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Titan Management Group, LLC and Delfina Palhete Barbosa v. State of New Jersey

November 20, 2012

TITAN MANAGEMENT GROUP, LLC AND DELFINA PALHETE BARBOSA, PLAINTIFFS-APPELLANTS,
v.
STATE OF NEW JERSEY, DEPARTMENT OF TREASURY, DIVISION OF PROPERTY MANAGEMENT AND CONSTRUCTION; MVC EQUITIES, LLC AND HILLSIDE OFFICE PARK, LLC, DEFENDANTS-RESPONDENTS.



On appeal from the State of New Jersey, Department of Treasury, Division of Property Management and Construction.*fn1

Per curiam.

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

Submitted September 19, 2012 -

Before Judges Messano, Lihotz and Kennedy.

Plaintiffs Titan Management Group, LLC and Delfina Palhete Barbosa (collectively, Titan) appeal from an August 3, 2010 final decision of the Director, Division of Property Management and Construction (the DPMC), a unit of the Department of Treasury that handles leases for the State. The Director's decision rejected Titan's challenge to the DPMC's award of a contract to defendant MVC Equities, LLC (MVC) to lease office space for a State agency. Titan argues the bid award to MVC and the rejection of its challenge to that decision were arbitrary and capricious because MVC's bid was non-conforming and not the most cost-effective bid submitted. We are not persuaded and affirm.

I.

The DPMC issued a request for proposal (RFP) to lease 20,000 to 22,000 square feet of commercial office space for a period of ten years, to be used by what is now known as the Division of Child Permanency and Protection (the Division). The Division was occupying Titan's building pursuant to a lease that expired on April 30, 2010.

In addition to seeking proposals through newspaper advertisements, the DPMC relied on its database of Property Profile Forms, N.J.A.C. 17:11-5.4(a). The RFP set forth the necessary specifications, including a required "minimum of 175 parking spaces[.]" The parking requirements included a provision stating spaces needed to be "in close proximity to the proposed building[,]" barrier free, eight feet wide, and compliant with the Americans with Disabilities Act, 42 U.S.C.A. §§ 12101 to 12213.

The four responding potential bidders each completed a Leased Space Proposal Form (LSPF). Each LSPF contained the proposed lease terms and a detailed cost analysis setting forth the proposed unit rate for identified categories of expenses. The DPMC eliminated one proposal as not qualifying, leaving Titan, MVC, and defendant Hillside Office Park, LLC (Hillside) as the remaining bidders.

On March 11, 2010, the DPMC requested the prospective bidders to file their best and final offers (BAFOs). A DPMC employee mistakenly sent MVC an attachment with Titan's proposal information, and sent Titan an attachment with MVC's proposal information. MVC contacted the DPMC regarding the error and both Titan and MVC agreed to continue their respective participation in the process.

On April 14, 2010, the DPMC issued a notice of intent (NOI) to award the lease to MVC, which it determined had submitted the most cost-effective bid. The NOI outlined the proposed terms and conditions of the lease and provided the procedure for filing written challenges, which were required to be submitted "no later than the close of business, Wednesday, April 28, 2010."

Titan had received an email advising "the spread between [its] proposal and the most cost effective [proposal] . . . [was] approximately $51,000 per year"; however, Titan did not receive the NOI. The DPMC responded to Titan's April 28, 2010 facsimile, noting the NOI was mistakenly sent to an incorrect address. Titan immediately faxed its intent to challenge the proposed award of lease to MVC, arguing the DPMC miscalculated the most cost-effective lease proposal.*fn2 Titan awaited a divisional review of its bid challenges and expected notice of assignment of the matter to a hearing officer.

Titan's challenges asserted its proposal was "financially superior to MVC's proposal [and] me[t] the State's goals of reducing costs, converting to environmentally safe forms of energy and providing a safe work environment." Specifically, Titan maintained the DPMC erred because:

* The State incorrectly calculated, to Titan's detriment in the review, the energy savings offered to the State by Titan;

* The State did not account for the "cost to move and furniture . . . [of] $150,000" to relocate to MVC's property . . . in evaluating the "cost efficiency" of simply remaining in the current location under the new lease terms set forth in Titan's proposal; and

* The State failed to account for the holdover tenancy costs that will be incurred under its current lease with Titan, in addition to its lease payment obligation to MVC ...


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