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

NOT FOR PUBLICATION WITHOUT THE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.
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