Opinion
DOCKET NO. A-3051-12T2
06-28-2013
IN THE MATTER OF THE PETITION OF THOMAS-UNITED, INC., REGARDING THE AWARD OF THE CONTRACT FOR THE ATLANTIC CAPE COMMUNITY COLLEGE CULINARY ARTS PROJECT, Appellant, v. ATLANTIC CAPE COMMUNITY COLLEGE, Respondent. TODD DEVIN FOOD EQUIPMENT, INC., Intervenor-Respondent.
John F. Palladino argued the cause for appellant Thomas-United, Inc. (Hankin Sandman & Palladino; Evan M. Labov, on the briefs). Louis J. Greco argued the cause for respondent Atlantic Cape Community College. Robert E. Lytle argued the cause for respondent Todd Devin Food Equipment, Inc. (Szaferman, Lakind, Blumstein & Blader, P.C., attorneys; Mr. Lytle, on the brief).
NOT FOR PUBLICATION WITHOUT THE
APPROVAL OF THE APPELLATE DIVISION
Before Judges Fasciale and Maven.
On appeal from the Board of Trustees of the Atlantic Cape Community College.
John F. Palladino argued the cause for appellant Thomas-United, Inc. (Hankin Sandman & Palladino; Evan M. Labov, on the briefs).
Louis J. Greco argued the cause for respondent Atlantic Cape Community College.
Robert E. Lytle argued the cause for respondent Todd Devin Food Equipment, Inc. (Szaferman, Lakind, Blumstein & Blader, P.C., attorneys; Mr. Lytle, on the brief). PER CURIAM
Plaintiff Thomas-United, Inc. (Thomas), the second lowest bidder, appeals from the January 29, 2013 final decision of the Atlantic Cape Community College Board of Trustees (ACCC or the College), awarding its kitchen installation contract to Todd Devin Food Equipment, Inc. (Devin), the lowest bidder, for the Caesar Entertainment Wing for Hospitality & Gaming Studies Food Service Equipment Project, Re-Bid No. 1765R. We granted Thomas' application for a stay pending appeal, entered an order expediting the appeal, then granted Devin's motion to intervene in the appeal. We conclude that ACCC erred by determining that Devin's bid deviation was an immaterial and waivable defect, and by accepting a post-opening submission from Devin that altered its original proposal. We reverse.
No. M-4480-12 (App. Div. Apr. 9, 2013).
No. M-5558-12 (App. Div. May 29, 2013).
The factual context in which the issues arise is undisputed. On or about July 9, 2012, ACCC issued Bid No. 1765 for the Food Service Equipment Project (Project). Two addenda were issued on July 20 and August 30, 2012, each incorporating the original bid documents. ACCC published a notice to bidders for the rebidding of the Project on or about November 7, 2012. Along with this rebid notice, the College attached a bid submittal checklist, as it had with the original bid. On the same date, ACCC sent a letter directly to bidder Thomas informing it that the previously provided specifications and addenda applied to the rebid.
The rebid was "due to conflicting instructions in the specifications."
ACCC opened the bids on December 7, 2012. The two lowest bidders were Devin at $661,000 and Thomas at $662,492. Devin submitted an incomplete New Jersey Department of Treasury, Division of Property Management and Construction Form 701 for Uncompleted Contracts (Form 701) that left blank the line certifying the amount of uncompleted contracts. As part of its bid, however, Devin submitted the required Bidder Qualification Form indicating $10,000,000 worth of work in progress and under contract.
At oral argument, ACCC acknowledged that Thomas submitted a complete and conforming bid containing all of the documents required by the checklist, bid specifications and addenda.
On December 11, 2012, Thomas lodged a formal protest with the College seeking a rejection of Devin's incomplete bid and award of the contract to it, as the lowest responsive and responsible bidder. ACCC's counsel responded explaining that subsequent to the bid opening, Devin submitted a properly completed Form 701 indicating uncompleted contract totaling $9,425,000 against its authorized classification amount of $15,000,000. The letter further stated that
Neither ACCC nor Devin provided the completed Form 701 as part of the record on appeal.
the blank space left on the Uncompleted Contracts form by . . . Devin . . . , does not rise to a level of a material defect such that waiver of it would adversely affect competitive bidding. The apparent clerical error does not raise concerns regarding the bidder's ability to perform the contract, nor does it appear to either place the bidder in a position of advantage over others or undermine competition.
. . . .
Award of the contract to Devin has been recommended to the ACCC Board for action at its next meeting which is scheduled for December 18, 2012.
Following the ACCC board meeting at which the contract was awarded to Devin, Thomas petitioned the College to: (1) disqualify the bid submitted by Devin as non-responsive; (2) declare Thomas the lowest responsive and responsible bidder; and (3) award the contract to Thomas. The College adopted Resolution #46A on January 29, 2013 that denied the appeal and confirmed the award of the contract to Devin. This appeal followed.
On appeal, Thomas raises two arguments:
I. [Devin's] bid was non-conforming as demonstrated by its non-compliance with the clear letter of the College's bidding requirements and State Treasury regulations and the College's post-opening decision to permit . . . Devin to supplement its bid package.
II. The defect in . . . Devin's bid was material and non-waivable as it precluded the College from awarding a contract without a post-opening supplementation, provided an unfair advantage to . . . Devin, and frustrated the legislative policy that the public bidding process should remain open to public scrutiny.
I.
To begin, we briefly set forth the statutory and legal framework pertaining to public bidding. The bidding regulations for the ACCC Project are contained in the County College Contract Law, N.J.S.A. 18A:64A-25.1 to -25.43, as well as in the law promulgated for the Division of Property Management and Construction (DPMC or Division), Chapter 19, Classification and Prequalification of Firms, N.J.A.C. 17:19-2.13.
A.
Pursuant to N.J.S.A. 52:35-3, the DPMC preclassifies bidders that wish to become eligible to submit bids on public works projects. The classification process is conducted in accordance with the provisions of N.J.A.C. 17:19-2.1 to -2.7. See also N.J.S.A. 18A:18A-27. Each classified bidder's aggregate rating must be calculated in accordance with the formula prescribed by N.J.A.C. 17:19-2.8. The aggregate rating, which is based on a variety of financial factors, including the bidder's working capital, bonding capacity and performance rating, determines the amount of the proposed contract on which it may bid. N.J.A.C. 17:19-2.8. At the conclusion of the classification process, the DPMC issues the bidder a notice of classification that includes the maximum amount of public work on which it is qualified to bid.
N.J.A.C. 17:19-2.13 provides, in pertinent part, as follows:
(a) A firm shall include with each bid a statement of the current value and status of its backlog of uncompleted construction work (not to include "non-at-risk" construction management contracts) as of the bid due date and a certification that the award of the subject contract would not cause the firm to exceed its aggregate rating.
. . . .
(c) A firm shall not be awarded a contract which, when added to its backlog of uncompleted construction work, as shown on Form DPMC 701, would exceed the firm's aggregate rating. . . .
[(Emphasis added).]
DPMC Form 701 requires a bidder to certify as follows:
I [c]ertify that the amount of uncompleted work on contracts is $ ____.
The amount claimed includes uncompleted portions of all currently held contracts from all sources (public and private) in accordance with N.J.A.C. 17:19-2.13.
I further certify that the amount of this bid proposal, including all outstanding incomplete contracts does not exceed my prequalification dollar limit.
[Dep't of the Treasury, Div. of Prop. Mgmt. and Construction, Total Amount of Uncompleted Contracts (March 2005), available athttp://www.state.nj.us/treasury/dpmc/Assets/ Files/dpmc%20701%2003_11.pdf (last visited June 18, 2013).]
B.
The general purpose of all bidding laws is "to secure for the taxpayers the benefits of competition and to promote the honesty and integrity of the bidders and the system." Matter of Protest of Award of On-Line Games Production and Operation Services Contract, Bid No. 95-X-20175 (On-Line Games), 279 N.J. Super. 566, 589 (App. Div. 1995). "Their objects are to guard against favoritism, improvidence, extravagance and corruption; their aim is to secure for the public the benefits of unfettered competition." Terminal Constr. Corp. v. Atl. Cnty. Sewerage Auth., 67 N.J. 403, 410 (1975). One of the key functions of the contracting agency is to ascertain whether each bidder on a contract is a responsible bidder and whether each submitted bid conforms to the requirements of the Request for Proposal (RFP) or bid specifications. Through bid conformity and bidder responsibility review, "the contracting unit is assured of equality among bidders, of the financial and ethical ability of the bidders to perform, and of performance of the contract in accordance with the RFP." On-Line Games, supra, 279 N.J. Super. at 593. "The preliminary inquiry is whether the bid deviates from the RFP. If there is no deviation, the bid must be deemed conforming. If there is a deviation, a decision must be made as to whether it is material and can be waived." Id. at 594.
The New Jersey Supreme Court has determined that the "'distinction between conditions that may or may not be waived stems from a recognition that there are certain requirements often incorporated in bidding specifications which by their nature may be relinquished without there being any possible frustration of the policies underlying competitive bidding.'" Terminal Constr. Corp., supra, 67 N.J. at 412; see Barrick v. State, _ N.J. Super. _, _ (App. Div. 2013) (slip op. at 13). "However, 'advertised conditions whose waiver is capable of becoming a vehicle for corruption or favoritism, or capable of encouraging improvidence or extravagance, or likely to . . . influence any potential bidder to refrain from bidding, . . . are the kind of conditions which may not under any circumstance be waived.'" Ibid. Also, according to the Supreme Court, "[i]t is firmly established in New Jersey that material conditions contained in bidding specifications may not be waived." Terminal Constr. Corp., supra, 67 N.J. at 411. This rule "does not apply to minor or inconsequential conditions." Ibid.
In Meadowbrook Carting Co. v. Borough of Island Heights, 138 N.J. 307 (1994), the Supreme Court adopted the two-prong test espoused in Township of River Vale v. R.J. Longo Construction Co., 127 N.J. Super. 207, 216 (Law Div. 1974), to determine whether a deviation from the RFP is non-waivable. The materiality test is:
[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.This test is flexible and permits the contracting agency to "evaluate the entire RFP and determine the overall importance of the omission to it as a whole." On-Line Games, supra, 279 N.J. Super. at 600. "If the answer to both questions is no, then the deviation may be waived." Barrick, supra, _ N.J. Super. at _ (slip op. at 14).
[Meadowbrook, supra, 138 N.J. at 315 (citations omitted) (internal quotation marks omitted).]
II.
Applying these well-established principles to this case, we first resolve that it is undisputed that Devin submitted an incomplete Form 701 as part of its bid omitting pivotal information sought, namely the amount of its outstanding contracts. ACCC recognized that the bid was non-conforming due to this deviation; however, it reasoned that the "apparent clerical error" resulting in the omission of the stated amount of uncompleted contracts, "does not rise to the level of a material defect such that waiver of it would adversely affect competitive bidding." We cannot agree with the College's determination that the omission of the completed form was not material for the reasons to be discussed.
A.
The first step in the Meadowbrook test to determine the materiality of the bid deviation requires us to consider "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." Meadowbrook, supra, 138 N.J. at 315.
We have made clear that the submission of Form 701 containing the dollar amount of outstanding uncompleted contracts furthered the Legislature's intent "to ensure that only qualified bidders perform the work." 40 N.J.R. 3959(a) (2008); Brockwell & Carrington Constrs., Inc. v. Kearney Bd. of Educ., 420 N.J. Super. 273, 280 (App. Div. 2011). More particularly, we considered the materiality of Form 701 in the context of a contractor's financial qualification to bid in Seacoast Builders Corp. v. Jackson Township Bd. of Educ, 3 63 N.J. Super. 373 (App. Div. 2003). In that case, Seacoast challenged the acceptance of a competitor's bid alleging that the base bid combined with the bid alternatives exceeded that bidder's aggregate bid rating. Id. at 377. We recognized the obligation of the contracting agency to assess the bidder's qualifications to ensure that the bidder is financially capable of undertaking the contracted work, and held that sections (a) and (c) of N.J.A.C. 17:19-2.13 must be complied with at the time of the bid. Id. at 378. We held that it is "plain that the bidder must include with its bid the required certification that the bid does not exceed its aggregate rating less uncompleted work and that that condition must also be met at the time of the bid award." Ibid. We then concluded that "the plain intent of the regulation [N.J.A.C. 17:19-2.13 i]s to insure the bidder's financial responsibility to undertake the work by requiring aggregate-rating compliance both when the bid is submitted and when the contract is awarded." Ibid.
Additionally, our current reading of N.J.A.C. 17:19-2.13 takes particular note of the use of the mandatory word — shall — which connotes to us that the submission of Form 701 is required to be submitted at the time of the bid.
Next, we turn our review to the Project bid specifications, which also indicated that the submission of Form 701 was required. Following the initial advertisement for Bid No. 1765, the College issued Addendum No. 1 on July 20, 2012, which included a statement that:
The original Contract Documents dated July 9, 2012 are amended, as noted in Addendum No. 1, which shall become part of the said Contract Documents, as if originally included therein.
. . . .
2. BID SUBMITTAL CHECKLISTS: Contractors shall use the revised Bid Submittal Checklists for BIDS 1764 & 1765 that are attached to this Addendum No. 1.
3. BID FORMS: BID NUMBER 17 64 & 17 65: Change Paragraph 1.07 APPENDICES as follows: The documents listed in the BID SUBMITTAL CHECKLIST for each respective Contract form
an integral part of this BID FORM and are required to be submitted with the BID.
[(Emphasis added).]
The BID SUBMITTAL CHECKLIST identifies twelve items to be submitted, including the Bidder Qualification Form/Contractor's Work History and Form 701.
Next, on August 30, 2012, Addendum No. 6 was issued incorporating the prior contract documents and Addendum No. 1, and included the following statement: "See Also the attached NOTICE OF CLASSIFICATION FORM: DBC 701, AND TOTAL AMOUNT OF UNCOMPLE[TE]D CONTRACTS: examples of forms required by the Contractors and Subcontractors." Lastly, on or about November 7, 2012, along with a Notice of Rebid, the College notified Thomas that the previously provided specifications and addenda applied to the rebid.
Here, a plain and commonsensical reading of the bid documents, and the College's letter to Thomas, signals an express intention by the College to make the submission of Form 701 essential to the bid submission and required it to be submitted at the time of the bid. Neither ACCC nor Devin refutes this interpretation.
Taken as a whole, the College's emphasis on the submission of the form, coupled with the regulatory purpose and decisional law regarding the bidding process, and specifically Form 701, lead us to conclude that the submission of a fully completed Form 701 at the time of submission was a material element of the bid.
Further, the courts have been called to consider the materiality of an omitted or non-conforming bid submission on a number of occasions. In re Jasper Seating Co., Inc., 406 N.J. Super. 213 (App. Div. 2009), we considered the language of an RFP containing two express and material provisions. First, the submitted price list "must remain firm for the first [eighteen] months of the contract," and second, the price list "must not contain any sticker increases." Id. at 224. The bidder, nonetheless, submitted a bid with sticker price increases. Ibid. We found that "the Division explicitly informed bidders that there must be no ambiguity in [the] bids." Ibid. We determined that the clear and unequivocal language of the bid's provisions did not permit any exceptions to the clear prohibition of price stickers. Ibid.
In DeSapio Construction, Inc. v. Township of Clinton, 276 N.J. Super. 216, 217 (App. Div. 1994), we considered whether the failure to provide a consent of surety in the form, as required by the bid specifications, was a material non-waivable defect. We determined that the requirement for the consent to surety was necessary to assure the municipality that a surety company would provide the bond for a bidder should it be awarded the contract. Id. at 221. We concluded that by not providing the form at the time of bid, the municipality had no assurance the contract would be fulfilled, and applying a strict standard furthered the greater public policy good in ensuring the integrity of the bidding process. Ibid.
This court has also concluded that the failure to submit a certified financial statement with a bid for a public contract is a material defect. In Impac, Inc. v. Paterson, 178 N.J. Super. 195, 202 (App. Div.), certif. denied, 87 N.J. 414 (1981), the low bidder submitted a financial statement, but the statement was not "certified . . . [to be] fully itemized in accordance with accepted accounting standards and based on a proper audit," as required by the bid solicitation. In concluding that this defect was not waivable, we stated:
There is no merit to the argument that this requested financial information constitutes an immaterial variance or surplusage which the city could waive, since, for example, the performance bond submitted by [the defendants] guaranteed its financial capability. Even if [the defendants] interpreted the questionnaire to require only an unaudited statement, other contractors may have been deterred from submitting a bid because they reasonably believed that they would have to submit an audited statement certified by an independent accounting firm. To allow [the defendants] to escape this requirement would negate the principle of keeping all bidders
on an equal footing. . . .
Moreover, although Meadowbrook did not involve a bidder's failure to submit a certified financial statement, the Court's opinion noted that:
The Legislature obviously regarded the financial capacity of a bidder to be a material and substantial consideration in the determination of the lowest responsible bidder, as evidenced by its adopting separate provisions within the Local Public Contracts Law to provide municipalities with a means of requiring prospective bidders to furnish, in advance, a statement of their financial capacity.Lastly, in Township of Hillside v. Sternin, 25 N.J. 317, 323 (1957), the Supreme Court also opined that "the financial capacity of a bidder is a material and substantial consideration in connection with the award of contracts for public work." See Meadowbrook, supra, 138 N.J. at 322; see also P & A Constr., Inc. v. Twp. of Woodbridge, 365 N.J. Super. 164, 172 (App. Div. 2004).
[Supra, 138 N.J. at 322.]
We draw from these cases that if a bid specification requires the submission of documentation related to a bidder's financial capacity to accept or perform the contract, the failure to comply with that requirement may constitute a material deviation if the deficiency impacts the contracting agency's ability to assess the bidder's financial viability at the time of the bid.
In our case, the incomplete Form 701 is similar to the omitted or deficient documents in the cited cases, all of which were relevant to the contracting entities' ability to assess the financial wherewithal of the bidders. Viewing the non-conforming bid here in light of Meadowbrook, we conclude that the Devin bid deviation was material and therefore non-waivable.
B.
To explain why the College considered the defect waivable, it presented three justifications for its action. The College argued:
The College's argument was contained in its brief in opposition to appellant's motion for emergent relief, filed March 14, 2013, which served also as its merits brief for the appeal, without update or supplement.
--------
In the instant matter, a bid bond was furnished by the low bidder thus eliminating the first part of the [Meadowbrook] test. No evidence was submitted by [Thomas] to demonstrate how the omission of the uncompleted contract information item would give one bidder an advantage over another. The amount of uncompleted contracts stated by the low bidder, albeit a day late[,] is well within its permitted authorization, inclusive of this bid. The amount stated by the low bidder has not been challenged by [Thomas]. Under these circumstances[,] the [ACCC] Board of Trustees found the defect waivable under the Meadowbrook test.
The [ACCC] Board of Trustees['] exercise of discretion in waiving the defect under these circumstances is not arbitrary when considering that the bid defect is an objectively measurable number which is not in dispute and cannot be manipulated.
We find these bases insufficient to support the waiver of the defect. The first Meadowbrook test, addresses the contracting entity's assurance of the bidder's ability to accept and perform the contract. Contrary to ACCC's contention, the bid bond does not absolve the College of its obligation to critically assess each bidder. Nor is the provision of a bid bond mere "surplusage" that ACCC could waive, Impac, supra, 178 N.J. Super. at 202, because the provision of a bid bond serves an entirely different purpose than Form 701. A bid bond is a guarantee that the bidder will meet the requirements of its bid, see 10 Municipal Corporations § 29.73, at 604-05 (McQuillin) (3d rev. ed. 2010) ("Deposit or Other Security"), and assures the contracting agency that the selected bidder will enter in a contract for the bid work risk forfeiture of the bond. The purpose of Form 701 is to assure the contracting agency that the bidder has the financial capacity under its aggregate rating to take on another contract. See N.J.A.C. 17:19-2.13.
The Supreme Court had rejected this same argument. In Meadowbrook, the Supreme Court determined that:
[The claim] that the municipality can retain the amount of the bid bond does not necessarily assure that the low bidder will enter into or perform the contract. If the low bidder determines that its bid is too low and that its prospective loss on the contract exceeds the amount of its bid bond, that low bidder may decide to forfeit its security rather than incur a greater loss by performing the contract.Applying that principle here makes clear that misapplication of a bid bond for the purpose suggested by ACCC would not cure Devin's non-conforming bid. Rather, the potential to forfeit the bid bond, perhaps, as argued by Thomas, upon learning the competitor's bid prices, gives the non-complying bidder a significant advantage over its competitors. Accordingly, we reject this proffered reason.
[Supra, 138 N.J. at 321.]
The College's second justification asserts that Thomas did not submit any evidence to demonstrate how the omission of the uncompleted contract information item would give one bidder an advantage over another. This reason is equally groundless. The second inquiry under the Meadowbrook test asks whether the bid deviation 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. Thomas posits that Devin gained an advantage over the other bidders first by not engaging in the time-consuming process of accounting for their uncompleted projects in the course of preparing the bid submittal, and second, by creating for itself the option, upon learning the competitors' prices at the bid opening, of not correcting its deficient submission, thereby abandoning its bid, discussed above.
Experienced contractors are aware that they must read bid specifications thoroughly and carefully to ensure that every necessary item is provided in its submission, and then assemble all of the required documents. The completion of Form 701 requires the bidder to review the status of each of its ongoing contracts to distill, at that moment, the percentage of completion of each project and the dollar amount of outstanding work. To be sure, Form 701 is a document that public works bidders are accustomed to submitting, the completion of which, depending on the bidder, can indeed consume a considerable amount of time.
Devin argued that the clerical error on Form 701 was a bid deviation that was not material and was therefore waivable because the omitted information was provided elsewhere in the bid in the Bidder Qualification Form. Although the record does not indicate the reason for the omission, if it was due to a clerical error, Devin's argument belies the significance contract agencies place on compliance with the bid specifications. As discussed earlier, the regulations and specifications repeatedly reference the documents that needed to be submitted. Merely asserting that the omitted information was elsewhere in the bid submittal is not a satisfactory justification to waive the defect.
A review of Devin's Bidder Qualification Form and attachment listing its outstanding projects highlight the problem in the bid created by the submission of conflicting figures for their uncompleted contracts three times in the bid submittal. In the Bidder Qualification Form, they represented $10,000,000; in their attached list of uncompleted contracts, the five projects totaled $6,028,000. In the supplemental Form 701, they represented $9,425,000 in outstanding work.
As noted, ACCC, as the contracting agency, is required by the DPMC and its enabling law to assure the financial wherewithal and qualifications of bidders to perform contracts at the time of the bid submission. The College was faced with either two conflicting figures at the time of the bid opening, or three conflicting figures with the post-bid submittal from which they needed to determine if Devin had capacity, pursuant to its aggregate rating, to undertake this contract, if awarded. Though the College ultimately concluded that the threshold had not been met, a point we will shortly discuss, the College either did not notice the inconsistencies in these figures or overlooked them in reaching its decision. Notably, in its response to Thomas' protest, ACCC indicated that "staff is aware of no reason to question the veracity of . . . [Devin's] certification." Had the College closely and carefully reviewed the bid submission these obvious inconsistent representations would have observed. Following therefrom, ACCC not only should have had reason to question this bid, we maintain, that the College had an obligation, in reviewing the bid submittal, to ensure the accuracy and veracity of Devin's certification.
Its failure to question the veracity of this information provided, coupled with its acceptance of the non-conforming bid in the first instance, created an unfair advantage to Devin over the other bidders in the bidding process. See Meadowbrook, supra, 138 N.J. at 315 (the second step in the materiality test is "whether the effect of [the] waiver . . . is of such a nature that it[] . . . 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.").
We further reject Devin's claim that the College could have awarded the contract to it based on its initial bid package that included the amount of uncompleted contracts in another document. ACCC does not aver in its December 14, 2012 letter or its legal brief that it was aware that the Bidder Qualification Form or its attachment contained such information, or that the bid review staff considered that information in lieu of Form 701 in their waiver determination. Rather, we adopt Thomas' cogent argument that public policy mandates that the contracting agency may not award a contract without first considering the firm's backlog of uncompleted construction work, as shown on Form 701. At the time of the bid opening, the College could not have been assured that Devin was within its aggregate rating from its form, as the critical information was omitted. Even if ACCC had looked to other bid documents as Devin suggested, that should have signaled a sizable ambiguity in its submission, the difference between $10,000,000 and $6,028,000 in outstanding projects, such that ACCC, hypothetically, could have disqualified Devin's bid on that basis alone.
As a result of the foregoing, the College's inability to assess the financial qualifications of the low bidder at the time of the bid opening, as required by N.J.A.C. 17:19-2.13, substantiates our inescapable conclusion that the bid deviation was material and non-waivable.
Next, we reject the College's contention that there is no offense to the public bid process because Devin's approved aggregate authorization limit would not be exceeded by this contract award. This "ends justifies the means" reasoning by the College completely ignores the probability that the defect in Devin's bid, and the resulting conflicting information provided, would deprive ACCC of its assurance that the contract would be entered into and performed to completion. In essence, considering all of the arguments posed by ACCC and Devin to the contrary, we conclude that the College offers no plausible explanation to support its determination that the submission of the incomplete Form 701 was immaterial, and thus, waivable.
III.
Finally, the College erred further by permitting Devin to supplement its bid after the bid opening. The New Jersey Supreme Court has observed that: "Settled principles of public bidding dictate that no material element of a bid may be provided after bids are opened . . . to prevent any possibility of favoritism." George Harms Constr. Co. v. N.J. Tpk. Auth., 137 N.J. 8, 37 (1994); see N.J.A.C. 17:12-2.2(a)-(b) (failure to include required forms and attachments results in automatic rejection of bid). A deviation from an RFP may not be remedied by clarification once the bids are opened. In supplementing, changing or correcting a proposal, the bidder alters what is already there. On-Line Games, supra, 279 N.J. Super. at 598; cf. Jasper, supra, 406 N.J. Super. at 223-24 (clarification of bid post-opening permissible if modified term was immaterial).
Here, Devin's post-bid submission of the completed Form 701, purportedly indicates a total amount of $9,425,000 in uncompleted projects, a figure that differs from the amount listed in the Bidder Qualification form, and from its attached list of uncompleted contracts. Whether viewed as a clarification of the Bidder Qualification form or its attachment or an amplification of the incomplete Form 701, Devin's post-opening submission constitutes an impermissible alteration of its bid. On-Line Games, supra, 279 N.J. Super. at 598.
At oral argument, Devin's counsel explained the discrepancies by suggesting that contracts may have been completed between the date of the bid opening and the later date when it submitted the complete form to ACCC, thereby reducing the amount of outstanding projects from $10,000,000 to $9,425,000. We are neither convinced nor persuaded by this explanation. Moreover, we find that Devin's attempt to minimize the import of its deficient bid, and ACCC's willingness to accept the late submission without acknowledging the inconsistencies, portends the precise reason post-bid openings are denounced. If permitted to stand, ACCC's waiver of the defect in Devin's bid, and their allowance of the post-bid submission has the potential of being viewed by the public as "a vehicle for corruption or favoritism, or capable of encouraging improvidence or extravagance, or likely to . . . influence any potential bidder to refrain from bidding." Terminal Constr. Corp., supra, 67 N.J. at 412. We cannot reconcile that outcome with the overwhelming public policy to the contrary. As such, we declare that ACCC's actions are indefensible and undermine the integrity of the bidding process.
IV.
In sum, we are satisfied that in the first instance, the submission of an incomplete Form 701 was a material and non-waivable defect. Further, accepting the post-opening submission was improper as it had the capacity to "undermine the stability of the public-bidding process." Meadowbrook, supra, 138 N.J. at 321. In the end, ACCC was without discretion to recommend the award of the Project to Devin.
As we reverse and remand this matter to ACCC, we must determine whether the College should be granted the option to award the contract to Thomas or to rebid it, or be directed to award the contract to Thomas. We analyzed these options in Jasper in light of the public benefits or detriment. There, we balanced the general discretion of the contracting agency with the public interest. We reasoned that:
[T]he Director, at her discretion, may reject all bids and re-bid the entire procurement if it is in the public's best interest to do so.With our determination that Devin's bid was fatally defective, Thomas becomes the next lowest responsive and responsible bidder. In our analysis, we consider first the fiscal impact and note that Thomas submitted a complete and conforming bid that was only $1492 higher. The cost of rebidding the Project for a third time will assuredly exceed that amount. We presume that the College, like most public institutions, would rather not spend monies unnecessarily.
. . . .
[R]ebidding a contract is fraught with certain dangers. While in some circumstances rebidding will benefit the public through achieving a lower price, the converse result of a higher contract price is also a factor to be considered. The low bidders who gave their best possible bid may be discouraged and drop out of subsequent bidding rounds. Or, other bidders by reason of insight gained through revelation of the competition's bidding strategy may see the weaknesses in their own bids.
[Jasper, supra, 406 N.J. Super. at 227 (citations omitted) (internal quotation marks omitted).]
Next, we consider the time element necessary to complete a rebid and the impact on the ongoing project. In particular here, the general contract for the Caesar Entertainment Wing for Hospitality & Gaming Studies Food Service Equipment Project, is currently underway, a portion of which includes constructing the space and installing the infrastructure for this kitchen equipment installation Project. We were advised by Thomas, without any refute from the College, that six months' time is reasonably necessary to prepare for the equipment installation, from contract award to installation of the kitchen equipment, and the College advised at oral argument that the kitchen installation is anticipated for 2014. The College certainly expects its projects to be completed as close to time and budget as reasonably possible, and the curriculum staff may be anticipating the use of this building by a specified time. Given that six months has already been expended on this appeal, we have expedited our review of this matter and do not intend to contribute to any further delay.
As such, in consideration of the above, we deem it in the public interest to direct ACCC on remand to award the contract of the project to Thomas, as the next lowest responsible and responsive bidder. This outcome is consistent with the County College Contract Law, N.J.S.A. 18A:64A-25.19, which provides that, "[a]ll purchases, contracts or agreements which require public advertisement for bids shall be awarded by the board of trustees to the lowest responsible bidder." In addition, it provides ACCC a significant benefit, namely the saving of time and expense of a third rebidding.
Accordingly, we reverse and remand this matter to ACCC with direction to award the kitchen installation contract to Thomas.
We do not retain jurisdiction.
I hereby certify that the foregoing is a true copy of the original on file in my office.
CLERK OF THE APPELLATE DIVISION