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In re Petition of Thomas-United, Inc.

Superior Court of New Jersey, Appellate Division

June 28, 2013

IN THE MATTER OF THE PETITION OF THOMAS-UNITED, INC., REGARDING THE AWARD OF THE CONTRACT FOR THE ATLANTIC CAPE COMMUNITY COLLEGE CULINARY ARTS PROJECT, Appellant,
v.
ATLANTIC CAPE COMMUNITY COLLEGE, Respondent. TODD DEVIN FOOD EQUIPMENT, INC., Intervenor-Respondent.

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

Argued June 3, 2013

On appeal from the Board of Trustees of the Atlantic Cape Community College.

John F. Palladino argued the cause for appellant Thomas-United, Inc. (Hankin Sandman & Palladino; Evan M. Labov, on the briefs).

Louis J. Greco argued the cause for respondent Atlantic Cape Community College.

Robert E. Lytle argued the cause for respondent Todd Devin Food Equipment, Inc. (Szaferman, Lakind, Blumstein & Blader, P.C., attorneys; Mr. Lytle, on the brief).

Before Judges Fasciale and Maven.

PER CURIAM

Plaintiff Thomas-United, Inc. (Thomas), the second lowest bidder, appeals from the January 29, 2013 final decision of the Atlantic Cape Community College Board of Trustees (ACCC or the College), awarding its kitchen installation contract to Todd Devin Food Equipment, Inc. (Devin), the lowest bidder, for the Caesar Entertainment Wing for Hospitality & Gaming Studies Food Service Equipment Project, Re-Bid No. 1765R. We granted Thomas' application for a stay pending appeal, entered an order expediting the appeal, [1] then granted Devin's motion to intervene in the appeal.[2] We conclude that ACCC erred by determining that Devin's bid deviation was an immaterial and waivable defect, and by accepting a post-opening submission from Devin that altered its original proposal. We reverse.

The factual context in which the issues arise is undisputed. On or about July 9, 2012, ACCC issued Bid No. 1765 for the Food Service Equipment Project (Project). Two addenda were issued on July 20 and August 30, 2012, each incorporating the original bid documents. ACCC published a notice to bidders for the rebidding of the Project on or about November 7, 2012.[3]Along with this rebid notice, the College attached a bid submittal checklist, as it had with the original bid. On the same date, ACCC sent a letter directly to bidder Thomas informing it that the previously provided specifications and addenda applied to the rebid.

ACCC opened the bids on December 7, 2012. The two lowest bidders were Devin at $661, 000 and Thomas at $662, 492.[4] Devin submitted an incomplete New Jersey Department of Treasury, Division of Property Management and Construction Form 701 for Uncompleted Contracts (Form 701) that left blank the line certifying the amount of uncompleted contracts. As part of its bid, however, Devin submitted the required Bidder Qualification Form indicating $10, 000, 000 worth of work in progress and under contract.

On December 11, 2012, Thomas lodged a formal protest with the College seeking a rejection of Devin's incomplete bid and award of the contract to it, as the lowest responsive and responsible bidder. ACCC's counsel responded explaining that subsequent to the bid opening, Devin submitted a properly completed Form 701[5] indicating uncompleted contract totaling $9, 425, 000 against its authorized classification amount of $15, 000, 000. The letter further stated that

the blank space left on the Uncompleted Contracts form by . . . Devin . . ., does not rise to a level of a material defect such that waiver of it would adversely affect competitive bidding. The apparent clerical error does not raise concerns regarding the bidder's ability to perform the contract, nor does it appear to either place the bidder in a position of advantage over others or undermine competition.
Award of the contract to Devin has been recommended to the ACCC Board for action at its next meeting which is scheduled for December 18, 2012.

Following the ACCC board meeting at which the contract was awarded to Devin, Thomas petitioned the College to: (1) disqualify the bid submitted by Devin as non-responsive; (2) declare Thomas the lowest responsive and responsible bidder; and (3) award the contract to Thomas. The College adopted Resolution #46A on January 29, 2013 that denied the appeal and confirmed the award of the contract to Devin. This appeal followed.

On appeal, Thomas raises two arguments:

I. [Devin's] bid was non-conforming as demonstrated by its non-compliance with the clear letter of the College's bidding requirements and State Treasury regulations and the College's post-opening decision to permit . . . Devin to supplement its bid package.
II. The defect in . . . Devin's bid was material and non-waivable as it precluded the College from awarding a contract without a post-opening supplementation, provided an unfair advantage to . . . Devin, and frustrated the legislative policy that the public bidding process should remain open to public scrutiny.

I.

To begin, we briefly set forth the statutory and legal framework pertaining to public bidding. The bidding regulations for the ACCC Project are contained in the County College Contract Law, N.J.S.A. 18A:64A-25.1 to -25.43, as well as in the law promulgated for the Division of Property Management and Construction (DPMC or Division), Chapter 19, Classification and Prequalification of Firms, N.J.A.C. 17:19-2.13.

A.

Pursuant to N.J.S.A. 52:35-3, the DPMC preclassifies bidders that wish to become eligible to submit bids on public works projects. The classification process is conducted in accordance with the provisions of N.J.A.C. 17:19-2.1 to -2.7. See also N.J.S.A. 18A:18A-27. Each classified bidder's aggregate rating must be calculated in accordance with the formula prescribed by N.J.A.C. 17:19-2.8. The aggregate rating, which is based on a variety of financial factors, including the bidder's working capital, bonding capacity and performance rating, determines the amount of the proposed contract on which it may bid. N.J.A.C. 17:19-2.8. At the conclusion of the classification process, the DPMC issues the bidder a notice of classification that includes the maximum amount of public work on which it is qualified to bid

N.J.A.C. 17:19-2.13 provides, in pertinent part, as follows:

(a) A firm shall include with each bid a statement of the current value and status of its backlog of uncompleted construction work (not to include "non-at-risk" construction management contracts) as of the bid due date and a certification that the award of the subject contract would not cause the firm to exceed its aggregate rating.
(c) A firm shall not be awarded a contract which, when added to its backlog of uncompleted construction work, as shown on Form DPMC 701, would exceed the firm's aggregate rating. . . .
[(Emphasis added).]

DPMC Form 701 requires a bidder to certify as follows:

I [c]ertify that the amount of uncompleted work on ...

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