THASSIAN MECHANICAL CONTRACTING, INC. VS. EAST BRUNSWICK BOARD OF EDUCATION (L-4865-19, MIDDLESEX COUNTY AND STATEWIDE)

• Court: New Jersey Superior Court Appellate Division
• Decided: January 6, 2020
• Docket: A-5149-18T1
• Status: Unpublished

Opinion

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION This opinion shall not "constitute precedent or be binding upon any judge." 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-5149-18T1

THASSIAN MECHANICAL CONTRACTING, INC.,

Plaintiff-Respondent,

v.

EAST BRUNSWICK BOARD OF EDUCATION,

Defendant,

and

HANNA'S MECHANICAL CONTRACTORS, INC.,

Defendant-Appellant. ____________________________

Argued December 11, 2019 – Decided January 6, 2020

Before Judges Koblitz, Whipple and Gooden Brown.

On appeal from the Superior Court of New Jersey, Law Division, Middlesex County, Docket No. L-4865-19. Robert T. Lawless argued the cause for appellant (Hedinger & Lawless, LLC, attorneys; Robert T. Lawless, on the briefs).

Thomas J. Hirsch argued the cause for respondent.

PER CURIAM

Defendant Hanna's Mechanical Contractors, Inc., the third lowest bidder,

appeals from a July 24, 2019 order vacating the East Brunswick Board of

Education's rejection of plaintiff Thassian Mechanical Contracting, Inc.'s bid

and directing the Board to award the bid for project number 2020-06 to plaintiff,

the lowest bidder.1 We granted a stay and now affirm substantially for the

reasons set forth on the record by Assignment Judge Alberto Rivas.

In April 2019 the Board solicited bids from contractors for an upcoming

project at Churchill Junior High School. The project, designated as bid number

2020-01, was for HVAC upgrades and a roof replacement. The bids were issued

with three different pricing options: pricing for the complete HVAC upgrade s

and roof replacement, pricing for the HVAC upgrades only, and pricing for the

roof only. Plaintiff was among the contractors who submitted bids on May 16,

2019 for bid 2020-01.

1 The Board takes no position on appeal. A-5149-18T1 2 On May 22, 2019, the Board rejected all bids for bid 2020-01 due to

material defects and decided to split the HVAC upgrades and the roof

replacement into two separate projects. On June 4, 2019, the Board solicited

new bids for the HVAC project, designated as bid number 2020-06, the bid at

issue on appeal. The Board received four bids for 2020-06: plaintiff's for

$7,196,000; EACM Corp.'s for $7,227,000; defendant's for $7,385,000; and

AMCO Enterprises, Inc.'s for $7,491,000.

Prior to the Board's meeting, an agenda was posted online stating that

plaintiff was the lowest bidder for bid 2020-06. The agenda also indicated that,

"upon a review of the bid submissions and advice of legal counsel, the bids of

[plaintiff] and EACM Corp., the first and second low bidders, must be rejected

as the subcontractors for each did not submit the proper bid forms, namely the

sworn contractor certification."

The Board informed plaintiff that its bid was being rejected because of

plaintiff's failure to meet the requirements of N.J.S.A. 18A:7G-37. The letter

from the Board attorney states:

N.J.S.A. 18A:7G-37 provides that a prequalified contractor and any qualified subcontractors required to be named shall submit, as a condition of bidding, a sworn contractor certification. [Plaintiff's] subcontractors submitted the certifications for a prior bid, Bid #2020-01, and not Bid #2020-06. As the

A-5149-18T1 3 proper forms were not submitted, [plaintiff's] bid must be rejected.

The contract for bid 2020-06 was awarded to defendant, whose bid was

$189,000 more than plaintiff's bid.

Judge Rivas in an oral decision vacated the Board's rejection of plaintiff's

bid and awarded bid 2020-06 to plaintiff as the "lowest responsible bidder." In

rendering his decision, the judge first acknowledged the well-settled law of

public bidding discussed in Hillside v. Sternin, 25 N.J. 317, 326 (1957). He

pointed out that a material defect in a bid may not be waived, while "minor

inconsequential variances and technical additions may be the subject of a

waiver." The judge discussed the two-part test set forth in Twp. of River Vale v.

R.J. Longo Constr. Co., 127 N.J. Super. 207, 216 (Law Div. 1974) and adopted in

Meadowbrook Carting Corp. v. Island Heights Borough, 138 N.J. 307, 315

(1994) to determine whether a non-conforming bid is waivable. The judge

restated the two-part test as: 1) "whether the effect of the waiver would be to

deprive the municipality of its assurance [that] the contract would be entered

into, perform[ed], and guarantee[d] according to its specified requirements" and

2) whether the defect is "of such [a] nature that its waiver would adversely affect

competitive bidding by placing a bidder in a position of advantage over the other

A-5149-18T1 4 bidders [or] by otherwise undermining the necessary common standard of

competition."

Judge Rivas first analyzed plaintiff's bid under N.J.S.A. 18A:7G-37,

which requires the bids to contain sworn contractor certifications from the

prequalified contractor and its qualified subcontractors. The judge rejected

defendants' argument that plaintiff's use of subcontractors' sworn certifications

from a prior bid invalidates the current bid under the statute. The judge found

that plaintiff's sworn certifications from its subcontractors from the previous bid

were "essentially identical and approximately three weeks apart" from bid 2020-

06 and "could reasonably be waived because every representation sworn to by

the subcontractors [is] independently verifiable and supported by additional

documents submitt[ed] in the bid."

Second, the judge found that plaintiff's submission of its subcontractors'

prior sworn certifications "did not in any way influence plaintiff's bid." The

judge also found "no evidence that indicates that the waiving of the

subcontractor sworn certification requirements would place bidders on un even

footing." After finding the error waivable, the judge considered the Board's

failure to waive the minor defect and concluded that the Board's decision was

A-5149-18T1 5 "arbitrary, capricious, or unreasonable and not supported by substantial credible

evidence in the record as whole."

He found that the rejection of plaintiff's bid as the lowest bidder

"depriv[ed] East Brunswick residents of a $189,000 saving." The judge stated

that the "statute was not meant to cost public bodies many thousands of dollars

by requiring the acceptance of a higher bid for [a] mere technical violation."

"The standard of review on the matter of whether a bid on a local public

contract conforms to specifications . . . is whether the decision was arbitrary,

unreasonable or capricious." In re Protest of the Award of On-Line Games Prod.

& Operation Servs. Contract, Bid No. 95-X-20175, 279 N.J. Super. 566, 590

(App. Div. 1995). An appellate court will not reverse a public entity's decision

unless it is "shown to have been 'arbitrary, capricious, or unreasonable, or [] not

supported by substantial credible evidence in the record as a whole.'" Barrick

v. State, 218 N.J. 247, 259 (2014) (alteration in original) (quoting In re Stallworth,

208 N.J. 182, 194 (2011)). "The essential question to be determined is . . .

whether [the authority's] decision represented a 'clear abuse of discretion.'"

Waste Mgmt. of N.J., Inc. v. Union City Utils. Auth., 399 N.J. Super. 508, 526

(App. Div. 2008) (quoting Kramer v. Bd. of Adjustment, Sea Girt, 45 N.J. 268,

A-5149-18T1 6 296–97 (1965)). The judge is "obligated to give deference to the [a]uthority's

determination." Waste Mgmt., 399 N.J. Super. at 525.

After careful de novo review, and giving the Board the required legal

deference, we agree with Judge Rivas's determination that the minor defect in

the bid was not material, and the rejection of the lowest bidder in these

circumstances was an abuse of the Board's wide discretion.

Affirmed.

A-5149-18T1 7