H&S CONSTRUCTION AND MECHANICAL, INC. VS. WESTFIELD PUBLIC SCHOOLS (L-1111-18, UNION COUNTY AND STATEWIDE) ( 2018 )


Menu:
  •                          NOT FOR PUBLICATION WITHOUT THE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.
    13                          A-3696-17T4