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Brockwell & Carrington Contractors, Inc. v. Dobco, Inc.

Superior Court of New Jersey, Appellate Division

December 26, 2013

BROCKWELL & CARRINGTON CONTRACTORS, INC., Plaintiff-Appellant/ Cross-Respondent,
v.
DOBCO, INC., Defendant-Respondent/ Cross-Appellant, and CARLSTADT EAST RUTHERFORD BOARD OF EDUCATION, APS CONTRACTING, INC. and PIKE CONSTRUCTION CO. LLC, Defendants.

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

Argued September 30, 2013

On appeal from Superior Court of New Jersey, Law Division, Bergen County, Docket No. L-8541-11.

Robert T. Lawless argued the cause for appellant/cross-respondent (Hedinger & Lawless, L.L.C., attorneys; Mr. Lawless, on the briefs).

Charles F. Kenny argued the cause for respondent/cross-appellant (Peckar & Abrahamson, P.C., attorneys; Mr. Kenny, on the briefs; Michael E. Smilow, on the briefs).

Lindabury, McCormick, Estabrook & Cooper, P.C., attorneys for respondent Carlstadt East Rutherford Board of Education (Dennis McKeever, on the letter brief).

Before Judges Yannotti, St. John and Leone.

PER CURIAM

In this appeal, which arises from the award of a school construction contract pursuant to the New Jersey public bidding laws, the central issue is whether the fourth-lowest bidder can bring suit directly against the lowest bidder challenging the award and seeking money damages. For the reasons that follow, we conclude that the bidder's complaint was properly dismissed.

I.

We review the facts and procedural history in the light most favorable to plaintiff. On September 1, 2001, the Carlstadt-East Rutherford Board of Education (Board) opened competitive bidding for a renovation project at Becton Regional High School (the Project). Dobco, Inc. (Dobco) was the lowest numerical bidder, followed by APS Contracting, Inc. (APS), Pike Construction Co., LLC (Pike), and Brockwell & Carrington Contractors, Inc. (Brockwell). Dobco was then awarded the Project contract (the Contract).

Dobco's bid submission identified Environmental Climate Control, Inc. (ECC) as its heating, ventilation and air-conditioning subcontractor for the Project. In connection with that submission, ECC tendered two documents: a notice of classification and "State of New Jersey Form DBC 701" (Form 701). Both forms are required before a contractor or subcontractor may become eligible to submit bids on public works projects. In order to place the controversy before us in the proper context, we briefly summarize the applicable public bidding laws.

Pursuant to N.J.S.A. 52:35-3 and 18A:18A-27, the Division of Property Management and Construction (DPMC) classifies 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 -2.13. 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 a bidder may bid. Ibid. At the conclusion of the classification process, DPMC issues the bidder a notice of classification that includes the maximum amount of public work on which it is qualified to bid.

A school board "can only accept bids from those 'qualified in accordance with such classification.'" Advance Elec. Co. v. Montgomery Twp. Bd. of Educ., 351 N.J.Super. 160, 175 (App. Div. 2002)(quoting N.J.S.A. 18A:18A-26). To ensure compliance, every bidder must certify via Form 701 that the bid proposal, "when added to its backlog of uncompleted construction work, " will not exceed the aggregate rating. N.J.A.C. 17:19-2.13. A bidder may not be awarded a contract which would exceed its aggregate rating. N.J.A.C. 17:19-2.13(c). We have interpreted these requirements to be equally applicable to subcontractors. See Brockwell & Carrington Contractors, Inc. v. Kearny Bd. of Educ., 420 N.J.Super. 273, 280 (App. Div. 2011).

Here, the contract was awarded to Dobco on September 6, 2011. Brockwell's attorney contacted counsel for the Board, Dennis McKeever, on September 9 to raise concerns over ECC's aggregate rating. By letter to the Board dated September 13, Brockwell formally protested the award, asserting that ECC was not qualified to participate in the Project because the value of its subcontract, when combined with its outstanding projects, would place ECC above its aggregate rating limit. ECC's ineligibility, argued Brockwell, rendered Dobco's bid materially deficient and thus precluded the Board from legally awarding Dobco the Contract.

Dobco and ECC subsequently provided the Board with additional information to demonstrate that ECC was, in fact, qualified to perform the contract. Brockwell alleges that these submissions contained inaccurate, incomplete and misleading information for the purpose of inducing the Board to award the contract to Dobco. According to Brockwell, the Board's "duly authorized representative" also determined that APS and Pike's bids were materially deficient.

McKeever contacted Brockwell's attorney on October 4 and explained that the Project would proceed with Dobco. On October 14, some six weeks after the contract had been awarded, Brockwell filed an order to show cause with verified complaint seeking to enjoin Dobco and the Board from moving forward on the contract. Brockwell also sought declaratory relief that Dobco's bid was materially deficient, and the award was null and void. Brockwell contended that the Dobco, APS and Pike bids failed to conform to the bid specifications, and, therefore, it was entitled to the award of the contract as the lowest responsive bidder.

After the motion judge denied Brockwell's application, it sought permission from this court to file an emergent motion, which was granted on October 20, 2011. We then denied the requested relief, concluding that Brockwell failed to demonstrate a likelihood of success on the merits and that the harm to defendants of staying the project outweighed any harm to Brockwell.

Brockwell having earlier declined defendants' request to dismiss the action, on December 16, 2011, Dobco served the first of two frivolous claim letters. On January 5, 2012, Brockwell stipulated to the dismissal of the Board from the lawsuit. One week later, Brockwell filed its initial amended complaint. The first count alleged that the Board's "duly authorized representative" had deemed the bids of co-defendants APS and Pike "materially deficient" and sought a declaration that the Board could not legally award the Project contract to either company. The sole evidence presented in ...


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