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Surety Mechanical Services v. Bridgeton Board of Education

Superior Court of New Jersey, Appellate Division

December 11, 2013



Argued September 25, 2013

On appeal from the Superior Court of New Jersey, Law Division, Cumberland County, Docket No. L-117-13.

John F. Palladino argued the cause for appellant (Hankin, Sandman & Palladino, attorneys; Mr. Palladino and Evan M. Labov, on the briefs).

Matthew W. Ritter argued the cause for respondent (The Ritter Law Office, attorneys; Mr. Ritter, on the brief).

Before Judges Sapp-Peterson and Hoffman.


Plaintiff Surety Mechanical Services (Surety) appeals from the trial court order dismissing its verified complaint and order to show cause (OTSC) in which it sought an order: (1) invalidating a resolution adopted by defendant Bridgeton Board of Education (Board) rejecting all bids it received in connection with a bid invitation to upgrade the Bridgeton High School heating, ventilation and air conditioning (HVAC) systems; and (2) compelling the Board to award the contract to it as the lowest bidder. We affirm.

On November 8, 2012, the Board published a Bid Invitation and Notice to Bidders to upgrade its high school HVAC system. Bids were received and opened on December 13, 2012. Plaintiff's bid was submitted at $4, 499, 170. Although a lower bid had been submitted, it was materially defective. As such, plaintiff's bid was the lowest. However, by resolution dated January 8, 2013, the Board rejected all bids, stating: "Motion by Ms. Bernstein, second by Mrs. Peterson approving the rejection of the BHS HVAC Bids in accordance with N.J.S.A. 18A:18A-22." The Board will modify the scope of work for the control panel and re-bid the project. Motion carried, roll call vote was 6-0.

Two days later, the Board notified bidders that all bids had been rejected and that the specifications would be revised and the project re-bid. When it released the revised specifications, the only change in the specifications was reflected in the identity of the automatic temperature control (ATC) manufacturers, which was originally identified in the bid invitation as Honeywell International (Honeywell). As revised, the manufacturers included Siemens Building Technologies and Johnson Controls, in addition to Honeywell.

Plaintiff filed its verified complaint and OTSC on January 30, 2013 seeking to invalidate the resolution rejecting the bids and to restrain the Board from awarding the HVAC project based upon its January 14, 2013 invitation to bidders to re-bid. The court entered an order permitting the Board to accept bids but restrained it from granting an award. On the OTSC return date, the court took testimony, and at its conclusion dissolved the prior restraints by order dated February 19, 2013. Thereafter, the court denied plaintiff's application for a stay of its order.

Plaintiff filed an emergent application before this court seeking a stay. We denied the stay. Following an emergent application before the Supreme Court and its remand to this court for review of the emergent application, we granted a stay of any contract award pending disposition of the merits of plaintiff's appeal by this court.

The essence of Surety's argument on appeal is that there was no legitimate basis to re-bid the project; thus, it may reasonably be inferred the Board's action reflects a bias against it. Additionally, plaintiff contends, having articulated one reason for rejecting all bids, the Board was precluded from raising, as another reason to reject all bids, the fact that the estimated costs exceeded the projected budget recommended by the Schools Development Authority (SDA), N.J.S.A. 52:18A-237, the public entity providing the funding for the project. Consequently, plaintiff urges the trial court erred in dismissing its complaint at the pleading stage.

To support this contention plaintiff points to a number of facts, which it argues are undisputed. First, plaintiff references the initially articulated reason advanced by the Board as the basis for rejection of the bids, namely, its intent to modify the scope of the work to be performed. Second, plaintiff references the revised bid invitation in which the only change in the scope of the work was the inclusion of two additional control manufacturers. Third, plaintiff notes that in response to its verified complaint and OTSC, the Board submitted a letter brief in which it stated: "What counsel for Surety Mechanical Services failed to indicate to the Court was that the re-bid was based upon a substantial change in the specifications that removed the proprietary requirement for the HVAC controls on this project." Third, plaintiff, points to Paragraph 2.2 of the bid invitation, labeled "PRODUCT SUBSTITUTIONS, " which states:


A. Whenever a product or system is identified on the drawings or in the specifications by reference to manufacturers' or vendors names, trade names, catalog numbers, or the like, it is so identified for the purpose of establishing a basis of design and shall not be construed as limiting competition. Any product or system or other manufacturers or vendors which will perform adequately the duties imposed y he general design will be considered equally acceptable provided the material, ...

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