SUBURBAN DISPOSAL INC v. TOWNSHIP OF ABERDEEN

NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-0

SUBURBAN DISPOSAL, INC.,

Plaintiff-Appellant,

v.

TOWNSHIP OF ABERDEEN and

FUTURE SANITATION, INC.,

Defendants-Respondents.

Telephonically argued February 7, 2014 Decided May 23, 2014

Before Judges Reisner, Alvarez and Ostrer.

On appeal from the Superior Court of New Jersey, Law Division, Monmouth County, Docket No. L-1327-12.

Richard D. Trenk argued the cause for appellant (Trenk, DiPasquale, Della Fera & Sodono, PC, attorneys; Mr. Trenk, of counsel and on the briefs; Mark Y. Moon and Kevin J. Duffy, on the briefs).

Diane U. Dabulas argued the cause for respondent Township of Aberdeen (Rogut McCarthy, LLC, attorneys; Ms. Dabulas, on the brief).

John F. Chiaia argued the cause for respondent Future Sanitation, Inc. (Chiaia & Associates, LLC, attorneys; Mr. Chiaia, on the brief).

PER CURIAM

Plaintiff Suburban Disposal, Inc., appeals the March 7, 2013 dismissal of its verified complaint in lieu of prerogative writs seeking the award of a public contract as the lowest responsive, responsible bidder. Defendant Future Sanitation was awarded the solid waste hauling contract at issue by defendant Township of Aberdeen. We affirm.

Aberdeen issued the bid specification packets in December 2011. The documents were prepared by David J. Samuel of Consulting and Municipal Engineers Associates (CME), and detailed the requirements for Contract 1, "SOLID WASTE AND RECYCLABLE MATERIAL COLLECTION SERVICES," and Contract 2, "SINGLE STREAM RECYCLABLE MATERIALS MARKETING." Bidders were invited to submit proposals for either or both contracts.

The bid specifications required submission of a current public works contractor registration certificate (Certificate). On February 14, 2012, after the issuance of the initial packet, CME provided prospective bidders with a "General Clarification Revised" (GC1), consisting of questions posed by bidders and CME's/Aberdeen's responses. On February 21, 2012, CME issued "ADDENDUM NO. 1" (ANO), which amended certain language from the specifications, and amended the answer to a prospective bidder question found in GC1. Attached to the ANO were five pages that became part of the bid specifications packet, including page 50a. Page 50a was an "ACKNOWLEDGMENT OF RECEIPT OF CHANGES TO BID DOCUMENTS" acknowledging receipt of an unrevised version of GC1, the revised version of GC1, and ANO by signed acknowledgment of the documents from an authorized representative of the bidder.

On February 23, 2012, CME issued a "General Clarification No. 2" (GC2) which stated: "This general clarification is hereby issued to provide additional clarification and information to prospective bidders." GC2 went on to revise the answer from GC1 to "Question 7." The question and revised response read:

Question 7: Given that the 3 30 yd. recycling containers at the DPW yard seem to fall under Contract 2, a confirmation of annual loads hauled is necessary. The cost for hauling these apparently needs to be built into the contractors [sic] marketing rate, so accurate numbers are important. Given that no price for more than twice a week service is asked for on these containers under Contract 2, it would appear that this number could be over stated? [sic]Would you consider a per container charge?

Response: No, a per container charge will not be considered at this time. See below for the Values of loads hauled.

In addition, GC2 provided in pertinent part:

CONCERNING THE SPECIFICATIONS AND CONTRACT DOCUMENTS

SECTION 7 BIDDING DOCUMENTS

ACKNOWLEDGMENT OF RECEIPT OF CHANGES TO BID DOCUMENTS FORM: Kindly prepare and submit the attached form with your submission documents.

Remove Page 50a issued as part of [ANO] in its entirety and replace with the attached Page 50b as part of the Bidding Documents.

Page 50b mirrored page 50a, except that the list of documents to be acknowledged also included GC2. Like page 50a, page 50b stated:

Pursuant to N.J.S.A. 40A:11-23[(c)(1) to (3)], the undersigned bidder hereby acknowledges receipt of the following notices, revisions, or addenda to the bid advertisement, specifications or bid documents. By indicating date of receipt, bidder acknowledges the submitted bid takes into account the provisions of the notice, revision or addendum. Note that the local unit's record of notice to bidders shall take precedence and that failure to include provisions of changes in a bid proposal may be subject for rejection of the bid.

Suburban and Future submitted timely bids on Contract 1. Suburban bid $2,607,750 and Future bid $2,716,375. Suburban did not include page 50b. CME initially wrote to Aberdeen stating that Suburban was the lowest bidder, received positive references from another municipality, and was, therefore, being recommended for the award of Contract 1. After review by Aberdeen's counsel, the bid was rejected because the attorney considered the omission of page 50b to be a "[f]atal [f]law" mandating rejection. Future's bid was therefore accepted.

Future's bid packet included a Certificate that had expired on April 25, 2011. Up-to-date Certificates were subsequently provided, establishing that Future was properly registered during the time in question.

In her decision dismissing Suburban's complaint, Judge Linda Grasso Jones found that GC2 was a "'notice or revision[] or addenda.'" Thus, submission of page 50b, the acknowledgment of receipt of the document, was "a mandatory, nonwaivable part of the submission by bidders." See N.J.S.A. 40A:11-23.2(e). She explained that even though the February 23, 2012 memo was titled "'Clarification,'" the document "constituted a change for which acknowledgment of receipt was required" by the bid documents themselves. She further observed that, since the item fit within subsection (e) of the statute, the bid, by law, had to be rejected regardless of materiality.

Judge Jones further found that the failure of the municipality to publish legal notification of the change, pursuant to N.J.S.A. 40A:11-23(c)(3), was irrelevant. Suburban challenged Aberdeen's failure to publish after the bids had been opened, obviously less than three days before they were opened, thereby negating any potential effect failure to publish may have had on the bid requirement. She further found that the failure by Future to provide a current Certificate was a waivable requirement because it was not one of the mandatory items listed under N.J.S.A. 40A:11-23.2. It was, therefore, reasonable for Aberdeen to have exercised its discretion and accepted that bid. Future's failure to provide a current Certificate would not

deprive Aberdeen of the assurance that Future would in fact enter into the contract, or "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," because the contract in question is not a public works contract subject to prevailing wage requirements under N.J.S.A. 34:11-56.51.

In other words, regardless of whether the Certificate was expired, the bidder's projected labor costs would not be affected. Therefore, Aberdeen's acceptance of the bid was not arbitrary, capricious, and unreasonable, despite the absence of a current Certificate. She also rejected Suburban's claims on other grounds not relevant to our discussion. Judge Jones also concluded, contrary to Future's position, that Suburban did not lack standing to challenge the contract award.

On appeal, Suburban raises the following issues for our consideration:

POINT I

ACKNOWLEDGMENT OF RECEIPT OF GENERAL CLARIFICATION 2 CONCERNING THE MARKETING OF RECYCLABLE MATERIALS WAS NOT A MANDATORY REQUIREMENT FOR CONTRACT 1.

POINT II

CLARIFICATION 2 DID NOT CONSTITUTE NOTICE OF REVISIONS OR ADDENDA AS THE LOCAL PUBLIC CONTRACTS LAW MANDATES THAT ADDENDUM TO SOLID WASTE COLLECTION BID SPECIFICATIONS BE ADVERTISED.

POINT III

THE CLARIFICATION EMBODIED IN PAGE 50b WAS NEVER A MANDATORY ITEM UNDER [N.J.S.A.] 40A:11-23.2.

POINT IV

UNDER THE MATERIALITY ANALYSIS ARTICULATED IN MEADOWBROOK OMISSION OF PAGE 50b IS A WAIVABLE DEFECT.

POINT V

FUTURE SANITATION'S FAILURE TO SUBMIT A CURRENT AND VALID PUBLIC WORKS CONTRACTOR REGISTRATION WAS A MATERIAL DEFECT THAT REQUIRED REJECTION OF FUTURE SANITATION'S BID AS FATALLY DEFECTIVE.

In an additional point heading, Future reiterates its argument before the trial judge that Suburban lacked standing.

I

When construing a law, we do so de novo without according any special deference to the trial court. U.S. Bank v. Hough, 210 N.J. 187, 198-99 (2012). Generally, a municipality must "public[ally] advertis[e] for bids" on any contract that would "in the aggregate . . . exceed in a [] year the total sum of $17,500." See N.J.S.A. 40A:11-3(a). Such a contract "shall be awarded only by resolution of the governing body of the contracting unit to the lowest responsible bidder after public advertising for bids and bidding therefore." N.J.S.A. 40A:11-4(a). New Jersey's Local Public Contracts Law (LPCL) defines "[l]owest responsible bidder" to mean "the bidder or vendor: (a) whose response to a request for bids offers the lowest price and is responsive; and (b) who is responsible." N.J.S.A. 40A:11-2(27).

"[T]he purpose of [the LPCL] is to ensure that bidding is fair and free from fraud . . . ." Entech Corp. v. City of Newark, 351 N.J. Super. 440, 457 (Law Div. 2002). "The fundamental philosophy of [the LPCL] is that economy be secured and extravagance, fraud and favoritism prevented." See Kotter v. Twp. of E. Brunswick, 160 N.J. Super. 462, 469 (App. Div. 1978) (internal quotations omitted). "The object of public bidding is not the protection of the individual interests of the bidders but rather the advancement of the public interest in securing the most economical result by inviting competition in which all bidders are placed on an equal basis . . . ." 426 Bloomfield Ave. Corp. v. City of Newark, 262 N.J. Super. 384, 387 (App. Div. 1993) (internal quotation marks omitted). In order to "safeguard the public good," the LPCL "should be rigidly enforced by the courts." See Entech, supra, 351 N.J. Super. at 457 (internal quotation marks omitted).

II

The LPCL provides that certain mandatory requirements for bidders include, as set forth in subsection (e), required acknowledgements of "notice[s] or revisions or addenda to . . . bid documents." See N.J.S.A. 40A:11-23.2. As we have previously said, the statute

requires rejection of any bid that does not include all of the mandatory items set forth therein. . . . N.J.S.A. 40A:11-23.2 forecloses a contracting agency from even considering whether the failure to submit any of those items is immaterial . . . . Furthermore, one of the items that N.J.S.A. 40A:11-23.2 makes nonwaivable under any circumstances is a bidder's written acknowledgment of receipt of any notice or revisions or addenda to the advertisement or bid documents, which would not obviously be considered material and hence nonwaivable in the absence of an explicit legislative directive. Thus, N.J.S.A. 40A:11-23.2 circumscribes the authority of local contracting agencies to waive bid defects by designating five kinds of defects that cannot be waived under any circumstances.

[P & A Constr., Inc. v. Twp. of Woodbridge, 365 N.J. Super. 164, 176-77 (App. Div. 2004) (citations and internal quotation marks omitted).]

The statute does not define the phrase "notice or revisions or addenda."

In support of its appeal, Suburban relies heavily upon dicta found in an unpublished opinion that states that clarifications do not require acknowledgment in writing. Even if the opinion had precedential value, which it does not, the point was not essential to the decision and does not inform our analysis.

Suburban asserts that acknowledgment of GC2 was not statutorily required because it was neither a notice, revision, or addenda, and, accordingly, materiality is the relevant test. Hence since GC2 only concerned Contract 2, Suburban concludes, its failure to acknowledge was immaterial. In further support of its argument, Suburban again contends that had the information in GC2 been a notice, revision, or addendum, Aberdeen would have been required to advertise it pursuant to N.J.S.A. 40A:11-23(c)(3). Additionally, Suburban contends, its failure to include page 50b in the bid was a waivable defect, relying upon Meadowbrook Carting Co. v. Borough of Island Heights, 138 N.J. 307, 314 (1994).

The relevant statute, N.J.S.A. 40A:11-23.2, applies to enumerated documents that are "required by the bid plans and specifications." In other words, where "the bid plans and specifications" require a specific document, its inclusion becomes "mandatory . . . at the time specified by the contracting unit for the receipt of the bids." N.J.S.A. 40A:11-23.2. Additionally, a bidder's failure to timely submit an enumerated document "shall be deemed a fatal defect that shall render the bid proposal unresponsive and that cannot be cured by the governing body." Ibid.; see P & A Constr., Inc., supra, 365 N.J. Super. at 176-77. The term a "document" as used in subsection (e) of the statute means those items "provided by the contracting agent in the bid plans, specifications, or bid proposal documents." A "document" is encompassed by the statute if the government agency requests "the bidder to acknowledge the [] receipt of any notice or revisions or addenda to the advertisement or bid documents." N.J.S.A. 40A:11-23.2(e).

In this case, 50b, sent to all prospective bidders, was a part of the bid proposal packet. Aberdeen requested endorsement and inclusion of it. Thus, to the extent that GC2 was a "notice or revision[] or addend[um]," it was included in the statutory definition of a "document." See N.J.S.A. 40A:11-23.2. Aberdeen made inclusion of page 50b mandatory.

Notably, GC2 specifically stated: "This general clarification is hereby issued to provide additional clarification and information to prospective bidders." Aberdeen did not limit the requirement that 50a be replaced with 50b to only those parties submitting bids on Contract 2.

That page 50b was "[a] document provided by the contracting agent in the bid plans, specifications or bid proposal documents to be returned," N.J.S.A. 40A:11-23.2(e), is also evident from the face of GC2. After all, GC2 stated:

CONCERNING THE SPECIFICATIONS AND CONTRACT DOCUMENTS

SECTION 7 BIDDING DOCUMENTS

ACKNOWLEDGMENT OF RECEIPT OF CHANGES TO BID DOCUMENTS FORM: Kindly prepare and submit the attached form with your submission documents.

Remove Page 50a issued as part of [ANO] in its entirety and replace with the attached Page 50b as part of the Bidding Documents.

GC2 directed bidders to "prepare and submit" page 50b with their "submission documents" and replace page 50a with page 50b. Ibid.

Two more points regarding page 50b are noteworthy. First, page 50b was, literally, numbered "50b," leaving little doubt that it was intended to be included in the bid packet. See Pa117. Second, page 50b stated: "[F]ailure to include provisions of changes in a bid proposal may be subject for rejection of the bid." Ibid. That language instructed that inclusion of an acknowledged page 50b (the document on which the quoted language was printed) was mandatory, or, put differently, "required by the bid plans and specifications." See N.J.S.A. 40A:11-23.2.

The distinction Suburban seeks to make by describing the information contained in GC2 as a "clarification" and, thereby, not included in the statute is specious. In the absence of a statutory definition, we employ the ordinary meaning of words. See In re Application of Taylor, 196 N.J. 162, 172-73 (2008). A "notice" includes a "written or printed announcement." See Black's Law Dictionary 1087 (7th ed. 1999). Drawing on the plain meaning of the words used, that CME described the information as a "clarification" did not mean it fell outside of the statutory scope, where the preparer considered the document significant enough to require written acknowledgement of receipt by all those submitting bids. The statutory language contained in subsection (e) covers a broad range of documents. It gives governmental agencies the discretion to include within the scope of mandatory items those things which it, in consultation with relevant professionals, considers important to the completion of a public project.

Because we conclude that the acknowledgment of GC2 required by the inclusion of page 50b brought page 50b within the scope of N.J.S.A. 40A:11-23.2(e), we do not reach Suburban's contention that the fact that the information affected only Contract 2 made it immaterial. In any event, that is not a distinction made in either GC2 or 50b. If it were so, 50b would have stated that only those bidders submitting proposals for Contract 2 needed to replace 50a with 50b in the completed packet. In the absence of such a limitation by Aberdeen, we will not interfere and create one.

The purpose behind the LPCL is to avoid favoritism, fraud, or other improper conduct by which the public could be shortchanged with regard to purchases of goods or services made by government. That purpose is advanced by the enforcement of the statute, which mandates rejection for failure to include enumerated items. Aberdeen elected to make page 50b a mandatory item, and we see no reason not to enforce the requirement. See Skakel v. Twp. of N. Bergen, 37 N.J. 369, 378 (1962).

It bears mentioning that the bid documents for Contracts 1 and 2 were packaged together. Aberdeen, therefore, had good reason to ensure that all the proposals would be on equal footing, to not distinguish whether a proposal was being made on Contract 1, Contract 2, or both, assuming such a difference exists. After all, the question that was addressed by GC2 was framed in terms of the prospective bidder's assumption, phrased as a question, that the matter at issue related solely to Contract 2.

Turning to Suburban's assertion that GC2 did not need to be acknowledged because it was not advertised, that argument also lacks merit. N.J.S.A. 40A:11-23.2(e) does not limit "notice[s] or revisions or addenda" to documents that have been advertised pursuant to N.J.S.A. 40A:11-23(d). In any event, N.J.S.A. 40A:11-23(d) provides grounds for invalidating an entire bidding process where the municipality has not properly advertised. Suburban did not seek invalidation of the entire bidding process in its complaint; rather, it sought the award of the Contract 1. N.J.S.A. 40A:11-23(d) is immaterial to this appeal.

In sum, we agree with the trial court that Suburban's failure to include 50b in its proposal was not a waivable defect. Aberdeen made 50b a mandatory bid document pursuant to N.J.S.A. 40A:11-23.2(e). Thus, Aberdeen's rejection of the bid was not arbitrary, capricious, or unreasonable. See Penpac, Inc. v. Morris Cnty. Mun. Util. Auth., 299 N.J. Super. 288, 296 (App. Div.), certif. denied, 150 N.J. 28 (1997).

III

N.J.S.A. 34:11-56.52(a) requires public works contractors to register with the Department of Labor and Workforce Development. N.J.S.A. 34:11-56.51 provides that "[n]o contractor shall bid on any contract for public work . . . unless the contractor is registered pursuant to this act."

In Meadowbrook Carting Co., supra, 138 N.J. at 314, the Supreme Court explained that, under the LPCL, "minor or inconsequential discrepancies and technical omissions can be the subject of waiver." The test for materiality is two-prong:

[F]irst, whether the effect of a waiver would be to deprive the municipality of its assurance that the contract will be entered into, performed and guaranteed according to its specified requirements, and second, whether it 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.

[Id. at 315 (internal citations and quotation marks omitted).]

Future was unquestionably registered throughout the bidding process, although it failed to include proof to Aberdeen by way of the current Certificate. We agree with the trial court that this was a minor discrepancy or technical omission that was properly the subject of a waiver.

The first prong of the materiality test examines "whether the effect of a waiver would be to deprive the municipality of its assurance that the contract will be entered into, performed and guaranteed according to its specified requirements." Ibid. (internal quotation marks omitted). That Future was validly registered but had not provided an up-to-date Certificate did not deprive Aberdeen of assurance that the contract would be entered into, performed, and guaranteed.

The second prong of the test concerns whether the omission is one that defeats the purpose of competitive bidding by placing one bidder over another. See ibid. In light of the fact that Future was properly registered, nothing about Future's failure to provide an up-to-date Certificate placed it above the other bidders or in any fashion gave it an advantage over other bidders.

IV

Lastly, we agree with Judge Jones that because Suburban's bid submission was fatally flawed did not in any respect defeat standing. As the Supreme Court has stated, failure to challenge bid specifications on a timely basis results not in a loss of standing, but merely a failure to comply with the statute of limitations. See Jen Elec., Inc. v. Cnty. of Essex, 197 N.J. 627, 631 (2009).

Affirmed.