IN THE MATTER OF BID SOLICITATION NO. 06-X-37623

 

NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-1264-05T31264-05T3

IN THE MATTER OF BID

SOLICITATION NO. 06-X-37623

______________________________

 

Argued: November 28, 2006 - Decided December 15, 2006

Before Judges Coburn, Axelrad and Gilroy.

On appeal from a Final Agency Decision of the Director, Division of Purchase and Property, Department of the Treasury, 06-X-37623.

Ronald L. Tobia argued the cause for appellant Tony Sanchez, Ltd. (Tobia & Sorger, attorneys; Mr. Tobia and Jamie E. Salzman, on the brief).

Cynthia Hackett, Deputy Attorney General, argued the cause for respondent State of New Jersey, Department of the Treasury (Stuart Rabner, Attorney General, attorney; Michael J. Haas, Assistant Attorney General, of counsel; Ms. Hackett, on the brief).

PER CURIAM

Tony Sanchez, an unsuccessful bidder, appeals from the final determination of the Director, New Jersey Department of the Treasury, Division of Purchase and Property ("Director"), upholding the award of a contract to the lowest bidder, Robert LaFerrara Construction ("LaFerrara"). The two-year contract was awarded on August 8, 2005 for roadway de-icing services for a segment of highway known as #227 Rockaway, Route 15 South, Rockaway, on Price Line l9 of the request for proposal (RFP). Sanchez filed a protest, contending LaFerrara was not a responsible bidder at the time of the bid because: (1) its trucks were improperly registered with "farmer" or "in-transit" plates; (2) upon information and belief, it carried improper or inadequate insurance coverage on its trucks; (3) upon information and belief, it maintained insufficient workers' compensation insurance on all drivers; (4) upon information and belief, based on the statements of a confidential informant, it did not pay federal multi-bidding or state income taxes on its drivers; (5) upon information and belief, based on the statements of a confidential informant, no unemployment compensation payments were made to the State on all drivers; (6) the size of the salt spreaders did not meet the specifications, which allegation is the subject of a confidential investigation; and (7) upon information and belief, it did not file IRS forms indicating payment of federal fuel tax.

Sanchez and his attorney made an oral presentation to the Director's representative, in the presence of Robert LaFerrara and his attorney and various State representatives. Sanchez contended the requirement in the RFP that the bidder list the license plate of the vehicles to be used in the de-icing operation implied the vehicles had to be properly registered at the time of the bid. According to Sanchez, LaFerrara's registration of his fleet as "farm" or "in-transit" vehicles constituted a material deviation from the specifications of the RFP and gave LaFerrara an unfair advantage over other bidders, such as Sanchez, who paid more for commercial registrations for their trucks. Sanchez also argued that LaFerrara improperly issued l099 forms to its drivers and treated them as independent contractors, even though they were driving its trucks, to avoid paying relevant state and federal taxes and workers' compensation insurance. Sanchez requested the Director investigate the status of LaFerrara's employees to determine whether they were, in fact, independent contractors. He also alleged LaFerrara was under a "confidential investigation" by Essex County as to whether its salt spreaders were of sufficient capacity to complete the contracts awarded by Essex County, and requested the Director contact the investigator. The unsuccessful bidder further requested the Director undertake an investigation into whether LaFerrara paid federal income and fuel taxes, state income taxes and unemployment compensation on all drivers.

At the hearing, Robert LaFerrara stated he paid all state and federal taxes. His attorney represented that the size of the salt spreaders was an issue that had been resolved; State and Essex County representatives had weighed LaFerrara's trucks and determined they complied with the contract.

On October l4, 2005, the Director issued a final agency determination upholding the award of the contract to LaFerrara, finding Sanchez had "not presented facts, information or arguments sufficient to disturb the intent of the State to award price line #000l9 to LaFerrara." In a comprehensive decision, the Director responded in detail to each issue raised by Sanchez in his protest and at the oral presentation, concluding the unsuccessful bidder failed to demonstrate LaFerrara's bid failed to conform to the RFP or that it was not a "responsible" bidder under the case law. According to the determination, the Director consulted the New Jersey Department of Transportation (DOT) on the issue of the spreader capacity and based on the information obtained, concluded LaFerrara's equipment conformed to the RFP requirements. The Director also contacted the Department of Labor and Workforce Development and was advised "it had no record of a past failure of LaFerrara to comply with the requirements of Worker's Compensation Insurance." The Director further learned, "[c]ontrary to the position advocated by Sanchez, . . . contracted individuals are not precluded from driving vehicles owned by the business entity contracting with the individual. In fact, the issuance of form l099 obligates the contracted individual to the payment of all appropriate taxes and assessments." The Director declined to further investigate LaFerrara's tax status, noting Sanchez "provided no facts supporting its assertions" of LaFerrara's nonpayment of taxes, and LaFerrara "stated that it has paid all required federal and State taxes."

On appeal, Sanchez argues the Director abused his discretion in upholding the award of the contract to LaFerrara, raising the same arguments as below. During oral argument appellant's counsel urged that the language of the Court in Keyes Martin & Co. v. Dir., Div. of Purchase, 99 N.J. 244, 256 (1985), that "[a] major objective of all public bidding statutes has been to promote the honesty and integrity of those bidding and of the system itself," required the Director to conduct a further investigation of LaFerrara before awarding the contract. We disagree. The Director has the discretion, but not the obligation, to request additional information in deciding a bid protest. See N.J.A.C. 17:12-3.4 ("The Director is entitled to request, receive and review copies of any and all records and documents deemed appropriate and relevant to the issues and arguments set forth in the protest."). The burden is on Sanchez, however, to present facts to the Director to support his bid protest. The unsuccessful bidder was provided the opportunity at the hearing to present evidence of his allegations of LaFerrara's non-conformity with the bid specifications and wrongdoing that would justify not awarding it the contract under N.J.S.A. 52:34-12a(g). All Sanchez presented, however, was rumor and speculation about LaFerrara's tax status, and assertions based on information "allegedly received as a result of conversations with an unidentified employee of NJDOT," which were "unsupported by facts in the record," and, in essence, asked the Director to undertake a "fishing" expedition. Even though he was under no obligation to do so, the Director turned to other State agencies to adduce additional facts to inform his decision. Based on our limited scope of judicial review, and our deference to the agency's expertise, we discern no basis to second-guess the Director's decision. See Keyes Martin & Co., supra, 99 N.J. at 253 (where the director of the state Division of Purchase and Property awards or rejects a bid, the courts will not reverse absent bad faith, corruption, fraud or gross abuse of discretion).

 
Affirmed.

The RFP sought bids for seventy-eight different segments or price lines for different highways. LaFerrara also bid on Price Line 25, which LaFerrara did not, and was awarded the contract.

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A-1264-05T3

December 15, 2006