Matthew J. Barrick, Jr. v. State of New Jersey, Department of Treasury, Division of Property Management and Construction , 218 N.J. 247 ( 2014 )

SYLLABUS
(This syllabus is not part of the opinion of the Court. It has been prepared by the Office of the Clerk for the
convenience of the reader. It has been neither reviewed nor approved by the Supreme Court. Please note that, in the
interest of brevity, portions of any opinion may not have been summarized.)
Matthew J. Barrick, Jr. v. State of New Jersey (A-8/9-13) (072795)
Argued May 6, 2014 -- Decided July 23, 2014
LaVECCHIA, J., writing for a unanimous Court.
In this appeal, the Court considers whether the New Jersey Division of Property Management and
Construction (the Division) acted arbitrarily in awarding a contract for the lease of office space to the lowest bidder.
The Court also considers whether the matter was rendered moot by the expenditure of State resources in
performance of the contract after the unsuccessful bidder failed to seek a stay of the award pending appeal.
On September 28, 2010, the Division, which procures and manages leases for the State, posted a request for
proposals (RFP) seeking bids from property owners in Morris County for a ten-year lease of office space to be used
by the Department of Labor (DOL) as a one-stop career center. The Division also sent a leased space proposal
package to four property owners who had requested to be maintained on the agency’s files, including respondent,
Matthew Barrick, Jr., and RMD Properties, LLC (RMD). A detailed scope of work (SOW) set forth several
requirements for the prospective location, including that the property be within one-quarter mile of accessible public
transportation. At the close of the RFP period in November 2010, the Division had received four bids, among them
Barrick’s and RMD’s. The bidders submitted best and final offers (BAFOs), and Barrick’s bid was determined to be
the most cost-effective, followed by RMD’s. However, after a second round of BAFOs, the Division determined
that RMD, which had reduced its BAFO, had submitted the most cost-effective bid, followed by Barrick, who had
not altered his BAFO. On October 20, 2011, the Division issued a notice of intent to award the lease to RMD.
Barrick challenged the award, arguing that RMD’s proposal failed to satisfy the distance-to-public-
transportation requirement because its property was located .58 miles from the nearest bus stop. The Division
determined that none of the bid properties, including Barrick’s, were located within one-quarter mile of public
transit. After consultation with the DOL, the Division decided that the proposals would not be deemed non-
conforming based on the distance requirement since it was not imposed by statute or regulation and each property
was close enough to public transportation to meet the DOL’s needs. On March 30, 2012, the Director of the
Division issued a final agency decision recommending award of the lease to RMD. He noted that cost-effectiveness
was of paramount importance in his decision and the distance requirement was not a determinative factor. Barrick
sought reconsideration and to supplement the record to reflect that there is a bus stop just within one-quarter mile of
his property, which he had failed to identify in his original proposal. The Division upheld the award to RMD,
explaining that, although Barrick’s property satisfied the distance requirement, it had determined prior to awarding
the lease that the requirement was not outcome-determinative.
Barrick appealed without seeking a stay of the agency’s decision. The Appellate Division panel reversed
the award and remanded the matter to the Division either to award the lease to Barrick or rebid the project. Barrick
v. State, Dep’t of Treasure, Div. of Prop. Mgmt. & Constr., 430 N.J. Super. 377, 391 (App Div. 2013). The panel
determined that the distance requirement was not waivable and that the monetary difference between RMD’s and
Barrick’s bids was insignificant. In light of Barrick’s supplemental information, the panel determined that his was
the only compliant bid and the Division abused its discretion by awarding the lease to RMD. The Division and
RMD moved for reconsideration, contending that the appeal was moot since the lease had been executed and
significant resources expended to render RMD’s property compliant with the SOW. The panel denied the motion
and refused to address the mootness issue because it was not raised on direct appeal. This Court granted the
Division’s and RMD’s petitions for certification. 215 N.J. 487 (2013).
HELD: The Director’s determination that the distance requirement was not material to the RFP was
unassailably reasonable and the decision awarding the lease contract to RMB was not arbitrary, capricious, or
1
unreasonable. Under the circumstances, the Court declines to consider the mootness issue, but warns future
unsuccessful bidders that sitting on the right to seek a stay may imperil any opportunity for a merits review.
1. Public bidding statutes exist for the taxpayers’ benefit and are construed with sole reference to the
public good. The statutes are intended to guard against favoritism and corruption, while securing the benefits of
unfettered competition. N.J.S.A. 52:34-12(a)(g), which governs the advertisement for bids concerning leases,
requires agencies to act with reasonable promptness in awarding the contract to the conforming bid that is most
advantageous to the State. Discretion is vested in the Director of the Division, and the decision is reviewed under
the gross abuse of discretion standard. In order to maintain a level playing field for all bidders, requirements that are
material to the RFP may not be waived and the Division may not award a contract to a bidder whose proposal
deviates materially from those requirements. Agency determinations as to whether a requirement is material, or
whether a bid conforms to an RFP’s requirements, are not disturbed unless the decision is arbitrary, capricious,
unreasonable, or unsupported by credible evidence. In applying that standard of review, an appellate court may not
substitute its judgment for that of the agency. (pp. 11-14)
2. The threshold step in determining whether an RFP requirement is material and, consequently, non-
waivable is to determine whether there is a deviation from the RFP. In order to ensure a fair and impartial public
contract award process, that determination must be made by the Director at the time the bids are opened. The
correctness of the Director’s determination is reviewed on the basis of the information available at that time. If a
deviation occurs and an award is made, a reviewing court must first assess whether the effect of a waiver would be
to deprive the public entity of its assurance that the award will be based on the specified requirements. It must then
determine whether waiver would adversely affect competitive bidding by placing a bidder in a position of advantage
or by otherwise undermining the necessary common standard of competition. (pp. 14-16)
3. Here, at the time bids were opened, the Director properly determined that all qualified bidders had
submitted proposals that deviated from the RFP by exceeding the distance-to-public-transportation requirement.
The Director also correctly refused to consider Barrick’s belated attempt to supplement his original proposal. The
Appellate Division’s determination that this amendatory material rendered Barrick’s bid conforming constituted an
improper substitution of the court’s judgment for the Director’s. Turning next to the question of whether the
deviation from the distance-to-public-transportation requirement was material, the Court finds that the Director
reasonably determined that it was not, based on his consultation with the DOL, recognition that the requirement was
not legally mandated, and determination that the distances by which the bids exceeded the requirement were de
minimis. Thus, the Director’s award decision was unassailably reasonable and consonant with the statutory process
he is tasked with administering. Consequently, his determination that cost-effectiveness was the factor of paramount
importance and his subsequent award to the lowest bidder was entitled to deference. The decision was neither
arbitrary, capricious, nor unreasonable. (pp. 16-18)
4. In light of the Court’s decision finding error in the Appellate Division’s reversal of the Division’s award
to RMD, it declined to address the parties’ arguments for a bright-line rule in favor of mootness when an
unsuccessful bidder fails to seek a stay in order to appeal a bid award. However, the Court notes that an
unsuccessful bidder, who does not promptly seek a stay of a lease bid award under Rule 2:9-8 when appealing an
award determination, acts at his, her, or its peril. The Court cautions against any expectation that a merits review
will be available to unsuccessful bidders who sit on their right to seek a stay. The appellate process is equipped for
stay applications in bidding disputes and such relief ought to be pursued as a matter of course. Rule 2:9-8 provides
an avenue to accommodate the interests of the public and all parties in a swift and fair review of alleged
improprieties in the bid award process. (pp. 18-20)
The judgment of the Appellate Division is REVERSED.
CHIEF JUSTICE RABNER, JUSTICES PATTERSON and FERNANDEZ-VINA, and JUDGES
RODRÍGUEZ and CUFF (both temporarily assigned) join in JUSTICE LaVECCHIA’s opinion. JUSTICE
ALBIN did not participate.
2
SUPREME COURT OF NEW JERSEY
A-8/9 September Term 2013
072795
MATTHEW J. BARRICK, JR.,
Appellant-Respondent,
v.
STATE OF NEW JERSEY,
DEPARTMENT OF TREASURY,
DIVISION OF PROPERTY
MANAGEMENT AND CONSTRUCTION,
Respondents-Appellants.
Argued May 6, 2014 – Decided July 23, 2014
On certification to the Superior Court,
Appellate Division, whose opinion is
reported at 430 N.J. Super. 377 (2013).
Christine Cartwright Baker, Deputy Attorney
General, argued the cause for appellants
State of New Jersey, Department of Treasury,
Division of Property Management and
Construction (John J. Hoffman, Acting
Attorney General, attorney; Beth Leigh
Mitchell, Assistant Attorney General, of
counsel; Thomas A. Edenbaum, on the briefs).
Karen A. Confoy argued the cause for
appellant RMD Properties, LLC (Fox
Rothschild, attorneys; Ms. Confoy and Joseph
Schramm, III, on the briefs).
Vito A. Pinto argued the cause for
respondent (Lindabury, McCormick, Estabrook
& Cooper and Brierley & Humick, attorneys;
Douglas S. Brierley, of counsel; Francis G.
Grather of Daly & Associates, on the
briefs).
1
JUSTICE LaVECCHIA delivered the opinion of the Court.
At issue in this appeal is whether the New Jersey Division
of Property Management and Construction (the Division) acted
arbitrarily when it awarded a contract for the lease of office
space for use as a one-stop career center to RMD Properties, LLC
(RMD), the lowest bidder. The award was made to RMD after the
Director of the Division,1 in consultation with the Department of
Labor (DOL), the agency for which the space was to be used,
determined that an advertised requirement that the site location
be within one-quarter mile of public transportation could be
waived. The distance requirement was not compelled by law and,
at the time of the bid opening, no bid submitted by a qualified
bidder satisfied the original distance requirement. After the
Director awarded the bid, respondent, Matthew J. Barrick, Jr.,
an unsuccessful bidder, appealed. However, he failed to seek a
stay. Accordingly, also at issue is whether the matter was
rendered moot by the expenditure of State resources in
performance of the contract after Barrick’s failure to seek a
stay of the award.
The Appellate Division held that the waiver of the
advertised distance requirement was improper, reversed the
Director’s award of the lease, and remanded the matter to the
1
The terms “Director” and “Division” are used interchangeably
throughout this opinion.
2
Division to award the lease to Barrick or to rebid the project.
We granted the Division’s and RMD’s petitions for certification
and now reverse the judgment of the Appellate Division. We
conclude that the agency determination was not arbitrary or
capricious and that it was error for the appellate panel to have
substituted its judgment for that of the Director.
I.
The Division is tasked with procuring and managing leases
for the State. On September 28, 2010, the Division posted a
request for proposals (RFP) on its website seeking bids from
property owners in Morris County for the ten-year lease of
office space to be used by the DOL as a one-stop career center.
The center provides career and occupational skills training
services to unemployed, disadvantaged, displaced, and disabled
persons. The Division also sent a leased space proposal package
to four property owners that previously had requested to be
maintained on the agency’s files: respondent, Matthew Barrick;
RMD; Highway Enterprises, Inc.; and Mynt Properties, LLC (Mynt).
The one-stop career center had been located on Barrick’s
property for many years prior to the RFP but the State, citing
public safety concerns, had decided to seek bids for a new
lease.
A detailed scope of work (SOW), incorporated by reference
into the RFP, set forth several requirements for the prospective
3
location. Among those requirements was that “[t]he office shall
be located within 1/4 mile of a mode of accessible public
transportation (bus route or other means).”
At the close of the RFP period on November 10, 2010, the
Division had received four bids. Barrick, RMD, Highway
Enterprises, and Mynt each submitted bids. Mynt’s bid
subsequently was rejected as nonresponsive.2 On May 12, 2011,
the Division requested a best and final offer (BAFO) from each
of the remaining three bidders. Barrick’s bid was determined to
be the most cost effective, followed by RMD’s and then Highway
Enterprises’. On September 22, 2011, because over ninety days
had elapsed since the submission of bids, the Division requested
a second round of BAFOs. See N.J.A.C. 17:11-6.4 (“Unless the
RFP states otherwise, the prices submitted shall remain
effective for 90 days after the opening date . . . .”). After
receiving the second round of BAFOs, the Division determined
that RMD -- which had reduced its BAFO, resulting in a net
present value of $3,022,596 for the life of the lease -- had
submitted the most cost-effective bid, followed by Barrick and
Highway Enterprises, whose BAFOs had not changed. The Division
2
In a letter dated May 12, 2011, the Division rejected Mynt’s
bid out of concern that disabled clients would not be able to
access the property safely because of the lack of sidewalks to
and from public transportation and heavy tractor-trailer traffic
in the proposed site’s common parking lot.
4
calculated the net present value for the life of the lease of
Barrick’s property to be $3,106,638. On October 20, 2011, the
Division issued a notice of intent to award the lease to RMD.
Barrick challenged the award pursuant to N.J.A.C. 17:11-8.3
arguing, among other things, that RMD’s proposal failed to
satisfy the distance-to-public-transportation requirement
because its property was located .58 miles from the nearest bus
stop. After further evaluation, the Division determined that
none of the three bid properties were located within one-quarter
mile of public transit.3 The Division conferred with the DOL and
determined, first, that no statute or regulation imposed the
quarter-mile requirement and, further, that each of the proposed
properties were close enough to public transportation to meet
the DOL’s needs because none of the distance overages were
significant. Based on those determinations, the Division
determined that the proposals would not be deemed nonconforming
based on the distance requirement and accepted all three bids.
On March 30, 2012, the Director issued a final agency
decision that recommended the award of the lease to RMD.4 In his
3
The Division’s investigation revealed that Barrick’s property
was .319 miles from the bus stop that Barrick identified in his
bid submission as the nearest to his property.
4
Following the Director’s determination, the Division is
required to publish a notice of proposed lease, which is
submitted to the State Leasing and Space Utilization Committee
(SLSUC) for approval. N.J.A.C. 17:11-7.1 to -7.4. The SLSUC is
5
decision, the Director declared that the extent to which each
proposed property exceeded the public transportation distance
requirement was de minimis and not a determinative factor in the
Director’s bid award. Cost-effectiveness was identified as of
paramount importance in the Director’s decision to whom to award
the bid.
On April 9, 2012, Barrick sought reconsideration and
contended that the record should be supplemented to reflect that
there is a bus stop .2498 miles from his property. He argued
that he had incorrectly identified in his original proposal a
more distant bus stop as the nearest to his property. On April
24, the Division upheld the award to RMD. The Division
acknowledged that Barrick’s property, in fact as supplemented by
the additional new information, did satisfy the distance
requirement by one foot but noted that it had determined prior
to awarding the lease to RMD that the distance requirement would
not be outcome-determinative.
Barrick appealed the Division’s final determination to the
Appellate Division; however, he did not seek a stay of the
a joint committee of the New Jersey State Legislature comprised
of the “President of the Senate, the Speaker of the General
Assembly and the State Treasurer, or their respective
designees.” N.J.S.A. 52:18A-191.4. On May 24, 2012, the SLSUC
approved the Director’s award of the lease to RMD. Comm.
Meeting of J. Leasing & Space Utilization Comm., 215th Leg., 1st
Sess. 8-11 (N.J. 2012).
6
agency’s decision either from the agency or from the Appellate
Division. As noted, the Appellate Division reversed the
Director’s award of the lease to RMD and remanded the matter
back to the Division either to award the lease to Barrick or to
rebid the project. Barrick v. State, Dep’t of Treasury, Div. of
Prop. Mgmt. & Constr., 430 N.J. Super. 377, 391 (App. Div.
2013). The panel determined that the distance-to-public-
transportation requirement in the RFP was not waivable and that
the Division’s “conclusory statement that RMD had the ‘most cost
effective proposal’” was inadequate in light of the
insignificance of the monetary difference between bids relative
to the roughly $3 million total cost of the project. Id. at
389. Because the distance requirement was non-waivable, the
panel accepted the supplemental information submitted by Barrick
and concluded that Barrick’s was the only compliant bid and that
the Division abused its discretion when it awarded the lease to
RMD. Id. at 391.
The Division and RMD filed a motion for reconsideration
before the Appellate Division, contending that the appeal was
now moot because the lease had already been executed and
significant resources had been expended to bring RMD’s property
into compliance with the SOW. Specifically, RMD stated that it
had secured a $1.8 million loan and that the renovations needed
to comply with the SOW had begun. The Division represented that
7
it had also purchased fitted furniture systems designed for
RMD’s property and was paying rent as a holdover tenant at a
temporary location during the renovation.
On May 24, 2013, the panel denied the motion for
reconsideration and refused to address the mootness issue
because the parties had failed to raise it on direct appeal. We
granted the Division’s and RMD’s petitions for certification.
215 N.J. 487 (2013).
II.
A.
The Division argues that the Appellate Division erred by
interfering with a legitimate decision by the Director to award
the bid to RMD. It stresses the broad discretion vested in the
Director by N.J.S.A. 52:34-12 to protect the public interest and
obtain for the State the most advantageous contract, “price and
other factors considered.” That discretion was not abused,
according to the Division; rather, the Appellate Division
misstepped by not allotting the agency’s final determination the
deference that is owed to an administrative agency acting within
its field of expertise.
Moreover, focusing on its argument that Barrick’s claim
should have been held to be moot, the Division contends that the
Appellate Division failed to consider analogous decisions
involving construction contracts. The Division contends that
8
those cases militate against review of an agency’s contract
award decision if, when review is sought, the project is
substantially complete or if considerable funds have been
expended in preparation for performance of the contract. The
Division maintains that Barrick’s failure to seek a stay or
otherwise “restrain the State from acting for over one year”
contributed to the expenditure of substantial resources and
that, as a result, Barrick should not have been entitled to
appeal the contract award to RMD. Further, the Division argues
that the Appellate Division’s decision to award relief in the
posture of this contract award dispute is counter to the
interests of justice and results in “a waste of the substantial
public monies spent and efforts by public employees taken and
thwarts [the Division’s] careful planning for cost savings
anticipated from planned staff relocations.”
Relatedly, the Division submits that the Appellate
Division’s failure to consider and apply equitable principles in
this case will have a chilling effect on future lease
procurement because requiring the State to wait until the
resolution of all appeals before moving forward under awarded
contracts will frustrate government leasing operations.
B.
Petitioner RMD contends that the Appellate Division
improperly disregarded the Division’s decision–making process.
9
Specifically, RMD submits that the appellate panel misapplied
the test for determining whether a requirement listed in the SOW
is material and, as a result, non-waivable. RMD further argues
that the Director properly assessed the waivability of the
distance specification as of the time of the bid opening and
that the Appellate Division erred in accepting Barrick’s
supplementation of his bid submission.
In addition, according to RMD, the Appellate Division
should have dismissed Barrick’s appeal as moot because Barrick
did not seek a stay of the contract’s award, and RMD and the
Division reasonably proceeded with and completed renovations in
accordance with the SOW while the appeal was pending. RMD
contends that upholding the panel’s decision will discourage
future bidders from entering into public contracts in New
Jersey.
C.
Barrick argues that the Appellate Division properly
reversed the Director’s award of the lease to RMD. Barrick also
contends that petitioners are barred from raising the mootness
argument now because they failed to properly raise the argument
below. According to Barrick, the cases cited by petitioners to
support their mootness argument concerned nearly completed
construction contracts and are therefore irrelevant to the
instant action involving a lease for space. Barrick argues
10
that, even if those cases were relevant, the ten-year lease
period has yet to begin and, therefore, the disputed contract is
not substantially complete, as in the construction cases. He
contends that the instant appeal is therefore distinguishable.
III.
The public interest underlies the public-bidding process in
this State. This Court has several times recognized that well-
known purpose, stating that public bidding statutes exist
for the benefit of the taxpayers and are
construed as nearly as possible with sole
reference to the public good. Their objects
are to guard against favoritism,
improvidence, extravagance and corruption;
their aim is to secure for the public the
benefits of unfettered competition.
[Keyes Martin & Co. v. Dir., Div. of
Purchase & Prop., 99 N.J. 244, 256 (1985)
(quoting Terminal Constr. Corp. v. Atl.
Cnty. Sewerage Auth., 67 N.J. 403, 409-10
(1975)) (internal quotation marks omitted)
(citing Trap Rock Indus., Inc. v. Kohl, 59
N.J. 471, 479 (1971), cert. denied, 405 U.S.
1065, 92 S. Ct. 1500, 31 L. Ed. 2d 796
(1972)); see also In re DBC Project No.
A0716-00, 303 N.J. Super. 384, 396 (App.
Div. 1997) (noting same).]
N.J.S.A. 52:34-12(a)(g)5 governs the advertisement for bids
concerning leases and states that “award[s] shall be made with
reasonable promptness, after negotiation with bidders where
5
Formerly codified at N.J.S.A. 52:34-12(d), amended by L. 1986,
c. 72, and N.J.S.A. 52:34-12(f), amended by L. 1999, c. 440,
§ 96.
11
authorized, by written or electronic notice to that responsible
bidder whose bid, conforming to the invitation for bids, will be
most advantageous to the State, price and other factors
considered.” The public bidding statutory scheme vests
discretion in the Director of the Division to select which of
the responsive bids is “most advantageous to the State.”
N.J.S.A. 52:34-12(a). An agency’s choice from among responsible
bidders under N.J.S.A. 52:34-12(a)(g) is reviewed under the
gross abuse of discretion standard. See Keyes Martin & Co.,
supra, 99 N.J. at 252-53; Commercial Cleaning Corp. v. Sullivan,
47 N.J. 539, 548-49 (1966); In re Protest of Award of On-Line
Games Prod. & Operation Servs. Contract, 279 N.J. Super. 566,
592-93 (App. Div. 1995).
Although broad, the grant of discretion to the Director to
administer the public bidding process is not limitless. In line
with the policy goal of thwarting favoritism, improvidence,
extravagance, and corruption, the Division may not award a
contract to a bidder whose proposal deviates materially from the
RFP’s requirements. See In re On-Line Games Contract, supra,
279 N.J. Super. at 594-96, 602 (adopting test from Meadowbrook
Carting Co. v. Borough of Island Heights, 138 N.J. 307, 315
(1994), and defining materiality as “whether waiver of the
deviation would thwart the aims of the public bidding laws”).
Deviations from material specifications risk transgressing the
12
duty to avoid favoritism, corruption, and the like. Requiring
adherence to material specifications maintains a level playing
field for all bidders competing for a public contract. Thus,
requirements that are material to an RFP are non-waivable; the
winning bidder’s proposal must comply with all material
specifications. See In re Jasper Seating Co., 406 N.J. Super.
213, 219 (App. Div. 2009); In re On-Line Games Contract, supra,
279 N.J. Super. at 594.
Determinations as to whether a requirement is material, or
whether a bid conforms to the requirements of an RFP, are
reviewed under the ordinary standard governing judicial review
of administrative agency final actions. See In re On-Line Games
Contract, supra, 279 N.J. Super. at 593. Under that standard of
review, an appellate court will not upset an agency’s ultimate
determination unless the agency’s decision is shown to have been
“arbitrary, capricious, or unreasonable, or [] not supported by
substantial credible evidence in the record as a whole.” In re
Stallworth, 208 N.J. 182, 194 (2011) (alteration in original)
(quoting Henry v. Rahway State Prison, 81 N.J. 571, 579-80
(2007)) (internal quotation marks omitted); accord In re
Proposed Quest Acad. Charter Sch. of Montclair Founders Grp.,
216 N.J. 370, 385-86 (2013). That standard is applicable on
appellate review of an administrative agency’s actions
regardless of whether that action followed a quasi-adjudicative
13
hearing or, as in this case, an assessment of the relevant
submissions and standards by an administrative head. Cf. In re
Proposed Quest Acad. Charter Sch., supra, 216 N.J. at 386.
In applying that standard of review, “an appellate court
does not substitute its judgment . . . for that of [the]
administrative agency.” In re Young, 202 N.J. 50, 70 (2010)
(internal quotation marks omitted). Instead, a court’s inquiry
is limited to: (1) whether the agency’s action violated the
legislative policies expressed or implied in the act governing
the agency; (2) whether the evidence in the record substantially
supports the findings on which the agency’s actions were
premised; and (3) “whether in applying the legislative policies
to the facts, the agency clearly erred in reaching a conclusion
that could not reasonably have been made on a showing of the
relevant factors.” In re Carter, 191 N.J. 474, 482 (2007)
(quoting Mazza v. Bd. of Trs., 143 N.J. 22, 25 (1995)) (internal
quotation marks omitted); accord Circus Liquors, Inc. v.
Governing Body of Middletown Twp., 199 N.J. 1, 10 (2009); In re
Alleged Improper Practice Under Section XI, Paragraph A(d) of
the Port Auth. Labor Relations Instruction, 194 N.J. 314, 331-
32, cert. denied, 555 U.S. 1069, 129 S. Ct. 754, 172 L. Ed. 2d
726 (2008); In re Herrmann, 192 N.J. 19, 28 (2007).
With respect to the determination of whether an RFP
requirement must be regarded as material and, as a consequence,
14
non-waivable, the threshold step in the analysis is to determine
whether there is a deviation. See, e.g., In re Challenge of
Contract Award Solicitation No. 13-X-22694 Lottery Growth Mgmt.
Servs., __ N.J. Super. __, __ (App. Div. 2014) (slip op. at 30);
In re On-Line Games Contract, supra, 279 N.J. Super. at 594.
That determination necessarily must be made -- and made by the
Director of the Division responsible for administering the bid
proposal, review, and award process -- at the time that the bids
are opened. Cf. In re On-Line Games Contract, supra, 279 N.J.
Super. at 591. The timing requirement assures the bidders of an
even playing field and the public of a fair and impartial public
contract award process. Ibid. On review, a court’s role is to
examine the correctness of the Director’s determination based on
the information available to the Director at the time bids are
opened. See id. at 598 (holding “post-opening commitment to
supply an essential [item] missing from a bid” constitutes
“impermissible supplementation, change or correction”
incompatible with purpose of public bidding scheme).
If a deviation is found and the Director nonetheless makes
an award, then the analysis on appellate review must include two
inquiries. First, a reviewing court must assess “whether the
effect of a waiver would be to deprive the [public entity] of
its assurance that the contract will be entered into, performed
and guaranteed according to its specified requirements.” Id. at
15
594-95 (internal quotation marks omitted) (acknowledging that
analysis set forth in Meadowbrook Carting Co. is “applicable to
both state and local contract cases”); see also Weidner v. Tully
Envtl., Inc., 372 N.J. Super. 315, 325 (App Div. 2004); United
States v. Joint Meeting of Essex & Union Cntys., 997 F. Supp.
593, 600 (D.N.J. 1998). Second, the court must determine
whether the requirement at issue “is of such a nature that its
waiver would adversely affect competitive bidding by placing a
bidder in a position of advantage over other bidders or by
otherwise undermining the necessary common standard of
competition.” In re On-Line Games Contract, supra, 279 N.J.
Super. at 594-95 (internal quotation marks omitted).
IV.
Here, the Director’s decision, made at the time bids were
opened, included a determination that all qualified bidders had
submitted proposals involving properties that exceeded the SOW
requirement that the property be located within a quarter mile
of public transportation. The deviation that was found to exist
when the bids opened existed for all qualified bidders. We see
no error in the Director’s determination on that issue. The
Director relied on the submissions of the bidders as he was
required to do. See N.J.A.C. 17:11-6.7 to -6.10. Because the
moment that bids are opened is decisive for determining whether
bids are responsive on all or any part of the RFP requirements,
16
that is the point in time at which the Director’s deviation
determination should be judged. The Director correctly
determined that the bids deviated from the distance requirement.
The Director also correctly refused to consider Barrick’s
belated attempt to supplement his original bid proposal, long
after it had been submitted, or to adjust its method of
measurement of the property’s distance from public
transportation. The Division correctly judged each of the bid
proposals as deviating from the distance requirement based on
the original information submitted in each proposal. We
therefore conclude that the Appellate Division erred in
substituting its judgment for that of the Director and
determining Barrick’s bid to be conforming on the basis of its
amendatory material.
Thus, having determined that the Director correctly
perceived that the Division had received three bids that
deviated from the distance requirement, we turn to examine the
Director’s determination that the deviation was not material.
We thus must review the Director’s actions. Our review leads to
the conclusion that the Director’s materiality determination and
resultant award decision were unassailably reasonable and
consonant with the statutory process he is tasked with
administering.
17
Faced with three bids involving properties that exceeded
the quarter-mile specification, the Director properly consulted
with the procuring agency, here the DOL. In doing so, the
Director learned that the quarter-mile requirement was not a
legal requirement. It was not found in either a statute or a
regulation. The Director further determined, in consultation
with the DOL, that the distances by which the three bids
exceeded the distance requirement, were de minimus in nature.
All other requirements having been reviewed and no other
deviations being found, the Director concluded that cost-
effectiveness was the factor of paramount importance in the ten-
year lease being procured. Accordingly, the Director awarded
the bid to RMD, the lowest bidder. We conclude that the
Director’s award was entitled to deference on appellate review.
The decision to award the lease contract to RMD was not
arbitrary, capricious, or unreasonable. The Appellate Division
erred in setting aside the Division decision awarding the bid to
RMD.
V.
The State and RMD urge this Court to establish a bright-
line rule that would declare as moot appeals of bid awards where
an unsuccessful bidder fails to seek a stay when pursuing
appellate review of the bid award. The State and RMD make a
compelling argument that substantial funds were expended in
18
outfitting the property for use by the State. Further, they
point out that the lease procurement process involves the
expenditure of time and resources in securing the requisite
approval of the Space Utilization Committee that must precede
the State’s commitment to a long-term lease.
In light of our decision finding error in the Appellate
Division’s reversal of the Division’s award to RMD, we need not
address the parties’ arguments in favor of a bright-line rule in
favor of mootness when an unsuccessful bidder fails to seek a
stay in order to appeal a bid award. We note only that the
parties’ arguments highlight that an unsuccessful bidder, who
does not promptly seek a stay of a lease bid award under Rule
2:9-8 when appealing an award determination, acts at his, her,
or its peril.
For example, if the bidder does not seek a stay, by the
time the unsuccessful bidder’s appeal is heard the process of
securing multi-Branch approvals and expenditure of funds on a
building project -- whether it involves a lease or other
construction work -- likely will have proceeded apace and the
equities will be against the provision of relief on the merits.
We caution against any expectation that a merits review will be
readily available to such unsuccessful bidders who sit on their
right to seek a stay and simply hope for a remedy down the road.
The appellate process is equipped for stay applications in
19
bidding disputes and that relief ought to be pursued as a matter
of course.
Contractual matters in which the State and its public
entities engage must proceed with alacrity. The bidding
administrative process is premised on prompt identification,
review, and correction of any contracting process errors. See
N.J.A.C. 17:11-6.2 to -6.9. The State’s business and the public
interest in the State’s contractual endeavors should not be
unreasonably delayed while an unsuccessful bidder seeks another
level of review. Appellate review should be pursued with
similar alacrity. Rule 2:9-8 provides an avenue to accommodate
the interests of all parties in a swift and fair review of
alleged improprieties in the bid award process.
VI.
The judgment of the Appellate Division is reversed.
CHIEF JUSTICE RABNER and JUSTICES PATTERSON and FERNANDEZ-
VINA, and JUDGES RODRÍGUEZ and CUFF (both temporarily assigned)
join in JUSTICE LaVECCHIA’s opinion. JUSTICE ALBIN did not
participate.
20
SUPREME COURT OF NEW JERSEY
NO. A-8/9 SEPTEMBER TERM 2013
ON CERTIFICATION TO Appellate Division, Superior Court
MATTHEW J. BARRICK, JR.,
Appellant-Respondent,
v.
STATE OF NEW JERSEY,
DEPARTMENT OF TREASURY,
DIVISION OF PROPERTY
MANAGEMENT AND CONSTRUCTION,
Respondents-Appellants.
DECIDED July 23, 2014
Chief Justice Rabner PRESIDING
OPINION BY Justice LaVecchia
CONCURRING/DISSENTING OPINIONS BY
DISSENTING OPINION BY
CHECKLIST REVERSE
CHIEF JUSTICE RABNER X
JUSTICE LaVECCHIA X
JUSTICE ALBIN ----------------------- --------------------
JUSTICE PATTERSON X
JUSTICE FERNANDEZ-VINA X
JUDGE RODRÍGUEZ (t/a) X
JUDGE CUFF (t/a) X
TOTALS 6
1