H&S CONSTRUCTION AND MECHANICAL, INC. VS. WESTFIELD PUBLIC SCHOOLS (L-1111-18, UNION COUNTY AND STATEWIDE)

• Court: New Jersey Superior Court Appellate Division
• Decided: July 5, 2018
• Docket: A-3696-17T4
• Status: Unpublished

Opinion

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION This opinion shall not "constitute precedent or be binding upon any court." Although it is posted on the internet, this opinion is binding only on the parties in the case and its use in other cases is limited. R. 1:36-3.

SUPERIOR COURT OF NEW JERSEY APPELLATE DIVISION DOCKET NO. A-3696-17T4

H&S CONSTRUCTION AND MECHANICAL, INC.,

Plaintiff-Appellant,

v.

WESTFIELD PUBLIC SCHOOLS, and YOUR WAY CONSTRUCTION, INC.,

Defendants-Respondents,

and

APPLIED LANDSCAPE TECHNOLOGIES, INC.,

Defendant. ______________________________

Argued June 7, 2018 – Decided July 5, 2018

Before Judges Haas, Rothstadt and Gooden Brown.

On appeal from Superior Court of New Jersey, Law Division, Union County, Docket No. L-1111- 18.

Jeffrey S. Wilson argued the cause for appellant (Hedinger & Lawless, LLC, attorneys; Jeffrey S. Wilson, on the brief). Richard J. Kaplow, argued the cause for respondent Westfield Public Schools.

Brent M. Davis argued the cause for respondent Your Way Construction, Inc. (Scarinci & Hollenbeck, LLC, attorneys; Brent M. Davis, on the brief).

PER CURIAM

Plaintiff, H&S Construction & Mechanical, Inc., the third

lowest bidder for a project proposed by defendant Westfield Public

Schools (Westfield),1 appeals from the trial court's April 13,

2018 order dismissing its complaint to set aside the award of a

contract to defendant Your Way Construction, Inc. (Your Way), the

lowest bidder.2 In its challenge, plaintiff argued that

Westfield's waiver of Your Way's failure to include in its bid a

"Certification of No Material Change of Circumstances" (CNMCC)

from all of its subcontractors, violated public bidding laws.

Westfield contended that Your Way's inclusion of a "Subcontractor

Identification Statement" provided sufficient information to allow

it to waive the alleged deficiency. On April 13, 2018, Judge

Karen M. Cassidy determined that the alleged defect in the bid was

1 On February 8, 2018, Westfield publically advertised for bids for alterations and renovations at the school district's athletic field. 2 Defendant Applied Landscape Technologies, Inc. (Applied) chose not to participate in this appeal and did not file a brief.

2 A-3696-17T4 nonmaterial and waivable, and dismissed the complaint. We now

affirm.

The facts derived from the record are summarized as follows.

Westfield's Notice to Bidders contained a statement advising

bidders that it could "reject any and all bids or . . . waive

informality in the bidding if it is in the interest of [Westfield]

to do so." Its Bidding Information's Instructions to Bidders

required bidders to be prequalified by the State, submit their

"Notice of Classification[,]" and confirm "that there has been no

material change in [its] qualification information[.]" It

expressly provided that "[a]ny bid submitted . . . not including

a copy of a valid and active Prequalification/Classification

Certificate may be rejected as being nonresponsive to bid

requirements." As to bidders' subcontractors, the instructions

required that they be properly registered with the State.3 The

instructions also stated that a bidder had to submit a "Proposal

Guarantee" that would "be forfeited if [the] successful [b]idder

3 The Educational Facilities Construction and Financing Act, N.J.S.A. 18A:7G-1 to -48, requires bidders and certain subcontractors to be approved by the State for work on school projects. N.J.S.A. 18A:7G-37 addresses submissions that must be made by both bidders and subcontractors. See Brockwell & Carrington Contractors, Inc. v. Kearny Bd. of Educ., 420 N.J. Super. 273, 280 (App. Div. 2011) (holding that "subcontractors are 'firms' subject to the certification requirements of N.J.S.A. 18A:7G-37").

3 A-3696-17T4 fails to execute the [a]greement between [Westfield] and [the

c]ontractor . . . and [required that it] furnish the Performance

Payment Bond[.]" Westfield's Bidder's Checklist required a CNMCC

from both the bidder and its proposed subcontractors. It also

required submission of a "Subcontractor Identification Statement"

that identified each subcontractor's proposed trade and its State

license number.

Five bidders responded to the notice to bidders, and on March

20, 2018, Westfield awarded the contract to Your Way, whose bid

of $3,025,100 was the lowest bid. Applied had the second lowest

bid at $3,247,750, and plaintiff had the third lowest bid at

$3,292,000.

After plaintiff acquired a copy of Your Way's bid packet, it

determined that it contained material deficiencies that should

have rendered the bid void. Prior to Westfield's award of the

contract, plaintiff challenged Your Way's bid in a March 8, 2018

letter to Westfield, arguing that it contained numerous

deficiencies, including defective or omitted CNMCCs. Westfield

responded by dismissing plaintiff's protest stating that its

review of the bid found that it did not "'contain[] fatal defects'

which render[ed it] legally 'non-responsive[.]'"

Plaintiff filed its complaint seeking to prevent Westfield

from awarding the contract to Your Way, alleging that Your Way's

4 A-3696-17T4 bid contained material deficiencies, and that plaintiff was

entitled to the contract.4 Among other deficiencies, plaintiff

specifically alleged that although Your Way provided the names of

eight subcontractors, it failed to submit a CNMCC for three of the

eight listed subcontractors as required by N.J.S.A. 18A:18A-32,5

a section of the Public School Contracts Law (PSCL), N.J.S.A.

18A:18A-1 to -59.

During oral argument on April 13, 2018, before Judge Cassidy,

plaintiff argued that the CNMCC was required by Westfield's bid

specifications and N.J.S.A. 18A:18A-32. As a result, Your Way's

4 Plaintiff also challenged Applied's bid, first in its protest letter to Westfield and again in its complaint. The issues involving Applied are not relevant to our determination in this case, especially in light of Applied's decision to not participate and our upholding of the bid award to Your Way. 5 The statute states:

No person shall be qualified to bid on any public work contract with the board of education, the entire cost whereof will exceed $20,000.00, who shall not have submitted a statement as required by N.J.S.A. 18A:18A-28 within a period of one year preceding the date of opening of bids for such contract. Every bidder shall submit with his bid an affidavit that subsequent to the latest such statement submitted by him there has been no material adverse change in his qualification information except as set forth in said affidavit.

[N.J.S.A. 18A:18A-32 (emphasis added).]

5 A-3696-17T4 omission rendered its bid "invalid" preventing Westfield from

determining whether "it's a waivable defect because it's a

material[, i]ncurable defect on its face[.]" Citing to the Supreme

Court's opinion in Hillside v Sternin, 25 N.J. 317 (1957), counsel

argued that, as a required document, the failure to submit the

CNMCC could not be waived and without it, the bid should not have

been accepted. Quoting from our decision in Bodies by Lembo, Inc.

v. County of Middlesex, 286 N.J. Super. 298, 304 (App. Div. 1996),

counsel contended that by allowing Westfield to waive Your Way's

omission, "[t]he conditions and specifications [did not] apply

equally to all prospective bidders, [preventing] there [from

being] a . . . common standard of competition" as required in

public bidding.

At the conclusion of oral argument, Judge Cassidy placed her

decision on the record. She disagreed with plaintiff's contentions

and held that the alleged defect in Your Way's bid was nonmaterial

and waivable for the reasons expressed in Tec Electric, Inc. v.

Franklin Lakes Board of Education, 284 N.J. Super. 480 (Law Div.

1995).6 The judge initially recognized that, as Hillside, 25 N.J.

6 In Tec Electric, the Law Division concluded that a bidder's failure to include in its bid submission a "Prequalification Affidavit" that included a CNMCC was a nonmaterial, waivable defect. 284 N.J. Super. at 488. It reasoned that waiving the defect "would [not] deprive the municipality of its assurance that

6 A-3696-17T4 at 322 required, "[t]he conditions and specifications of request

for proposals must apply equally to all prospective bidders,

otherwise there is no common standard of competition." After the

judge evidently determined that the submission of the CNMCC was

not mandatory, she applied the two-prong materiality test for

local government contracts7 established in Township of River Vale

v. R.J. Longo Construction Company, 127 N.J. Super. 207, 216 (Law

Div. 1974) and adopted by the Supreme Court in Meadowbrook Carting

Company v. Borough of Island Heights & Consolidated Waste Services,

Inc., 138 N.J. 307, 315 (1994). The judge found that the first

prong of the test was satisfied because

the contract will be entered into, performed and guaranteed according to its specified requirements," id. at 484, because "[f]ailure to proceed with the execution of the contract work . . . would have subjected [the bidder] to severe financial and legal ramifications." Id. at 487. Addressing the integrity of the public bidding process, the court found that "the failure to submit a Prequalification Affidavit offered [the bidder] no opportunity adversely to affect competitive bidding[,]" nor did it "give rise to 'favoritism, improvidence, extravagance and corruption'" because the failure to include the affidavit did not "and could not influence the amount of . . . any other contractor's bid." Ibid. (citations omitted). 7 Although a separate statutory framework applies to school boards entering into these contracts, the PSCL "was enacted to impose similar requirements on the purchasing procedures utilized by local boards of education to those required by the Local Public Contracts Law[ (LPCL), N.J.S.A. 40A:11-1 to -51]." F. S. D. Industr, Inc. v. Bd. of Educ. of the City of Paterson, 166 N.J. Super. 330, 334 (App. Div. 1979); Tec Elec., 284 N.J. Super. at 483.

7 A-3696-17T4 [t]he omission of [the CNMCCs] by some of the subcontractors could reasonably be waived because the contractor personally certified that it was qualified and able to complete the job. If a subcontractor were unable to complete its portion of the job, Westfield could look to the contractor for a remedy.

She explained:

there was an assurance by the overall submission by Your Way that they in no way were going to leave the citizens of Westfield unprotected, that they did have safeguards that were provided in the certifications that were submitted as an overall project and that Westfield in looking at this document and the bid as a whole felt satisfied that these omissions were not material and, therefore, as they are permitted to do, could waive . . . those particular provisions.

Addressing the second prong, she stated:

As to the second prong of the materiality test, these subcontractor's failure to submit the certification did not influence the amount of Your Way's overall bid, nor is there any evidence that waiving the certification requirement would place the bidders on uneven footing. If Westfield could waive the lack of certification for Your Way, they could equally waive these certifications for any other applicant. Therefore, . . . the failure . . . to submit the CNMCC is immaterial.

Judge Cassidy entered an order on the same day denying

plaintiff's application for injunctive relief and dismissing its

complaint. This appeal followed.

8 A-3696-17T4 Plaintiff argues on appeal that "[c]ontrary to the trial

court's determination, Your Way's bid was . . . fatally defective

by reason of its failure to comply with [N.J.S.A. 18A:18A-32], the

Instructions to Bidders and the Bidder's Checklist." According

to plaintiff, the court erred in finding that the deficiency in

Your Way's bid was nonmaterial and waivable and its "decision

effectively emasculated a mandatory statutory requirement in

N.J.S.A. 18A:18A-32[.]" Quoting from Bodies by Lembo, 286 N.J.

Super. at 304, which stated that "[b]id proposals, to be accepted,

must not materially deviate from the specifications set forth by

the contracting agency[,]" plaintiff contends the trial court

incorrectly determined the omission of the CNMCC was waivable and

nonmaterial because of "the mandatory language contained in

N.J.S.A. 18A:18AA-32[.]" We disagree.

Our standard of review of a trial court's review of a board

of education's action is, at the outset, guided by our recognition

that in the context of public bidding the "function of [the c]ourt

is to preserve the integrity of the competitive bidding process

and to prevent the misapplication of public funds." Marvec Constr.

Corp. v. Twp. of Belleville, 254 N.J. Super. 282, 288 (Law Div.

1992); see also Barrick v. State, 218 N.J. 247, 261 (2014); In re

Jasper Seating Co., Inc., 406 N.J. Super. 213, 226 (App. Div.

2009).

9 A-3696-17T4 A governmental entity's decision to award a public contract

is "reviewed under the ordinary standard governing judicial review

of administrative agency final actions." Barrick, 218 N.J. at 259

(citing In re Protest of Award of On-Line Games Prod. & Operation

Servs. Contract, 279 N.J. Super. 566, 653 (App. Div. 1995)); see

also Marvec Constr. Corp., 254 N.J. Super. at 288. The reviewing

court will not reverse the entity's decision unless it is

demonstrated to be "arbitrary, capricious, or unreasonable,

or . . . not supported by substantial credible evidence in the

record as a whole." Barrick, 218 N.J. at 259 (quoting In re

Stallworth, 208 N.J. 182, 194 (2011)).

Applying these guiding principles, we disagree with

plaintiff's contentions and affirm substantially for the reasons

stated by Judge Cassidy in her thoughtful and comprehensive oral

decision. We add only the following comments.

Plaintiff's argument that N.J.S.A. 18A:18A-32 requires

bidders to submit subcontractors' CNMCCs with their bids is

"without sufficient merit to warrant discussion in a written

opinion[.]" R. 2:11-3(e)(1)(E). Suffice it to say, the failure

to include in a bid statutorily mandated documents is non-waivable.

See N.J.S.A. 40A:11-23.1 (addressing submission requirements under

the LPCL); see also P & A Constr., Inc. v. Twp. of Woodbridge, 365

N.J. Super. 164, 177 (App. Div. 2004). If not statutorily

10 A-3696-17T4 mandated, the determination of whether the defects are minor or

inconsequential and therefore waivable, or material and non-

waivable is subject to the two-part River Vale test. P & A

Constr., 365 N.J. Super. at 177.

Here, the statute's plain language contains no requirement

for subcontractors to submit a CNMCC and "courts should not rewrite

plainly worded statutes." Lippman v. Ethicon, Inc., 222 N.J. 362,

388 (2015). "As we have frequently noted, '[w]e cannot write in

an additional qualification which the Legislature pointedly

omitted in drafting its own enactment.'" Vitale v. Schering-

Plough Corp., 231 N.J. 234, 253 (2017) (quoting DiProspero v.

Penn, 183 N.J. 477, 492 (2005)). Had the Legislature intended

that subcontractors' CNMCCs be submitted with bids for public

school contracts, it clearly would have incorporated that

requirement into the statute. See, e.g., N.J.S.A. 18A:18A-18(b)

(stating circumstances when a bid must identify a bidder's

subcontractors).

Similarly, there was no evidence in the record about the bid

documents that demonstrated the substantive materiality of the

omitted CNMCCs. There was no language in the bid proposal making

the submission mandatory nor was there notice provided to the

bidders that the consequences for non-compliance was automatic

rejection. It also did not contain any clear and unequivocal

11 A-3696-17T4 statement that explained the purpose for which the documents were

requested. For example, there was no provision in any of the bid

documents that the submission of the CNMCCs was mandatory and non-

waivable, or that the failure to include them with the bid package

could result in an automatic rejection, as was the case for "a

[bidder's] valid and active Prequalification/Classification

Certificate[.]" Thus, contrary to plaintiff's assertion, there

was no "transform[ation of a] mandatory requirement in

[Westfield's] specifications into a polite request." L. Pucillo

& Sons, Inc. v. New Milford, 73 N.J. 349, 356 (1977). Judge

Cassidy therefore properly conducted the correct analysis to

determine whether the defect as alleged by plaintiff was waivable.

Finally, to the extent that plaintiff argued to us that

Westfield's waiver of strict compliance regarding the CNMCCs gave

rise to a successful bidder's right to abandon the project or

narrow the pool of possible bidders, we find no evidence in the

record supporting either contention and conclude that they are

equally without merit. We only observe that a successful bidder's

obligation to enter a contract was secured through a bid bond, and

there was no demonstration that the failure to provide the CNMCCs

with a bid disturbed the level playing field required in public

bidding to preserve "the overriding interest in insuring the

integrity of the bidding process[, which] is more important than

12 A-3696-17T4 the isolated savings at stake." Star of the Sea Concrete Corp.

v. Lucas Bros., Inc., 370 N.J. Super. 60, 73 (2004) (quoting

Meadowbrook, 138 N.J. at 313).

Affirmed.

13 A-3696-17T4