STERLING CARTING, INC. VS. BOROUGH OF LODI (L-2126-18, BERGEN COUNTY AND STATEWIDE)

• Court: New Jersey Superior Court Appellate Division
• Decided: July 31, 2019
• Docket: A-4306-17T4
• Status: Unpublished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NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION This opinion shall not "constitute precedent or be binding upon any court."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-4306-17T4

STERLING CARTING, INC., and BARBARA ANN MILLER,

Plaintiffs-Appellants,

v.

BOROUGH OF LODI and JOSEPH SMENTKOWSKI, INC.,

Defendants-Respondents. _______________________________

Argued October 31, 2018 - Decided July 31, 2019

Before Judges Fuentes, Accurso and Moynihan.

On appeal from the Superior Court of New Jersey, Law Division, Bergen County, Docket No. L-2126-18.

Richard D. Trenk argued the cause for appellants (McManimon, Scotland & Baumann, LLC, attorneys; Richard D. Trenk, of counsel and on the brief; Mark Y. Moon, on the brief).

Alan P. Spiniello argued the cause for respondent Borough of Lodi. Thomas S. Cosma argued the cause for respondent Joseph Smentkowski, Inc. (Connell Foley LLP, attorneys; Thomas S. Cosma, of counsel and on the brief; Michael J. Affrunti, on the brief).

PER CURIAM

This appeal arises out of a competitive bidding dispute under the Local

Public Contracts Law, N.J.S.A. 40A:11-1 to -52. Defendant Borough of Lodi

awarded a one-year solid waste collection contract with the option to extend for

a second or third year to the lowest responsible bidder, defendant Joseph

Smentkowski, Inc., in accordance with the bid notice and accompanying

specifications. Incumbent provider Sterling Carting, Inc., the only other bidder,

and taxpayer Barbara Ann Miller 1 filed an action in lieu of prerogative writs to

enjoin the award of the contract based on the theory that Sterling was the lowest

responsible bidder for the one year contract the Borough awarded. Plaintiffs

also argued the Borough misinterpreted an addendum requiring bidders to bid a

separate amount for additional work of waste collection at eight schools by

adding the amounts it bid to its bid price instead of treating them "as an

1 Defendants challenged Miller's standing, and plaintiffs' candor, for failing to disclose to the court that Miller is married to a supervisor for Sterling and thus is not a disinterested taxpayer. Although "a little concerned" by the failure to disclose Miller's interest, the trial court judge declined to address the issue in light of its rejection of the bid challenge. We do the same. See Am. Motorists Ins. Co. v. L-C-A Sales Co., 155 N.J. 29, 43 (1998). A-4306-17T4 2 apportionment." Miller also challenged the specifications themselves, claiming

the ambiguities and inconsistencies Sterling identified required that both bids be

rejected and the contract re-bid.

The trial court temporarily restrained the contract award to permit it the

opportunity to fully review the bid challenge. After full briefing and oral

argument, the court denied plaintiffs' request for permanent injunctive relief and

dismissed the complaint with prejudice. Plaintiffs' applications for emergent

relief were denied by this court and the Supreme Court, although we agreed to

accelerate their appeal. Having now had the opportunity to fully review

plaintiffs' claims, we find them without sufficient merit to warrant any extended

discussion in a written opinion. See R. 2:11-3(e)(1)(E).

The bid specifications in this case were clear and unambiguous. The

proposal required bidders to bid on nine different service options, divided into

categories, for one year service periods for a total of three years. Bidders were

required to bid for all service periods in all categories. The Borough retained

the right to award the contract based upon the lowest responsible bid for

whatever option it selected. The specifications stated clearly that the Borough

could

award the contract to the bidder whose aggregate bid price for a one year contract is the lowest responsible

A-4306-17T4 3 bid, or to award the contract to the bidder whose aggregate bid price for a two year contract in the categories selected by the Borough for such service period is the lowest responsible bid, or to award the contract to the bidder whose aggregate bid price for a three year contract in the categories selected by the Borough for such service periods is the lowest responsible bid.

Although Sterling's bid for the first year service period for the service

options the Borough chose was lower than Smentkowski's, its second and third

year prices were higher, resulting in Sterling's aggregate bid price exceeding

Smentkowski's.2 Sterling's theory is that because the Borough awarded a one

2 The parties' bids on the options selected by the Borough were as follows:

Smentkowski Sterling Option Three Year One $653,622 $605,700

Option Three Year Two $653,622 $658,200

Option Three Year Three $669,564 $703,200

Option Three - Total $1,976,808 $1,967,100

Attachment Five Year One $18,289 $42,000

Attachment Five Year One $18,289 $43,500

Attachment Five Year One $18,289 $45,000

Attachment Five - Total $54,867 $130,500

Grand Total $2,031,675 $2,097,600

A-4306-17T4 4 year contract to Sterling, with only options to award the second and third year

periods, the contract should have been awarded to Sterling because its first year

bid price was lower.

Besides being a thinly-veiled challenge to the specifications prohibited by

Saturn Construction Company, Inc. v. Board of Chosen Freeholders, 181 N.J.

Super. 403, 407-08 (App. Div. 1981), Sterling's theory ignores that

Smentkowski is firmly bound to hold its second and third year bid prices in

accordance with the specifications. That the Borough left itself free not to

exercise those options does not change that Sterling and Smentkowski submitted

bids for a three-year contract as required by the specifications, and the Borough

chose to award the contract to the bidder whose aggregate bid price for a three-

year contract constituted the lowest responsible bid, Smentkowski. See

Meadowbrook Carting Co., Inc. v. Borough of Island Heights, 138 N.J. 307, 313

(1994) (explaining that a contract must be awarded to the lowest bidder that

complies with the requirements of the bid specifications).

Sterling argues the Borough could manipulate the bid process by awarding

the contract based on the three-year aggregate price and then not exercise the

second or third year options. We acknowledge that this is so. A contracting

entity could likewise manipulate the process by awarding a three-year contract

A-4306-17T4 5 and cancelling for convenience after the first year. In neither instance are the

public bidding laws offended because in each case the bidders competed on a

level playing field. 3 No one contests that a contracting entity can favor a bidder

through its choice of bid alternatives. As Judge Pressler explained in Seacoast

Builders Corporation v. Jackson Township Board of Education, 363 N.J. Super.

373, 380 (App. Div. 2003), however, "whatever manipulation may be possible

is inherent in the nature of specifying alternates in the first place, a practice

which is nevertheless accepted as a customary aspect of bidding." As in

Seacoast Builders, it does not appear to us that the spectre of the type of potential

manipulation Sterling envisions by the inclusion of bid alternatives "outweigh[s]

what we perceive to be the other objectives of public bidding." Ibid.

Sterling's other argument, that it intended the Borough to understand that

the price it bid for the "separate amount for the additional work described in

Attachment 5," which the Borough required by bid modification notice, was

already subsumed within its aggregate bid price is frivolous.

3 This is not to say that a government entity would not otherwise have to answer for such conduct if motivated by favoritism or corruption. A-4306-17T4 6 Miller's challenge to the specifications based on the same arguments

Sterling raises, and we reject here, was also correctly dismissed by the trial court

judge.

Affirmed.

A-4306-17T4 7