ERNEST BOCK & SONS, INC. VS. NEW JERSEY SCHOOLS DEVELOPMENT AUTHORITY (NEW JERSEY SCHOOLS DEVELOPMENT AUTHORITY)

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APPROVAL OF THE APPELLATE DIVISION
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SUPERIOR COURT OF NEW JERSEY
APPELLATE DIVISION
DOCKET NO. A-1767-17T3

ERNEST BOCK & SONS, INC.,

Appellant,

v.

NEW JERSEY SCHOOLS
DEVELOPMENT AUTHORITY
and TERMINAL CONSTRUCTION
CORPORATION,

Respondents.
_______________________________

Submitted February 13, 2019 – Decided March 8, 2019

Before Judges Koblitz and Mayer.

On appeal from the New Jersey Schools Development
Authority.

Hankin Sandman Palladino & Weintrob, attorneys for
appellant Ernest Bock & Sons, Inc. (John F. Palladino,
Evan M. Labov, and Elizabeth J.C. Duquette, on the
briefs).
 Dilworth Paxson LLP, attorneys for respondent New
Jersey Schools Development Authority (James H.
Landgraf, on the brief).

Peckar & Abramson, PC, attorneys for respondent
Terminal Construction Corporation (Patrick J. Greene,
Jr., on the brief).

PER CURIAM

Petitioner Ernest Bock & Sons, Inc. (Bock) appeals from a final agency

decision by respondent New Jersey Schools Development Authority

(Authority), awarding a bid to design and build a school facility to respondent

Terminal Construction Corporation (Terminal). Bock contends Terminal's

failure to include a complete copy of a portable digital file (PDF) of its bid was

a material defect and therefore the bid should have been awarded to Bock. We

disagree and affirm.

The facts relevant to the Authority's bid award are straightforward. On

June 13, 2017, the Authority advertised bids for the design and build of the

Dayton Avenue Educational Campus Project (Project). Bid proposals for the

Project were due October 5, 2017.

In its advertisement, the Authority solicited a Request for Proposals (RFP)

for the Project. The RFP required each bidder to submit an electronic PDF copy

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of its technical proposal,1 in addition to an unbound original and seven bound

hard copies of the technical proposal. In accordance with the RFP, a bidder's

"failure to include any of [the] required documents, or its failure to fully and

properly complete [the] required documents may result in the rejection of its

[t]echnical [p]roposal as non-responsive, and disqualify the [bidder] . . . ." The

RFP also indicated the Authority "reserve[d] the right to waive technicalities"

in the bid documents.

The Authority created a committee to review all bids and apply the

weighted process set forth in the RFP. After applying the weighted review, the

Authority ranked Terminal's bid first and Bock's bid second. Thus, Terminal

was the approved bidder.

On November 11, 2017, Bock issued a formal protest letter, objecting to

the Authority's award of the bid to Terminal. Originally, Bock lodged two

objections to the Authority's bid award. On appeal, Bock only contends the

Authority's bid award was improper because Terminal's bid was defective.

According to Bock, Terminal's failure to submit a complete PDF version

of the technical proposal rendered Terminal's bid defective. Terminal's PDF

1
The technical proposal included the identification of subcontractors designated
to perform work on the Project.
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copy of the technical proposal lacked a complete organizational chart and the

required subcontractor forms. However, Terminal provided the required

information in the original and seven hard copies of its technical proposal

submitted to the Authority in paper format.

After considering Bock's protest letters and Terminal's response, the

Authority issued a final agency decision. In a written decision, dated December

5, 2017, the Authority rejected Bock's protest to the bid award. The Authority

concluded the RFP did not identify submission of a complete electronic copy of

the technical proposal as a basis for rejecting a bid. In addition, the Authorit y

noted Terminal submitted the original and seven hard copies of its technical

proposal, containing the required information. The Authority determined, "to

the extent that the electronic copy did not fully match the original hard copy

submission may be a technical defect, it is not a material one . . . . The

[Authority] is within its discretion to waive non-material defects in bid

submissions." It also rejected Bock's contention that Terminal had more time to

submit its technical proposal by not completing the PDF copy. The Authority

found Terminal had no more time for its submission than any other bidders and

thus gained no competitive advantage. On December 7, 2017, the Authority

awarded the $163.5 million contract for the Project to Terminal.

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 Bock appeals, arguing Terminal's bid was materially defective because the

PDF copy of its technical proposal was incomplete.

Our review of an agency action is limited. See In re Taylor, 158 N.J. 644,

656 (1999). Absent a showing that the agency action was "arbitrary, capricious,

and unreasonable," Henry v. Rahway State Prison, 81 N.J. 571, 580 (1980), or a

result of "bad faith, corruption, fraud, or gross abuse of discretion ," we will

affirm the agency's decision. In re Jasper Seating Co., Inc., 406 N.J. Super.

213, 222 (App. Div. 2009) (quoting Commercial Cleaning Corp. v. Sullivan, 47

N.J. 539, 548 (1966)).

The agency action under review in this case is the award of a public bid.

The primary goal of the public bidding statutes is to "guard against favoritism,

improvidence, extravagance, and corruption . . . ." Barrick v. State, 218 N.J.

247, 258 (2014) (quoting Keyes Martin & Co. v. Dir., Div. of Purchas & Prop.,

99 N.J. 244, 256 (1985)). Public bidding laws are designed "to secure for the

taxpayers the benefits of competition and to promote the honesty and integrity

of the bidders and the system . . . ." In re Protest of Award of On-Line Games

Prod. and Operation Servs. Contract, Bid No. 95-X-20175, 279 N.J. Super. 566,

589 (App. Div. 1995).

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 Bidding contracts "must be awarded not simply to the lowest bidder," but

to the bidder whose proposal is deemed to be the most advantageous,

considering "price and other factors . . . ." Meadowbrook Carting Co. v.

Borough of Island Heights & Consol. Waste Servs., Inc., 138 N.J. 307, 313

(1994); N.J.S.A. 52:18A-243(c). An agency may not make an award to a bidder

"whose proposal deviates materially" from the bid specifications or

requirements. Barrick, 218 N.J. at 259. Our Supreme Court has held

"[r]equiring adherence to material specifications maintains a level playing field

for all bidders competing for a public contract. Thus, requirements that are

material to an RFP are non-waivable; the winning bidder's proposal must comply

with all material specifications." Ibid. On the other hand, an agency may waive

provisions as immaterial where the agency is provided with the required

information. See Palamar Constr., Inc. v. Pennsauken Twp., 196 N.J. Super.

241, 256 (App. Div. 1983) (holding failure to provide a bidder qualification

document was a waivable defect).

In reviewing whether a bid requirement is material and cannot be waived,

the Supreme Court established a two-part test. The test requires the following

determinations:

[F]irst whether the effect of a waiver would be to
deprive the [agency] of its assurance that the contract

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 will be entered into, performed and guaranteed
according to its specified requirements and second,
whether [the deviation] 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.

[On-Line Games, 279 N.J. Super. at 594-95 (quoting
Twp. of River Vale v. Longo Constr. Co., 127 N.J.
Super. 207, 216 (Law Div. 1974)).]

We are satisfied Terminal's failure to submit a complete PDF copy of the

technical proposal was not a material deviation because Terminal's hard copy

submissions identified the subcontractors and provided a full organizational

chart. The Authority's decision to waive the defect in Terminal's submission did

not deprive the agency of its assurance that the contract would be performed

because Terminal's hard copy documents provided all of the required

information to the Authority.

Nor did the Authority's waiver give Terminal an unfair competitive

advantage over other bidders. The Authority found Terminal was not given

additional time to negotiate with subcontractors. To the contrary, the Authority

determined "all bidders were given exactly the same amount of time to complete

and submit [the] bid documents."

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 The Authority rejected Bock's claim that by omitting information in the

PDF copy of the technical proposal, Terminal was able to negotiate with

subcontractors until the "last possible moment," thereby gaining a competitive

advantage over other bidders. According to Bock, completion of a PDF copy of

the technical proposal required Bock "to stop negotiating, select its

subcontractors, fill out its original bid documents, then create the PDF [c]opy of

all the documents, including those naming its subcontractors, and finally timely

deliver both its original bid documents and the PDF [c]opy . . . ." According to

Bock, the "need for the PDF [c]opy froze Bock's . . . negotiation process earlier

than would occur in normal circumstances . . . ." Bock contends that because

Terminal did not produce a complete PDF copy with its hard copy bid

submission, Terminal had a "literal time advantage" over all other bidders.

Bock's argument that Terminal was able to "slip" information into its bid

proposal at the last minute is unsupported by the record. Terminal's hard copy

proposal included the names of subcontractors in typed format, evidencing that

Terminal completed and printed the hard copy documents prior to submitting all

documents to the Authority and therefore nothing was added at the last moment.

Although Terminal's bid failed to include a complete PDF copy, the

Authority did not err in waiving that defect because it was immaterial. As our

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Supreme Court has recognized, "minor or inconsequential discrepancies and

technical omissions can be the subject of waiver." Meadowbrook, 138 N.J. at

314.

Nor did Terminal's failure to submit a complete electronic PDF copy of

its bid afford a "post-bid advantage by subverting the review efforts of potential

challengers." Bock and the other bidders were permitted to inspect Terminal's

hard copy bid submission at the Authority's office. Bock clearly inspected both

the hard copy and the PDF copy of Terminal's bid based on Bock's protest letter.

Based on our review of the record, we are satisfied the Authority's

decision to award the bid to Terminal was not arbitrary, capricious, or

unreasonable. The Authority had the right to reject bids based on material

deficiencies, as well as the power to waive technical, immaterial deficiencies.

The Authority properly determined the defect in Terminal's submission of its

PDF copy of the bid was immaterial and could be waived because the

information was included in Terminal's hard copy of the bid document. In

addition, the agency had Terminal's assurance regarding its performance

obligations based on the information provided in the hard copy of the bid

proposal, and the lack of the information in the PDF copy of the bid proposal

did not give Terminal an improper competitive advantage over other bidders.

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Affirmed.

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