IN THE MATTER OF THE PROTEST OF DENIAL OF PRE-QUALIFICATION APPLICATION OF ABC TOWING FOR ZONE 195 OF THE NEW JERSEY TURNPIKE

NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-0

IN THE MATTER OF THE PROTEST

OF DENIAL OF PRE-QUALIFICATION

APPLICATION OF ABC TOWING FOR ZONE

195 OF THE NEW JERSEY TURNPIKE.

November 25, 2015

Argued November 2, 2015 Decided

Before Judges Messano and Carroll.

On appeal from the New Jersey Turnpike Authority.

Steven M. Davis argued the cause for appellant ABC Towing (Albert Buzzetti & Associates, LLC, attorneys; Mr. Davis, on the briefs).

John F. Casey argued the cause for respondent New Jersey Turnpike Authority (Chiesa Shahinian & Giantomasi, PC, attorneys; Mr. Casey, on the brief).

PER CURIAM

Appellant ABC Towing (ABC) appeals from a final agency decision of the New Jersey Turnpike Authority (the Authority) denying its prequalification application to perform routine towing services on the New Jersey Turnpike (the Turnpike). For the reasons that follow, we dismiss the appeal as moot.

The Authority is a state agency responsible for the operation of the Turnpike. In that capacity, it awards contracts to qualified towing companies to tow cars from the Turnpike. Towing companies are selected pursuant to a two-step process. First, interested towing companies must obtain prequalification status by demonstrating that they possess, among other things, the requisite reliability, experience, equipment, and storage facilities. N.J.A.C. 19:9-2.13(d). Second, once the prequalification process is complete, the Authority issues a request for bids to provide towing services, which it then awards to the lowest prequalified bidders for particular zones of the Turnpike. N.J.A.C. 19:9-2.13(b).

In June 2013, ABC submitted a prequalification application seeking to become a towing service provider on the Turnpike. As part of the prequalification process, the Authority conducts an unannounced inspection of the applicant's facility to verify compliance with its prequalification specifications. A team of Authority inspectors viewed ABC's Fort Lee facility on July 11, 2013. The inspectors "observed that there was no sign present at the location, and that there were insufficient tools and parts as required by the [p]requalification [a]pplication." They further noted that ABC's storage area appeared insufficient "to store the minimum of [fifty] cars." Also, the location of ABC's facility on Route 46 and its narrow driveway "would make it difficult [or] impossible to maneuver and fit tractor trailers into the storage area," and would require that traffic be stopped on the highway.

On January 13, 2014, the Authority informed ABC by letter that its prequalification application was denied because ABC had an (a) inaccessible storage area; (b) insufficient tools inventory; and (c) insufficient parts inventory. The letter further advised ABC that "[a]n applicant aggrieved by a decision as to its prequalification status may request, in writing, a hearing pursuant to a process outlined in Regulations of the Authority."

Upon receipt of the Authority's denial, ABC filed a Notice of Protest. In a letter dated January 20, 2014, counsel for ABC asserted that the Authority's "determination was arbitrary and capricious as it is without a factual basis" and that "ABC [] meets all three of the aforementioned minimum requirements." Counsel requested a hearing so that ABC could offer "testimony and [] submit documentary evidence . . . in support of its protest."

On January 27, the Authority acknowledged receipt of the protest and informed ABC that, in accordance with N.J.A.C. 19:9-2.12, bid solicitation would not proceed until the agency resolved ABC's protest. On May 28, the Authority's executive director issued a final written decision advising ABC that

The Authority inspected the premises . . . on July 11, 2013, and determined that, due to the physical constraints of ABC's facility, tractor trailers or buses could not be moved into the facility's storage area without completely blocking Route 46 to all traffic. This is unacceptable, and does not meet the minimum requirements of the Request for Prequalification. The Authority further observed at that time that there were insufficient tools and parts in order to perform the repairs required under the Request for Prequalification. Any later addition of tools or parts on the premises does not form a valid basis to protest the denial of ABC Towing's Prequalification Application, as all applications must be judged on the condition of the facility at the time of application.

In sum, the Authority has considered your protest, and has determined that the assertions made are unpersuasive in light of the Authority's clear evidence to the contrary. Accordingly, your request for a formal hearing is denied, and your protest of the denial of ABC's Prequalification Application is denied.

Subsequently, ABC wrote to the Authority requesting that it "reconsider the decision to deny ABC['s] request for a formal hearing." ABC stated in its letter that it had not provided any supporting documentation for its contentions because it was "under the impression from previous hearings with the Authority that all supporting documentation would be presented at the hearing." On July 1, 2014, the Authority declined to reconsider the matter. This appeal followed.

Our role in reviewing an administrative agency's decision is limited. In re Carter, 191 N.J. 474, 482 (2007). An agency determination will not be vacated "in the absence of a showing that it was arbitrary, capricious or unreasonable, or that it lacked fair support in the evidence." Ibid. (quoting Campbell v. Dep't of Civil Serv., 39 N.J. 556, 562 (1963)). Under this standard, appellate review is limited to four inquiries

(1) whether the agency's decision offends the State or Federal Constitution; (2) whether the agency's action violates express

or implied legislative policies; (3) whether the record contains substantial evidence to support the findings on which the agency based its action; and (4) 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.

[Karins v. City of Atl. City, 152 N.J. 532, 540 (1998) (quoting George Harms Constr. Co. v. N.J. Tpk. Auth., 137 N.J. 8, 27 (1994)).]

"The burden of demonstrating that the agency's action was arbitrary, capricious or unreasonable rests upon the person challenging the administrative action." Seigel v. N.J. Dep't of Envtl. Prot., 395 N.J. Super. 604, 613 (App. Div.), certif. denied, 193 N.J. 277 (2007).

Moreover, "[d]eference to an agency decision is particularly appropriate where interpretation of the Agency's own regulation is in issue." I.L. v. Div. of Med. Assistance & Health Servs., 389 N.J. Super. 354, 364 (App. Div. 2006); see H.K. v. Div. of Med. Assistance & Health Servs., 379 N.J. Super. 321, 327 (App. Div.), certif. denied, 185 N.J. 393 (2005); see also Estate of F.K. v. Div. of Med. Assistance & Health Servs., 374 N.J. Super. 126, 138 (App. Div.) (indicating that we give "considerable weight" to the interpretation and application of regulations by agency personnel within the specialized concern of the agency), certif. denied, 184 N.J. 209 (2005). This same deferential standard applies to our review of a determination challenging a bid's conformity with State requirements. DGR Co. v. State, Dep't of Treas., Div. of Prop. Mgmt. and Constr., 361 N.J. Super. 467, 474 (App. Div. 2003) (citing In re On-Line Games Contract, 279 N.J. Super. 566, 593 (App. Div. 1995)).

On appeal, ABC no longer asserts that it is entitled to a "formal" "trial-type" hearing. Nonetheless, it argues that it was never afforded a fair opportunity to present facts that would demonstrate that it did satisfy the Authority's prequalification criteria. As a result, ABC submits that the agency's decision disqualifying it from bidding on Turnpike towing contracts was arbitrary and capricious.

The Authority argues that it appropriately decided ABC's protest upon the written exchanges of the parties and that no formal hearing was necessary to resolve the factual contentions advanced by ABC. In support of its position that its regulations allow but do not mandate such a hearing, the Authority relies on N.J.A.C. 19:9-2.12(b), which provides in relevant part that

[u]pon the filing of a timely protest, the Executive Director or his or her designee shall have the authority to conduct a hearing, to settle and resolve a protest of an aggrieved bidder, offeror or contractor concerning the solicitation or award of a contract or its prequalification status or classification, with the Executive Director retaining authority for the final decision of the Authority.

As noted, ABC concedes that the Authority was not required to afford it a trial-type hearing to address its protest. Nevertheless, "an informal hearing or conference should be granted" if a dissatisfied applicant requests one. Commercial Cleaning Corp. v. Sullivan, 47 N.J. 539, 550 (1966). Accordingly, a protesting bidder, such as ABC, should at least be "afforded . . . a fair opportunity, consistent with the desideratum of a fair and expeditious conclusion of the procurement process, . . . to present the facts and law supporting the protest." Nachtigall v. N.J. Tpk. Auth., 302 N.J. Super. 123, 143 (App. Div.), certif. denied, 151 N.J. 77 (1977).

We would thus ordinarily be inclined to remand the matter to the Authority to conduct an informal hearing on ABC's factual assertions that it satisfied the Authority's prequalification specifications. However, we decline to do so here, since we were informed at oral argument that the towing contracts for which ABC sought prequalification status have already been awarded to other qualified bidders. Consequently, the matter is moot as we are unable to grant ABC any effective relief at this point in the proceeding. See Barrick v. State, 218 N.J. 247, 263-64 (2014).

While ABC filed a timely appeal, it did not seek a stay of the Authority's decision. Our Supreme Court, in the context of an award for the lease of office space, recently cautioned 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." Barrick, supra, 218 N.J. at 263. We therefore decline ABC's request at oral argument that we re-open the bidding, to the detriment of other towing companies who are not parties to this dispute and whose contractual rights stand to be impaired were we to direct such action.

Summarizing, we conclude that a ruling in ABC's favor would not grant it any effective relief at this juncture of the proceedings. We are therefore constrained to dismiss its appeal as moot. In doing so, we do not foreclose ABC from submitting a new application in the future should it be able to demonstrate compliance with the Authority's prequalification requirements.

Appeal dismissed.