandatory pre-bid meeting with prospective bidders. The agency's final decision states that, at this meeting, the bidders were advised it was not necessary for them to give "actual quantities" on the worksheet of all of the systems found during the pre-bid site inspections. Instead, DMAVA was merely "looking for an affirmation that the bidding contractor had visited the facility and conducted an inspection."
On October 3, 2011, DMAVA issued the first of two addenda to the RFP. The first addendum advised bidders the Consolidated Logistics Training Facility (CLTF) at Joint Base Lakehurst was to be included in the pre-bid site inspections and that the facility's deluge systems and pumps were to be included in their estimate, even though these systems were not currently operating. The second addendum, issued on October 12, 2011, answered bid questions the agency had received from various potential bidders.
On October 20, 2011, DMAVA opened the four bids it had received in response to the RFP. The four bidders were Oliver, Absolute, Kratos and Seaboard Fire. The Seaboard Fire bid was determined to be non-responsive and it was rejected. The remaining three bids were found to be complete and responsive.
A three-member committee of DMAVA project managers independently reviewed and scored the bids. Among other things, the committee members compared the bidders' quoted prices. For the fifteen fixed price items, Oliver's base contract price was $83,635.90, while Absolute's price was $118,850, with Kratos at $234,500. DMAVA stated that the hourly rates submitted for the remaining categories were also considered, but noted the RFP "specifically identified a minor maintenance work limitation of $2,000" and that "a written proposal would be required . . . for any proposal in excess of" that amount. Oliver's hourly rate was $140 for service calls during regular business hours and $205 for after hours calls. Absolute's hourly rates were $80 and $120, respectively. The bidders' costs for maintaining portable fire extinguishers had only minimal differences. The three committee members all found that "Oliver has the most cost effective proposal to the State."
The committee also considered the bidders' specialized experience and technical competence in fire protection maintenance, experience with conducting fire inspections in older buildings, available manpower, and ability to work cooperatively with government military and civilian personnel. Two committee members "rated Oliver as the best technical proposal," while one rated Absolute as the best. Based upon the majority of the reviewers' findings, the committee determined that "Oliver has the superior technical proposal."
On November 22, 2011, DMAVA issued a notice of intent to award the contract to Oliver "in the initial amount of $83,635.90." On December 21, 2011, the agency formally awarded the contract to Oliver. Absolute filed a bid protest on December 26, 2011. It raised the same arguments as it does in the current appeal, and asserted that Oliver's bid was non-responsive and DMAVA should have rejected the bid and awarded the contract to Absolute.
On January 30, 2012, DMAVA held a hearing to consider Absolute's
protest. In a written decision issued on February 13, 2012,*fn1
DMAVA denied the protest and confirmed the award of the
contract to Oliver.
Absolute filed a notice of appeal from DMAVA's decision. We granted Absolute's motion to accelerate the appeal.
Certain basic principles of public bidding law guide our review. As our Supreme Court has noted, "[p]ublic bidding statutes exist for the benefit of taxpayers, not bidders, and should be construed with sole reference to the public good."
Nat'l Waste Recycling, Inc. v. Middlesex Cnty. Improvement Auth., 150 N.J. 209, 220 (1997). N.J.S.A. 52:34-12(g) prescribes that when the State advertises a contract and accepts bids, the award of the contract "shall be made . . . to that responsible bidder whose bid, conforming to the invitation for bids, will be most advantageous to the State, price and other factors considered."
One of the key functions of the contracting State agency is ascertaining whether each bidder on a contract is a responsible bidder and whether each submitted bid conforms to the requirements of the RFP. Through bid conformity and bidder responsibility review, "the contracting unit is assured of equality among bidders, of the financial and ethical ability of the bidders to perform, and of performance of the contract in accordance with the RFP." In re Protest of the Award of the OnLine Games Prod. and Operation Servs. Contract, 279 N.J. Super. 566, 593 (App. Div. 1995). "The preliminary inquiry is whether the bid deviates from the RFP. If there is no deviation, the bid must be deemed conforming. If there is a deviation, a decision must be made as to whether it is material and can be waived." Id. at 594.
Our scope of review of a State agency's determinations concerning the awarding of contracts and the determination of bidder responsibility and bid conformity is limited. When reviewing an agency's determinations in this area, we consider whether the determination was "arbitrary or unreasonable." DGR Co. v. State, Dep't of Treasury, 361 N.J. Super. 467, 474 (App. Div. 2003).
We now examine Absolute's arguments to set aside DMAVA's award of the contract to Oliver with these deferential principles in mind.
Absolute first contends that Oliver's bid did not conform to the RFP because it "failed to demonstrate that it had visited all of the facilities on the Facilities Worksheets; failed to include all of the various items of services to be performed at the facilities, and otherwise failed to properly complete them." Absolute bases this claim upon documents it received from DMAVA in response to an Open Public Records Act (OPRA) request for a copy of Oliver's submissions. According to the documents Absolute received, Oliver had not visited eight of the fifty-seven facilities.
However, DMAVA had a complete facility site visit worksheet, signed by Oliver, in its contract file. This worksheet listed all of the facilities covered by the contract. Further investigation by DMAVA revealed that, when it responded to Absolute's OPRA request, "it inadvertently omitted" a copy of the page pertaining to the eight facilities at issue. Thus, DMAVA found that Oliver had visited all of the facilities as required. While the error in responding to Absolute's OPRA request was unfortunate, we cannot find that DMAVA's conclusion that Oliver's bid conformed to the RFP requirement for site visitation was unreasonable under the circumstances.
Absolute had previously performed the work called for in the RFP for DMAVA under prior contracts. Accordingly, it was aware of the number and nature of the different types of equipment and systems in each facility. It submitted a chart to DMAVA indicating that the equipment and systems identified by Oliver during its site inspections did not match up with what was actually in the facilities. The RFP provided that the successful bidder's facility site visit worksheet was to become part of the contract. Therefore, Absolute argues Oliver's bid was non-conforming because it did not list all of the equipment and systems it would need to inspect, maintain and repair under the contract.
We disagree. The RFP made clear that "[a]ny failure by the BIDDER to acquaint themselves with the conditions of the site will not relieve them from responsibility for estimating properly the difficulty or cost of successfully performing the work." Thus, a complete count of the equipment and systems was not required for the bidders to determine a cost estimate as part of their bid. Thus, no bidder was required to provide "actual quantities" of equipment or systems in their bids.
DMAVA also explained that at least some of the discrepancies between Absolute's count and that submitted by Oliver were accounted for when the missing worksheet page was considered. In any event, because "actual quantities" were not required, we defer to the agency's determination that Oliver's bid conformed to the RFP.
Absolute next contends Oliver's bid excluded physical work items that it was required to include in its bid. Specifically, the October 3, 2011 addendum to the RFP required the bidders to inspect "the CLTF at Joint Base Lakehurst." It also stated that "Lakehurst Bldg 307 (on your list now) has 4 special hazard systems (Deluge) and 3 pumps (outside the pump house) that are not currently in operation. Include them in your estimate."
In its facility site visit worksheet for this facility, Oliver noted "4" in the column for "Deluge" and "3" under the column for "Pump." Under each number, there is a notation that reads "not included." Absolute argues that Oliver's bid, which contained the worksheet bearing this notation, was not submitted until after the October 3, 2011 addendum was issued that required bidders to include these systems in their estimate. Absolute contends that this notation meant that Oliver had "not included" these systems in its estimate, which rendered the bid unresponsive and non-conforming. Again, we disagree.
As the addendum noted, the Lakehurst systems were already on the list of systems that needed to be visited. However, these systems were not in operation at the time the contract was being bid. This could reasonably explain why a notation of "not included" was made.
Moreover, DMAVA expressly advised the bidders it was not critical that they accurately count all of the systems on the worksheet. Rather, the purpose of the worksheet was to ensure that the bidders visited each site. Thus, no bidder was required to include any notations in the columns in question. Even assuming that the notation meant the bid deviated from the RFP, this would obviously be a non-material deviation which would not have placed one bidder in "a position of advantage over other bidders." On-Line Games, supra, 279 N.J. Super. at 594-95. As DMAVA made clear, the notations were immaterial to the bidding process. What was "critical" was that the bidder "affirm that [it] had visited the facility and conducted the inspection." Oliver clearly met this requirement, as confirmed by the signature of the Lakehurst facility representative that appears on the worksheet.
Finally, the addendum only required the bidder to include the cost for maintaining the then-inactive Lakehurst systems in its estimate, not in the worksheet. As DMAVA explained in its decision denying the bid protest, "work on the deluge and pumps is a requirement of the awarded contractor and Oliver may not claim this as being outside the contract requirements since it is specifically addressed as a work item in the addendum." Thus, Absolute's argument to the contrary must be rejected.
Along these same lines, Absolute argues that Oliver's worksheet had "breakdowns" of equipment and systems "on different signed pages" and the worksheets contained "markings, numbers, cross-outs, stray words and even had information added to their reverse sides." Based upon this observation, Absolute contends that it was not possible for the agency to make a reasoned evaluation of Oliver's bid.
As discussed above, however, the purpose of the worksheet was to ensure that the bidders visited each facility, not to provide a complete count of the existing equipment and facilities. Therefore, any extraneous notations had no effect on the bidding process.
In addressing Absolute's contention, DMAVA acknowledged "that Oliver submitted three copies of the facility bidder worksheet with various locations signed on different sheets." There was, however, nothing in the RFP that prohibited the submission of multiple worksheets, so long as the submission "affirmed" the bidder had visited the facilities. DMAVA confirmed that "a review of the three copies indicates that Oliver did have a signature [of the facility representative] for each location as required by the RFP." Thus, Absolute's contention that Oliver's bid was non-conforming lacks merit.
Absolute next argues that DMAVA only considered the fixed cost estimates submitted by the bidders and ignored the hourly rates they would charge for "on call" maintenance and repair work. The record, however, indicates otherwise.
There is no dispute that Absolute's hourly rates for "on call" services both during and after regular working hours were less than those submitted by Oliver. However, the public bidding laws do not require that a contract automatically be awarded to the lowest bidder, either on the entire contract price or a component part thereof. Instead, contracts are awarded to the bidder whose performance "will be most advantageous to the State, price and other factors considered." N.J.S.A. 52:34-12(g). Thus, it was not unreasonable for DMAVA to reject Absolute's claim that it was entitled to be awarded the contract simply because it submitted a lower proposal for the "on call" services.
Moreover, DMAVA explained that it had considered the hourly rates in determining to award the contract to Oliver. Although Absolute's rates were lower, the hourly rates would only be for repair and maintenance work, not for the installation of new systems, which would have necessitated more hours and higher costs.*fn2 Thus, the record reflects this was not going to be a major expenditure under the contract. The RFP also "specifically identified a minor maintenance work limitation of $2,000 and a written proposal would be required . . . for any proposal in excess of $2,000." Thus, adequate controls were built into the contract to control the costs that would be generated from the type of services for which hourly rates would be charged.
Finally, it is important to note that there was an approximate $35,200 difference in fixed costs between Oliver's bid and Absolute's higher bid. There was a $60 difference and an $85 difference, respectively, in the hourly rates in Absolute's favor between the two bidders for regular and after working hours, "on call" services. Thus, DMAVA determined that Oliver's overall bid was still the most cost effective, because it would have taken over 585 regular working hours service calls, or over 400 after hours service calls, to close the fixed cost gap between the two bidders. Because there was a $2,000 minor maintenance work limitation, and because the contract was for one-year and could only be extended in one-year increments, enabling the agency to more easily control costs, it was not unreasonable or arbitrary for DMAVA to conclude that Oliver's bid was the most cost effective.
Finally, Absolute questions the methodology the review committee used to evaluate the bidders. It complains that DMAVA should have used a total aggregate scoring system to rank the bidders. Instead, each of the three committee members independently reviewed the bids and prepared a separate score sheet. All three reviewers found Oliver to be the most cost effective and two of the three found that Oliver presented the best overall technical proposal.
There was no requirement that the bids be evaluated or scored only in the manner suggested by Absolute. The RFP provided that DMAVA's evaluation would be "based on price and technical factors." Those were the two factors highlighted by the review committee members. The RFP also stated that the agency's "selection of the best value contractor is based upon an integrated assessment of the [described] criteria to determine the most highly qualified Contractor." In the assessment, "[e]ach criterion will be assigned a numerical rating, based on the risk to [DMAVA] that the firm will successfully perform the contract in view of the factor being evaluated. An overall consensus rating will be given to each submission."
We perceive no abuse of discretion in the method chosen by DMAVA to compare the bidders. As required, we accord considerable deference to the agency in choosing to award the contract to a particular responsible bidder. DMAVA's evaluation methodology was fully explained to the parties and it was scrupulously followed.