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

116 A.3d 1091, 441 N.J. Super. 148, 2015 N.J. Super. LEXIS 93
CourtNew Jersey Superior Court Appellate Division
DecidedJanuary 13, 2015
StatusPublished
Cited by3 cases

This text of 116 A.3d 1091 (Dobco, Inc. v. Brockwell & Carrington Contractors, Inc.) is published on Counsel Stack Legal Research, covering New Jersey Superior Court Appellate Division primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Dobco, Inc. v. Brockwell & Carrington Contractors, Inc., 116 A.3d 1091, 441 N.J. Super. 148, 2015 N.J. Super. LEXIS 93 (N.J. Ct. App. 2015).

Opinion

BARISO, A.J.S.C.

This application raises a novel question concerning the financial qualifications of bidders for governmental contracts. More specifically, prospective bidders for public work are required to be preclassified by the Division of Property Management and Construction (DPMC) in the Department of the Treasury in accordance with the provisions of N.J.A.C. 17:19-2.1 to -2.7. See also N.J.S.A. 18:18A-27. Each classified bidder’s aggregate rating must then 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.AC. 17:19-2.8. At the conclusion of the classification process DPMC issues the bidder a notice of classification, which includes the maximum amount of public work on which it is qualified to bid. Specifically, “[a] firm shall not be awarded a contract which, when added to the [152]*152backlog of uncompleted construction work ... would exceed the firm’s aggregate rating.” N.J.A.C. 17:19-2.13. The dispute is whether a bidder who has been adjudicated the low bidder on a particular contract must disclose as much in subsequent bid submissions if the combination of such projects would cause it to exceed its aggregate rating.

For the reasons that follow, this court answers that issue in the affirmative and also holds that a bidder’s failure to disclose precludes it from providing, post-bid, clear and convincing evidence that it would nonetheless be able to perform both contracts.

I.

On October 8, 2014, the Hudson County Schools of Technology (“HCST”) solicited bids for the construction of the Applied Science Academy at its Jersey City Campus (“the HCST Project”). Defendant Brockwell & Carrington Contractors, Inc. (“Brockwell”) submitted the lowest bid, in the amount of $15,490,000, followed by the second lowest bid submitted by defendant Benjamin R. Harvey Co., Inc. (“Harvey”), in the amount of $15,547,000. Dobco, Inc. (“Dobco”) submitted the third lowest bid, in the amount of $15,684,000.

The bid required contractors to identify various subcontractors, including electrical work. Brockwell and Harvey both identified defendant Sal Electric Co., Inc. (“Sal Electric”) as their respective electrical subcontractors. Dobco identified an electrical subcontractor other than Sal Electric. Brockwell’s bid was subsequently rejected by HCST because it understated its offer.

The bid also required that each bidder and subcontractor submit a certification from the DPMC to ensure that each bidder and subcontractor was within their respective aggregate rating limit to perform the value of the work in the contract. It required them to submit a schedule of monetary value of uncompleted work to ensure that the total work on the HCST Project, when combined with their uncompleted work, would not exceed the DPMC certified aggregate rating limit.

[153]*153Sal Electric has a DPMC aggregate rating limit of $15 million. On October 8, 2014, Brockwell submitted with its bid Sal Electric’s DPMC Form 701 (“DPMC Form”), dated October 7, 2014, which certified that the amount of its uncompleted work on contracts was $9,816,000. Sal Electric further certified that the amount of its proposal for the HCST Project, $1,660,000, and the amount of all outstanding incomplete contracts did not exceed its prequalifi-cation dollar limit.

On September 19, 2014, Sal Electric, through its general contractor, Torcon, Inc. (“Torcon”), submitted a bid proposal for electrical work in the amount of $4 million for a Design Build Procurement project involving the Elizabeth Elementary School (“the Elizabeth Project”). Conspicuously absent from either Sal Electric’s DPMC Form 701 for the HCST Project, or any other submission by Sal Electric, was the fact that, on October 3, 2014, Torcon was determined to be the low bidder for the Elizabeth Project.

On October 28, 2014, Dobco filed an order to show cause and verified complaint seeking to temporarily enjoin and restrain HCST from awarding a contract for the HCST Project, alleging that Brockwell and Harvey should be disqualified because their common subcontractor, Sal Electric, had exceeded its DPMC aggregate rating limit and thus could not perform the work on this project.

On October 29, 2014, the court entered an order (1) temporarily restraining defendants from entering a contract for the HCST Project; (2) directing certain document production by Sal Electric; (3) ordering certain document production by Harvey and Brock-well; and (4) compelling the deposition of a representative from Sal Electric. The court then converted the order to show cause into a summary proceeding, so that the parties could engage in limited discovery and more fully brief the issues involved in this case.

[154]*154In a letter dated November 19, 2014, Harvey withdrew its formal bid protest as to Broekwell. Harvey has not made any subsequent filings with this court.

On November 21, 2014, by way of a motion to quash subpoenas filed by Broekwell and Sal Electric, an order was entered (1) partially granting and partially denying defendants’ motion to quash nine subpoenas issued to various owners, contractors, and suppliers doing business with Sal Electric; and (2) amending the October 28 order to show cause to limit certain discovery.

Dobco now moves for summary judgment disqualifying Brock-well and Harvey, adjudicating it the lowest responsible bidder, and awarding it the contract for the construction of the HOST Project.

II.

A review of the voluminous submissions by the parties reveals two arguments for disqualifying Broekwell and Harvey, the two lowest bidders for the HOST Project. First, they both misstated the “cost amounts” for certain subcontractors in their bids. The second argument, which is central to the court’s decision, is that their common subcontractor, Sal Electric, exceeded its DPMC aggregate rating limit and thus would not be able to perform work for the HOST Project.

HOST has submitted a verified answer and cross-claim asserting that both Harvey and Broekwell made material misrepresentations with regard to the “cost amounts,” or bid prices, for certain subcontractors. The basis for this position is that the subcontractors’ pre-bid price quotes differed from the “cost amount” Brock-well and Harvey listed for them in their bid proposals. Broekwell, on the other hand, contends that the bid specifications did not require pre-bid price quotes. Even if they did, Broekwell asserts that New Jersey law places the burden of potentially understated cost amounts on the general contractor, who cannot substitute a subcontractor and who must nonetheless perform the work at the total bid price offered.

[155]*155Dobco raises the pivotal issue in this case, by asserting that (a) Sal Electric materially misrepresented its amount uncompleted of work in the DPMC Form 701 submitted with the HCST Project and that its actual amount of uncompleted work far exceeds its $15 million aggregate rating; and (b) even assuming Sal Electric’s DPMC Form accurately stated its uncompleted work, its award of the Elizabeth Project, combined with its bid proposal on the HCST Project, would cause it to exceed its aggregate rating limit.

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Bluebook (online)
116 A.3d 1091, 441 N.J. Super. 148, 2015 N.J. Super. LEXIS 93, Counsel Stack Legal Research, https://law.counselstack.com/opinion/dobco-inc-v-brockwell-carrington-contractors-inc-njsuperctappdiv-2015.