ERNEST BOCK & SONS, INC. VS. NEW JERSEY SCHOOLS DEVELOPMENT AUTHORITY (NEW JERSEY SCHOOLS DEVELOPMENT AUTHORITY)

NOT FOR PUBLICATION WITHOUT THE
APPROVAL OF THE APPELLATE DIVISION
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SUPERIOR COURT OF NEW JERSEY
APPELLATE DIVISION
DOCKET NO. A-1767-17T3
ERNEST BOCK & SONS, INC.,
Appellant,
v.
NEW JERSEY SCHOOLS
DEVELOPMENT AUTHORITY
and TERMINAL CONSTRUCTION
CORPORATION,
Respondents.
_______________________________
Submitted February 13, 2019 – Decided March 8, 2019
Before Judges Koblitz and Mayer.
On appeal from the New Jersey Schools Development
Authority.
Hankin Sandman Palladino & Weintrob, attorneys for
appellant Ernest Bock & Sons, Inc. (John F. Palladino,
Evan M. Labov, and Elizabeth J.C. Duquette, on the
briefs).
Dilworth Paxson LLP, attorneys for respondent New
Jersey Schools Development Authority (James H.
Landgraf, on the brief).
Peckar & Abramson, PC, attorneys for respondent
Terminal Construction Corporation (Patrick J. Greene,
Jr., on the brief).
PER CURIAM
Petitioner Ernest Bock & Sons, Inc. (Bock) appeals from a final agency
decision by respondent New Jersey Schools Development Authority
(Authority), awarding a bid to design and build a school facility to respondent
Terminal Construction Corporation (Terminal). Bock contends Terminal's
failure to include a complete copy of a portable digital file (PDF) of its bid was
a material defect and therefore the bid should have been awarded to Bock. We
disagree and affirm.
The facts relevant to the Authority's bid award are straightforward. On
June 13, 2017, the Authority advertised bids for the design and build of the
Dayton Avenue Educational Campus Project (Project). Bid proposals for the
Project were due October 5, 2017.
In its advertisement, the Authority solicited a Request for Proposals (RFP)
for the Project. The RFP required each bidder to submit an electronic PDF copy
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of its technical proposal,1 in addition to an unbound original and seven bound
hard copies of the technical proposal. In accordance with the RFP, a bidder's
"failure to include any of [the] required documents, or its failure to fully and
properly complete [the] required documents may result in the rejection of its
[t]echnical [p]roposal as non-responsive, and disqualify the [bidder] . . . ." The
RFP also indicated the Authority "reserve[d] the right to waive technicalities"
in the bid documents.
The Authority created a committee to review all bids and apply the
weighted process set forth in the RFP. After applying the weighted review, the
Authority ranked Terminal's bid first and Bock's bid second. Thus, Terminal
was the approved bidder.
On November 11, 2017, Bock issued a formal protest letter, objecting to
the Authority's award of the bid to Terminal. Originally, Bock lodged two
objections to the Authority's bid award. On appeal, Bock only contends the
Authority's bid award was improper because Terminal's bid was defective.
According to Bock, Terminal's failure to submit a complete PDF version
of the technical proposal rendered Terminal's bid defective. Terminal's PDF
1
The technical proposal included the identification of subcontractors designated
to perform work on the Project.
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copy of the technical proposal lacked a complete organizational chart and the
required subcontractor forms. However, Terminal provided the required
information in the original and seven hard copies of its technical proposal
submitted to the Authority in paper format.
After considering Bock's protest letters and Terminal's response, the
Authority issued a final agency decision. In a written decision, dated December
5, 2017, the Authority rejected Bock's protest to the bid award. The Authority
concluded the RFP did not identify submission of a complete electronic copy of
the technical proposal as a basis for rejecting a bid. In addition, the Authorit y
noted Terminal submitted the original and seven hard copies of its technical
proposal, containing the required information. The Authority determined, "to
the extent that the electronic copy did not fully match the original hard copy
submission may be a technical defect, it is not a material one . . . . The
[Authority] is within its discretion to waive non-material defects in bid
submissions." It also rejected Bock's contention that Terminal had more time to
submit its technical proposal by not completing the PDF copy. The Authority
found Terminal had no more time for its submission than any other bidders and
thus gained no competitive advantage. On December 7, 2017, the Authority
awarded the $163.5 million contract for the Project to Terminal.
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Bock appeals, arguing Terminal's bid was materially defective because the
PDF copy of its technical proposal was incomplete.
Our review of an agency action is limited. See In re Taylor, 158 N.J. 644,
656 (1999). Absent a showing that the agency action was "arbitrary, capricious,
and unreasonable," Henry v. Rahway State Prison, 81 N.J. 571, 580 (1980), or a
result of "bad faith, corruption, fraud, or gross abuse of discretion ," we will
affirm the agency's decision. In re Jasper Seating Co., Inc., 406 N.J. Super.
213, 222 (App. Div. 2009) (quoting Commercial Cleaning Corp. v. Sullivan, 47
N.J. 539, 548 (1966)).
The agency action under review in this case is the award of a public bid.
The primary goal of the public bidding statutes is to "guard against favoritism,
improvidence, extravagance, and corruption . . . ." Barrick v. State, 218 N.J.
247, 258 (2014) (quoting Keyes Martin & Co. v. Dir., Div. of Purchas & Prop.,
99 N.J. 244, 256 (1985)). Public bidding laws are designed "to secure for the
taxpayers the benefits of competition and to promote the honesty and integrity
of the bidders and the system . . . ." In re Protest of Award of On-Line Games
Prod. and Operation Servs. Contract, Bid No. 95-X-20175, 279 N.J. Super. 566,
589 (App. Div. 1995).
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Bidding contracts "must be awarded not simply to the lowest bidder," but
to the bidder whose proposal is deemed to be the most advantageous,
considering "price and other factors . . . ." Meadowbrook Carting Co. v.
Borough of Island Heights & Consol. Waste Servs., Inc., 138 N.J. 307, 313
(1994); N.J.S.A. 52:18A-243(c). An agency may not make an award to a bidder
"whose proposal deviates materially" from the bid specifications or
requirements. Barrick, 218 N.J. at 259. Our Supreme Court has held
"[r]equiring 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." Ibid. On the other hand, an agency may waive
provisions as immaterial where the agency is provided with the required
information. See Palamar Constr., Inc. v. Pennsauken Twp., 196 N.J. Super.
241, 256 (App. Div. 1983) (holding failure to provide a bidder qualification
document was a waivable defect).
In reviewing whether a bid requirement is material and cannot be waived,
the Supreme Court established a two-part test. The test requires the following
determinations:
[F]irst whether the effect of a waiver would be to
deprive the [agency] of its assurance that the contract
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will be entered into, performed and guaranteed
according to its specified requirements and second,
whether [the deviation] 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.
[On-Line Games, 279 N.J. Super. at 594-95 (quoting
Twp. of River Vale v. Longo Constr. Co., 127 N.J.
Super. 207, 216 (Law Div. 1974)).]
We are satisfied Terminal's failure to submit a complete PDF copy of the
technical proposal was not a material deviation because Terminal's hard copy
submissions identified the subcontractors and provided a full organizational
chart. The Authority's decision to waive the defect in Terminal's submission did
not deprive the agency of its assurance that the contract would be performed
because Terminal's hard copy documents provided all of the required
information to the Authority.
Nor did the Authority's waiver give Terminal an unfair competitive
advantage over other bidders. The Authority found Terminal was not given
additional time to negotiate with subcontractors. To the contrary, the Authority
determined "all bidders were given exactly the same amount of time to complete
and submit [the] bid documents."
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The Authority rejected Bock's claim that by omitting information in the
PDF copy of the technical proposal, Terminal was able to negotiate with
subcontractors until the "last possible moment," thereby gaining a competitive
advantage over other bidders. According to Bock, completion of a PDF copy of
the technical proposal required Bock "to stop negotiating, select its
subcontractors, fill out its original bid documents, then create the PDF [c]opy of
all the documents, including those naming its subcontractors, and finally timely
deliver both its original bid documents and the PDF [c]opy . . . ." According to
Bock, the "need for the PDF [c]opy froze Bock's . . . negotiation process earlier
than would occur in normal circumstances . . . ." Bock contends that because
Terminal did not produce a complete PDF copy with its hard copy bid
submission, Terminal had a "literal time advantage" over all other bidders.
Bock's argument that Terminal was able to "slip" information into its bid
proposal at the last minute is unsupported by the record. Terminal's hard copy
proposal included the names of subcontractors in typed format, evidencing that
Terminal completed and printed the hard copy documents prior to submitting all
documents to the Authority and therefore nothing was added at the last moment.
Although Terminal's bid failed to include a complete PDF copy, the
Authority did not err in waiving that defect because it was immaterial. As our
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Supreme Court has recognized, "minor or inconsequential discrepancies and
technical omissions can be the subject of waiver." Meadowbrook, 138 N.J. at
314.
Nor did Terminal's failure to submit a complete electronic PDF copy of
its bid afford a "post-bid advantage by subverting the review efforts of potential
challengers." Bock and the other bidders were permitted to inspect Terminal's
hard copy bid submission at the Authority's office. Bock clearly inspected both
the hard copy and the PDF copy of Terminal's bid based on Bock's protest letter.
Based on our review of the record, we are satisfied the Authority's
decision to award the bid to Terminal was not arbitrary, capricious, or
unreasonable. The Authority had the right to reject bids based on material
deficiencies, as well as the power to waive technical, immaterial deficiencies.
The Authority properly determined the defect in Terminal's submission of its
PDF copy of the bid was immaterial and could be waived because the
information was included in Terminal's hard copy of the bid document. In
addition, the agency had Terminal's assurance regarding its performance
obligations based on the information provided in the hard copy of the bid
proposal, and the lack of the information in the PDF copy of the bid proposal
did not give Terminal an improper competitive advantage over other bidders.
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Affirmed.
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