Arco Sanzari Appeal

8/8/2019 Arco Sanzari Appeal

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NOT FOR PUBLICATION WITHOUT THEAPPROVAL OF THE APPELLATE DIVISION

SUPERIOR COURT OF NEW JERSEYAPPELLATE DIVISION

DOCKET NO. A-1649-10T21

A-1650-10T2A-1804-10T2

VANAS CONSTRUCTION CO., INC.,

Plaintiff-Respondent,

v.

CITY OF JERSEY CITY and ARCOELECTRICAL CONTRACTORS, INC.,

t/d/b/a ARCO CONSTRUCTIONGROUP,

Defendants-Appellants.____________________________________

JOGI CONSTRUCTION, INC.,

Plaintiff-Respondent,

v.

CITY OF JERSEY CITY and JOSEPHM. SANZARI, INC.,

Defendants-Appellants._____________________________________

Argued December 15, 2010 - Decided

Before Judges Sapp-Peterson and Fasciale.

On appeal from the Superior Court of NewJersey, Law Division, Hudson County, Docket

1 Under A-1649-10T2, the City of Jersey City is appealing theorder entered under L-4553-10, Jogi Construction being therespondent, as well as the order entered under L-5049-10, VanasConstruction Co., Inc. being the respondent.

December 23, 2010


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Nos. L-4553-10 (A-1804-10T2) and L-5049-10(A-1650-10T2).

Raymond Reddington, Supervisory AssistantCorporation Counsel, argued the cause for

appellant City of Jersey City under A-1649-10T2 (William Matsikoudis, CorporationCounsel, attorney; Mr. Reddington, ofcounsel and on the brief).

Thomas S. Cosma argued the cause forappellant Joseph M. Sanzari, Inc. under A-1804-10T2 (Connell Foley, L.L.P., attorneys;Mr. Cosma, of counsel and on the brief).

Joseph J. Hocking argued the cause for

appellant Arco Electrical Contractors, Inc.,t/d/b/a Arco Construction Group under A-1650-10T2 (Schenck, Price, Smith & King,L.L.P., attorneys; Mr. Hocking, on thebrief).

Henry N. Christensen, Jr. (Norton &Christensen, P.A.) argued the cause forrespondent Jogi Construction, Inc. under A-1804-10T2.

Aldo DiTrolio argued the cause forrespondent Vanas Construction Co., Inc.under A-1650-10T2 (Gaccione, Pomaco &Malanga, P.C., attorneys; Mr. DiTrolio, ofcounsel and on the brief).

PER CURIAM

In these three accelerated appeals that have been

consolidated, appellants Joseph M. Sanzari, Inc. (Sanzari), Arco

Electical Contractors, Inc., t/d/b/a Arco Construction Group

(Arco), and the City of Jersey City (the City), appeal from

trial court orders entering judgment in favor of respondent Jogi

Construction, Inc. (Jogi) and partial judgment in favor of Vanas


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Construction Co., Inc. (Vanas). The trial court found that bid

proposals submitted by Sanzari for the Newark Avenue Roadway

Improvement Project, Federal Project No. FS-7851(102) and Jersey

City Project No. 09-006 (Newark Avenue Project), and by Arco for

the West District Police Precinct, Project No. 2007-002 (West

District Precinct Project), were materially defective and that

the defects were non-waivable. The court permanently enjoined

and restrained the City from implementing and effectuating the

respective contracts as to Sanzari and Arco. We affirm.

I.

Jersey City advertised for bids in connection with the two

projects in the spring of 2010. The bid specifications required

that prospective bidders complete and submit numerous documents.

Two such documents were the "Certificate of Experience" of the

general contractor and the "Plant and Equipment Questionnaire"

(Questionnaire) to be completed by the general contractor.

Additionally, the bid specifications required the separate

submission of a Certificate of Experience and Questionnaire to

be completed by each subcontractor required to be named pursuant

to N.J.S.A. 40A:11-16.2

2 We have reproduced the exact language of the Certificate ofExperience and Questionnaire contained in the two bid proposals.The Certificate of Experience and Questionnaire are attached asAppendices A and B, respectively.


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It is undisputed that when the City opened bids for the

Newark Avenue Project on May 6, 2010, Sanzari's bid was the

lowest at $3,169,067.80, followed by Jogi at $3,348,789.94, and

English Paving Company, Inc., at $3,399,133.73. However,

Sanzari's bid proposal did not include a completed Certificate

of Experience and Questionnaire for Kevco Electric Company

(Kevco), listed as Sanzari's electrical engineer in the bid

proposal. The City notified Sanzari of the deficiency, and

either on May 6 or May 7, Sanzari provided the omitted

documents. Similarly, when the City opened the bids for the

West District Precinct Project on August 5, 2010, Arco's bid of

$9,653,153 was the lowest, followed by Vanas at $9,750,000, and

Onekey, LLC at $9,790,000. Arco also failed to include in its

package completed Certificates of Experience and Questionnaires

for K & D Contractors, LLC, its proposed plumbing and HVAC

subcontractor; and Erection & Welding Contractors, its proposed

structural steel and ornamental iron subcontractor. The City

advised Arco that it could submit the requisite documents within

twenty-four hours.

A. The Jogi Bid Protest

Jogi filed a bid protest for the Newark Avenue Project on

May 7, the day following bid openings. Jogi contended the

Sanzari bid proposal was non-responsive and thereby null and


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void. In a letter dated May 14, Jersey City notified Sanzari

that "[p]ursuant to the terms and conditions of the City's bid

specifications, the City must reject Sanzari's bid." The letter

stated further:

The Certificates of Experience for thesubcontractor named in the proposal pursuantto N.J.S.A. 40A:11-16 was discussed in twodifferent sections of the bid specification.Section 8 entitled "Bid Documents" on pageI-6 of the Information to Bidders advisedbidders that Certificates of Experience forsubcontractors required by law to be listed

in the proposal were to be submitted withthe proposal. It advised that a failure todo so would result in rejection of the bid.The Schedule of Required Submittals byBidder on page SRS-1 advised that a failureto include the Certificates would result inrejection of the bid.

. . . ([C]ontracting authorities maynot waive any material or substantialvariation between the conditions under which

the bids are invited and the proposalsubmitted). The Certificates of Experiencefor subcontractors that were required by lawto be listed in the bid proposal werereferenced in two different sections of thebid specifications. Bidders were clearlyadvised that the Certificates were mandatorydocuments that were to be submitted with theproposal. The City will proceed to evaluatethe bid proposal of Jogi Construction, Inc.to determine if it is the lowest responsible

bidder.

In correspondence dated May 20, Sanzari's attorney stated

that the bid proposal was not materially defective and that the

City was "legally bound under the Local Public Contracts Law to


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award the contract to Sanzari as the lowest responsible bidder."

He first argued as a threshold matter that N.J.S.A. 40A:11-16(b)

did not apply because Kevco was the only electrical

subcontractor named in the proposal and, therefore, Sanzari was

only required to list the "names of the trade subcontractors

required to be listed by N.J.S.A. 40A:11-16." Second, he argued

that Kevco "is well-known to the City from other City public

projects in which Kevco has performed or is performing

electrical work." Third, he challenged the two provisions

contained in the bid proposals cited by the City in its May 14

correspondence:

Neither Section 8 nor the Schedule statethat the general contractor (i.e., thebidder) must provide a separate Certificateof Experience for its subcontractors, bethey listed or unlisted subcontractors.

Indeed, the Certificate of Experience itselfdoes not state that it must be completed bythe listed subcontractors. Rather, itstates at pg. P-32 as follows: "IMPORTANT:THIS CERTIFICATION MUST BE FILLED IN BYBIDDER." (Emphasis in original).

Sanzari's next argument acknowledged that the Questionnaire

expressly required the general contractor to provide duplicate

copies of the proposal to its proposed subcontractors and

required the subcontractors to complete the duplicate documents,

but noted that this provision was "found a[t] the bottom of the

second page of the Plant and Equipment Questionnaire, which is


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of course a different document that asks for information

particular to plant and equipment." Finally, he argued that the

City ignored "the equally important provisions of Section 29

['SUBMISSION OF POST BID INFORMATION'] of the Information to

Bidders[,]" that contemplated "the possibility of post-bid

submissions specifically addressed to the responsibility of the

proposed subcontractors."

Subsequent to its receipt of the correspondence from

Sanzari's attorney, the City, in a letter dated May 27, 2010,

notified Sanzari that after reviewing Tec Electric, Inc. v.

Franklin Lakes Board of Education, 284 N.J. Super. 480 (Law Div.

1995), it reconsidered its rejection of Sanzari's bid proposal

and concluded that "despite what the specifications stated, . .

. . Sanzari's failure to include the Certificate [of Experience

for Kevco] was a minor defect which could be and was cured[,]"

and that under the Tec Electric, Inc. decision, it was required

to permit "Sanzari to cure the defect."

B. The Vanas Bid Protest

On August 9, five days after bid opening, Vanas formally

objected to the award of the contract to Arco. It first took

"exception to the leniency the City has allowed Arco with

respect to issuing this documentation within 24 hours as all of

this documentation was to be 'submitted with the bid' as


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indicated in multiple locations in the bid form." Vanas next

maintained that Arco's non-compliance "prevented the City from

determining that legitimate, experienced subcontractors were

being used." It additionally argued:

Furthermore, if the bid of Arco wassubstantially less tha[n] the second bid,they could adopt a position that their biddid not comply with the requirements of thebid form and therefore withdraw their bid

without penalty and without being bound bythe Bid Bond to the City of Jersey City[,]thereby giving them an advantage over every

other bidder who submitted bids inaccordance with the Contract Documents.Clearly, the intent of the Bid Form was thatall the required documentation be submitted

with the bid. The bid of Arco did notcomply with this requirement.

In response, the City acknowledged that the failure to

include the Certificate of Experience and Questionnaire

documents for each of Arco's subcontractors was "clearly a bid

defect." Specifically, the City concluded:

First, the submission of documents usedto determine the responsibility of a bidderdid not deprive the City of its assurancethat the contract would be entered into,performed and guaranteed according to thespecified requirements. Arco submitted abid bond and consent of surety and would

have suffered severe financial consequencesif it had refused to provide the documentsto the City. Second, allowing Arco to curethe defect did not give it a competitiveadvantage over the other bidders. Themissing documents pertained to theexperience and qualification ofsubcontractors. The document did not and


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could not influence the amount of the Arco[]bid or of any of the other bidders. See[]Tec Elec[.], Inc. v. Franklin Lakes Bd. ofEduc[.], 284 N.J. Super. 480, 487 (Law Div.1995).

In a resolution adopted on July 14, 2010, City Council

awarded the Newark Avenue Project to Sanzari. In a resolution

dated September 15, 2010, City Council awarded the West District

Precinct Project to Arco. Jogi and Vanas, as the second lowest

bidders on the respective contracts, filed verified complaints

in lieu of prerogative writ seeking to set aside the action of

the City. Jogi argued that the contract award to Sanzari was

arbitrary, unreasonable, capricious, illegal, and in derogation

of public policy. Vanas' complaint raised similar allegations

but additionally alleged that "[a]ssuming a post-bid cure was

even permissible, Arco's post-bid submissions still did not

substantially meet the requirements of the bid invitation."

C. The Prerogative Writ Actions

The trial court conducted oral argument on the Sanzari/Jogi

matter on September 28 and on the Arco/Vanas matter on October

7. The court reserved decision after each of the arguments and

issued a written opinion on October 15, granting judgment in

favor of Jogi and partial judgment in favor of Vanas. In

reaching its decision, the court first considered the purposes

for the Certificate of Experience and Questionnaire. To answer


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essentially provided with nothing more thanthe names and addresses of thesubcontractors that would be responsible forperforming portions of the work requiredunder the contract. At the time of bid

reception, the City therefore had noinformation regarding prior work performedby each subcontractor, the manner in whicheach subcontractor had inspected theproposed work, each subcontractor's plan forperforming the proposed work, the supervisorresponsible for overseeing eachsubcontractor, full information as to eachsubcontractor's other private or governmentcontracts, each subcontractor's availableequipment, or the status of each

subcontractor's contracts for materials.

The court concluded that the action of the City in awarding the

two contracts to the two lowest bidders violated N.J.S.A.

40A:11-23.2.

The court also considered the impact of the awards under

the two-part test first enunciated by Judge Pressler in Township

of River Vale v. R.J. Longo Construction Co., Inc., 127 N.J.

Super. 207, 216 (Law. Div. 1974) and adopted by the Supreme

Court in Meadowbrook Carting Co., Inc. v. Borough of Island

Heights, 138 N.J. 307, 313 (1994):

[F]irst, whether the effect of a waiverwould be to deprive the municipality of its

assurance that the contract will be enteredinto, performed and guaranteed according toits specified requirements, and second,

whether it is of such a nature that its waiver would adversely affect competitivebidding by placing a bidder in a position ofadvantage over other bidders or by otherwise


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undermining the necessary common standard ofcompetition.

[River Vale, supra, 127 N.J. Super. at 216.]

The court noted the Court's recognition in Meadowbrook that

notwithstanding the existence of the River Vale test, decisions

applying the two-part test "have been somewhat inconsistent in

articulating the difference between a material defect in a bid

that cannot be waived and an immaterial defect that can be

waived." Meadowbrook, supra, 138 N.J. 319.

Against this analytical framework, the court rejected the

argument advanced that bid bonds were in place to prevent

Sanzari and Arco from walking away from the contracts once the

bids were opened and they were deemed non-compliant because the

bid bonds for each project would only entitle the City to

$20,000 in each case if the bidders walked away and the projects

were valued in excess of $3 million and $9 million respectively.

Consequently, the court concluded "[t]he non[-]compliance by

both [d]efendants precluded such commitment because the omission

of Certificates effectively left nullification in the hands of

the bidders." Based upon these findings, the court was

satisfied that Jersey City, in both instances was "deprived of

adequate assurance that [the] contracts would be entered into

with the non[-]compliant [d]efendants."

Addressing the second prong, the court stated:


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[B]oth [d]efendants were afforded an unfairbidding advantage insofar as they were notrequired to submit the subcontractordocumentation in their initial bidsubmissions. Whether or not the burden of

doing so is considered to be laborious, therequirement of obtaining Certificates andsupporting documents from all subcontractorsmust surely lessen the pool of subcontractorcandidates from which a bidding contractorcan choose in preparing the final bidsubmission. I therefore find itindisputable that a general contractor whois not required to obtain these documentsprior to bid submission is placed in aposition of advantage over its competitors.

Moreover, in order to achieve the"common standard of competition" called forby the LPCL,3 the conditions andspecifications of the bidding process "mustapply equally to all prospective bidders."Hillside [v. Sternin], 25 N.J. [317,] 322[(1957)]. Were it otherwise, and werecourts to freely permit individual biddersto follow or disregard bid specifications attheir leisure, "the mandate for equality

among bidders would be illusory and theadvantages of competition would be lost."Id. at 323. The unambiguous languageincluded in the packet submitted to biddersby the City is not, and cannot, be disputedby the parties; all bidders were put onnotice that failure to include the necessaryCertificates and Questionnaires would resultin "automatic rejection . . . at the time of[b]id reception." In conformity with itsrejection of a bid by A.J.M. Contractors

just months earlier on the same grounds, theCity initially enforced the clear languageof its bid specifications by rejectingDefendant Sanzari's bid proposal for failureto include the Kevco Certificate in its

3 Local Public Contracts Law, N.J.S.A. 40A:11-1 to -51.


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initial bid submission. The City thereafterreversed course and permitted both[d]efendants the opportunity to cure thevery same type of defect that had caused therejection of the A.J.M. bid. I conclude

that a "common standard of competition"cannot exist when the rules of the game arechanged at the very moment that they arebroken.

Subsequent to the court's rulings, the City awarded the

contracts to Jogi and Vanas. The court thereafter entered an

order staying its October 15 orders. Sanzari and Arco filed

applications with this court seeking permission to file an

emergent motion on short notice to continue the stay pending

appeal. We denied the application by order dated November 18,

2010, and on appeal to the Supreme Court, our order was

reversed. By order dated November 24, we granted the emergent

application, extended the trial court's stay pending appeal,

issued an accelerated briefing schedule and consolidated the two

appeals for purposes of joint disposition. The City filed a

separate appeal on December 1, 2010, which has been consolidated

with the Sanzari and Arco appeals.

On appeal, Sanzari contends:

POINT ITHE CITY ACTED WITHIN ITS PERMISSIBLEDISCRETION WHEN IT PERMITTED SANZARI TO CUREAN IMMATERIAL AND WAIVABLE DEFECT IN FAILINGTO INCLUDE THE CERTIFICATE OF EXPERIENCE.

A. THE CONFLICTING BID INSTRUCTIONS DIDNOT EXPRESSLY REQUIRE THE CERTIFICATE


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OR QUESTIONNAIRE FOR SUBCONTRACTORS BESUBMITTED AT THE TIME OF BIDDING.

B. EVEN IF A CERTIFICATE AND QUESTIONNAIREFOR KEVCO WERE REQUIRED AT THE TIME OF

BIDDING, THEIR INADVERTENT OMISSION DIDNOT CONSTITUTE A MATERIAL DEFECT.

C. THE LACK OF MATERIALITY OF THE LATESUBMISSION OF THE DOCUMENTS IS FURTHEREVIDENCED BY . . . SANZARI'S COMPLETECOMPLIANCE WITH THE LPCL.

POINT IIIT IS IN THE BEST INTEREST OF THE PUBLICTHAT THE CONTRACT BE AWARDED TO SANZARI.

In its appeal, Arco contends:

POINT IARCO'S FAILURE TO SUBMIT THE REQUIREDSUBCONTRACTOR DOCUMENTATION WITH ITS BID DIDNOT VIOLATE THE FIRST PRONG OFRIVERVALE/MEADOWBROOK MATERIALITY ANALYSISBECAUSE IT DID NOT DEPRIVE JERSEY CITY OFANY ASSURANCE THAT THE CONTRACT WOULD BEENTERED INTO AND PERFORMED BY ARCO ACCORDING

TO ITS SPECIFIED TERMS.

POINT IIJERSEY CITY'S AWARD OF THE CONTRACT TO ARCODID NOT VIOLATE THE SECOND PRONG OFRIVERVALE/MEADOWBROOK MATERIALITY ANALYSISBECAUSE ARCO GAVE NO COMPETITIVE ADVANTAGEOVER VANAS OR ANY OTHER COMPLIANT BIDDER.

POINT IIIVANAS' DISCUSSION OF OTHER ALLEGED

DEFICIENCIES IN ARCO'S POST-BID SUBMISSIONSIS INAPPROPRIATE AND SHOULD NOT BECONSIDERED BY THIS COURT.

The City, in its appeal, contends:

POINT I


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THE FAILURE OF SANZARI AND ARCO TO INCLUDEWITH THEIR BID PROPOSALS CERTIFICATES OFEXPERIENCE AND PLANT AND EQUIPMENTQUESTIONNAIRES FOR SUBCONTRACTORS NAMEDPURSUANT TO N.J.S.A. 40A:11-16 WERE CURABLE

BID DEFECTS.

POINT IISANZARI AND ARCO WERE NOT AFFORDED AN UNFAIRBIDDING ADVANTAGE BECAUSE THEY WERE LEGALLYBOUND TO PERFORM THE CONTRACTS WITH THESUBCONTRACTORS NAMED IN THEIR BID PROPOSALS.

POINT IIITHE LAW PERMITS THE CITY TO ALLOW A LOWBIDDER TO CURE MINOR BID DEFECTS.

POINT IVTHERE WAS A COMMON STANDARD OF COMPETITIONFOR ALL BIDDERS WHO SUBMITTED PROPOSALS FORPROJECTS I AND II.

II.

In our review of the City's determination that the omission

of the Certificates of Experience and Questionnaires in the bid

proposals submitted by Sanzari and Arco were minor defects that

were curable and waivable, we apply the same standard of review

employed by the trial court, namely, whether the decision was

arbitrary, unreasonable or capricious. Palamar Constr., Inc. v.

Twp. of Pennsauken, 196 N.J. Super. 241, 250 (App. Div. 1983).

We approach this matter mindful that ordinarily it is not our

task to substitute our judgment for that of the municipality,

particularly where municipal action calls for the exercise of

discretion. Colonnelli Bros., Inc. v. Vill. of Ridgefield Park,


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284 N.J. Super. 538, 541 (App. Div. 1995), certif. denied, 143

N.J. 327 (1996). Nonetheless, in the context of awarding public

contracts, we are also mindful that we have construed local

public contracts law "to curtail the discretion of local

authorities by demanding strict compliance with public bidding

guidelines." L. Pucillo & Sons, Inc. v. Mayor and Council of

Borough of New Milford, 73 N.J. 349, 356 (1977).

Close scrutiny of municipal action in the award of public

contracts furthers the objective underlying all public bidding

laws, namely, "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, 279 N.J. Super. 566,

589 (App. Div. 1995). Public "[b]idding statutes are for the

benefit of the taxpayers and are construed as nearly as possible

with sole reference to the public good." Terminal Constr. Corp.

v. Atl. County Sewerage Auth., 67 N.J. 403, 409-10 (1975).

The court observed more than fifty years ago in Hillside,

supra, "[i]n this field it is better to leave the door tightly

closed than to permit it to be ajar, thus necessitating

forevermore in such cases speculation as to whether or not it

was purposely left that way." 25 N.J. at 326. Consequently, a

municipality must ensure that its bidding process is not used or


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perceived as being used in such a way as to favor one bidder

over another or to allow for corruption. Terminal Constr.,

supra, 67 N.J. at 410. In doing so, a municipality furthers the

objectives of our public contract laws, which is not to promote

the individual interests of the bidders, but to promote the

public interest by "inviting competition in which all bidders

are placed on an equal basis[.]" River Vale, supra, 127 N.J.

Super. at 215. See also 426 Bloomfield Ave. Corp. v. City of

Newark, 262 N.J. Super. 384, 387 (App. Div. 1993).

Here, there is no dispute that the City identified the

submission of these documents as mandatory and that the

consequence for the failure to submit the documents was

automatic rejection. It is also undisputed that the documents

were not included in the bid proposals as required. If the

omitted documents are statutorily mandated, then unquestionably

the failure to submit the documents with the bid proposal is

non-waivable. N.J.S.A. 40A:11-23.1; see also P & A Constr.,

Inc. v. Twp. of Woodbridge, 365 N.J. Super. 164, 177 (App. Div.

2004). On the other hand, if not statutorily 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. Ibid.


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A.

The trial judge found that the omission of the Certificates

of Experience and Questionnaire for the subcontractors rendered

Sanzari's and Arco's bids "defectively unresponsive and non-

curable" and the City's decision to permit Sanzari and Arco to

cure the defect violated N.J.S.A. 40A:11-23.2.

N.J.S.A. 40A:11-23.2 states in relevant part:

When required by the bid plans andspecifications, the following requirements

shall be considered mandatory items to besubmitted at the time specified by thecontracting unit for the receipt of thebids; the failure to submit any one of themandatory items shall be deemed a fataldefect that shall render the bid proposalunresponsive and that cannot be cured by thegoverning body:

. . . .

d. A listing of subcontractors pursuant tosection 16 of P.L.1971, c.198 (C.40A:11-16)[.]

N.J.S.A. 40A:11-16 requires that in the case of a single

bid contract, as in the Sanzari and Arco bids, the bids must

contain:

the name or names of all subcontractors to

whom the bidder will subcontract thefurnishing of plumbing and gas fitting, andall kindred work, and of the steam and hot

water heating and ventilating apparatus,steam power plants and kindred work, andelectrical work, structural steel andornamental iron work, each of whichsubcontractors shall be qualified in


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accordance with P.L.1971, c.198 (C.40A:11-1et seq.)

[(emphasis added).]

While the bid proposals contained the names of the

subcontractors, there was nothing provided that demonstrated the

subcontractors' qualifications in "accordance with P.L.1971,

c.198 (C.40A:11-1 et seq.)" Ibid. We construe the reference to

"40A:11-1 et seq." to simply mean that the subcontractor must

meet the test for qualifications under the LPCL, whatever those

particular qualifications may be. A review of the LPCL does not

set forth any particular requirement for subcontractors other

than their listing under Section 11-16. Thus, we do not agree

that the failure to provide the Certificate and Questionnaire

for the subcontractors violated N.J.S.A. 40A:11-23.2 as the

trial court found. That, however, does not end the discussion.

As we have previously had occasion to state:

[T]he 1999 amendments to the [LPCL] do notcontain any legislative directive concerningthe waiver of other bid defects. We do notbelieve that this legislative silence can bereasonably construed as an affirmativeauthorization for local contracting agenciesto waive any bid defect that is not

expressly set forth in N.J.S.A. 40A:11-23.2.Instead, we conclude that N.J.S.A. 40A:11-23.2 should be construed as a legislativedirective that a bidder's failure to submitany of the five mandatory items set forththerein shall automatically be considered anon[-]waivable defect, but any other bid


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defect shall continue to be considered underthe River Vale criteria of materiality.

[P & A Constr., supra, 365 N.J. Super. at177.]

Because the trial court did not base its decision solely

upon its finding that the City violated N.J.S.A. 40A:11-23.2,

but instead also considered the River Vale criteria of

materiality, any error in reaching the conclusion that the City

violated N.J.S.A. 40A:11-23.2 was harmless. R. 2:10-2.

B.

In applying the River Vale factors, we must first determine

whether the City's decision to waive its requirement that

bidders submit the Certificates of Experience and Questionnaires

at the time the bid proposals were submitted "deprive[d] the

[the City] of its assurance that the contract [would] be entered

into, performed and guaranteed according to its specified

requirements." River Vale, supra, 127 N.J. Super. at 216. As

to Sanzari, in reversing its earlier rejection of the bids as

non-conforming "with the bidding instructions," in its May 27,

2010 letter, the City simply stated that "despite what the

specifications stated, this was a minor bid defect." The letter

provided no explanation why the defect was deemed minor.

Rather, it merely referenced the River Vale factors and then, in

a conclusory manner, stated "[b]ased on this test," the omission


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of the documents "was a minor defect which could be and was

cured."

As to Arco, the City offered three reasons why it

considered the defect to be minor: (1) Arco submitted a bid

bond and consent surety and would have suffered severe financial

consequences if it had refused to provide the documents to the

City; (2) the "missing documents pertained to the experience and

qualification of subcontractors"; and (3) the "document did not

and could not influence the amount of . . . Arco's bid or of any

of the other bidders." Financial security to perform is only

one factor that evidences the bidders ability to perform the

contract in accordance with the plans and bid specifications.

The City used the Certificate of Experience and Questionaire to

consider other factors, including "availability of facilities

necessary to perform the contract[.]" The absence of these

documents at the time the bids were received provided no

assurances of the "availability of facilities necessary to

perform the contract[.]" The City had no information whatsoever

in this regard. As the trial court stated:

In the absence of these Certificates andother required documentation in both cases,the City was essentially provided withnothing more than the names and addresses ofthe subcontractors that would be responsiblefor performing portions of the work requiredunder the contract. At the time of bidreception, the City therefore had no


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information regarding prior work performedby each subcontractor, the manner in whicheach subcontractor had inspected theproposed work, each subcontractor's plan forperforming the proposed work, the supervisor

responsible for overseeing eachsubcontractor, full information as to eachsubcontractor's other private or governmentcontracts, each subcontractor's availableequipment, or the status of eachsubcontractor's contracts for materials.

We note that although not mandated statutorily for

subcontractors, N.J.S.A. 40A:11-20 provides:

There may be required from any biddersubmitting a bid on public work to anycontracting unit, duly advertised for inaccordance with law, a certificate showingthat he owns, leases, or controls all thenecessary equipment required by the plans,specifications and advertisements under

which bids are asked for and if the bidderis not the actual owner or lessee of anysuch equipment, his certificate shall statethe source from which the equipment will be

obtained, and shall be accompanied by acertificate from the owner or person incontrol of the equipment definitely grantingto the bidder the control of the equipmentrequired during such time as may benecessary for the completion of that portionof the contract for which it is necessary.

The inclusion of this provision in the LPCL is clear evidence of

the substantive materiality of the Questionnaire here because it

calls for the bidder to provide most of the information set

forth under Section 11-20.

The City exercised its discretion to not only require the

general contractor to complete the Questionnaire but also


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required each subcontractor listed by the bidder to also

complete the Questionnaire. As we stated in P & A Construction,

Inc., supra, 365 N.J. Super. at 173, where the issue was the

omission of a certified financial statement, which was a

mandatory requirement in the bid specification but later deemed

waivable by the municipality because it was not statutorily

mandated:

The essential reason for requiring a bidderto submit a certified financial statement

with its bid, as with the requirement that abidder show that it owns, leases or controls whatever equipment is necessary to performthe contract . . . is to provide assuranceto the contracting agency that the bidder

will be able to complete performance if itis awarded the contract.

[Ibid. (emphasis added).]

We agree, as appellants argued, that not every item

designated as mandatory in a bid proposal means that the item is

material and therefore non-waivable. Here, however, the record

does not support such a finding. If, for example, the

Certificate of Experience or Questionnaire contains responses

that facially reflect questionable plans, supervision,

availability of the necessary equipment, "this would provide a

proper basis for the contracting agency to reject the bid on the

ground that the bidder's ability to complete performance could

be jeopardized by a lack of" sufficient human and equipment


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would be lost." Id. at 323. Theunambiguous language included in the packetsubmitted to bidders by the City is not, andcannot, be disputed by the parties; allbidders were put on notice that failure to

include the necessary Certificates andQuestionnaires would result in "automaticrejection . . . at the time of Bidreception." In conformity with itsrejection of a bid by A.J.M. Contractorsjust months earlier on the same grounds, theCity initially enforced the clear languageof its bid specifications by rejectingDefendant Sanzari's bid proposal for failureto include the Kevco Certificate in itsinitial bid submission. The City thereafter

reversed course and permitted both[d]efendants the opportunity to cure thevery same type of defect that had caused therejection of the A.J.M. bid. I concludethat a "common standard of competition"cannot exist when the rules of the game arechanged at the very moment that they arebroken.

There is no contention here that the actions of Sanzari or

Arco were other than as represented, inadvertent. Nor is there

any evidence that the City's actions in waiving the defects were

undertaken for any reason other than advancing the public

interest. At oral argument, the City explained that the

inclusion of the Certificate of Experience and Questionnaire as

mandatory in the bid proposals and for which automatic rejection

would result in the event of non-compliance, was a "mistake."

We initially note that this was not an explanation offered to

any of the bidders at the time of the bid protests. Nor was

this argument advanced before the trial court. Hence, there is


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no support for this contention in the record and we decline to

consider it here. Star of Sea Concrete Corp. v. Lucas Brothers,

Inc., 370 N.J. Super. 60, 72 (App. Div. 2004) (citing Nieder v.

Royal Indem. Ins. Co., 62 N.J. 229, 234 (1973)).

Moreover, by urging that we view what it clearly denoted in

the bid proposal as mandatory and grounds for automatic

rejection as a minor defect that was waivable and curable, the

City "would be free to reject a low bidder for such an omission"

as the trial court observed had occurred months earlier with

the A.J.M. bid. Pucillo, supra, 73 N.J. at 355. Yet, the City

"could accept a non-conforming bid [such as the Sanzari and Arco

bids,] when it was 'in the best interest of [the City].'" Id.

at 356. In essence, the City has:

transform[ed] the mandatory requirement in

[its] specifications into a polite request.The ordinary reader of the specifications would regard them as calling for[compliance] on all the terms specified.Awarding the contract to one who failed to[comply] on all terms necessary created aninequity in the bidding and an opportunityfor favoritism.

[Ibid.]

The savings to the taxpayers by waiving the defects and

awarding the two contracts to Sanzari and Arco are not

insignificant. However, savings to the taxpayers, standing

alone, is insufficient to justify waiver of a material


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requirement in the bid specifications. Meadowbrook, supra, 138

N.J. at 325. "Contracts are not to be awarded 'simply to the

lowest bidder, but rather to the lowest bidder that complies

with the substantive and procedural requirements in the bid

advertisements and specifications.'" Star of the Sea, supra,

370 N.J. Super. at 73 (quoting Meadowbrook, supra, 138 N.J. at

313). N.J.S.A. 40A:11-2(27) defines "lowest responsible bidder"

as "the bidder or vendor: (a) whose response to a request for

bids offers the lowest price and is responsive; and (b) who is

responsible. (emphasis added). "While the public may

occasionally be harmed by failure to waive a bid requirement,

'the overriding interest in insuring the integrity of the

bidding process is more important than the isolated savings at

stake.'" Star of the Sea, supra, 370 N.J. Super. at 73

(quoting Meadowbrook, supra, 138 N.J. at 313).

We disagree with the argument advanced by appellants that

because the post-bid submissions call for further submissions,

upon request from the engineer or architect, this is further

support for their contention that the omissions were minor

defects. This language, contained in the Information to

Bidders, is permissive and does not call for the submission of

documentation addressing the responsibility of the proposed

subcontractors unless it is requested. We therefore do not view


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this provision as diminishing the materiality of the

Certificates of Experience and Questionnaires, whose

significance here was evidenced by (1) the mandatory nature of

the documents as expressly noted in the bid proposals; (2)

notice provided to the bidders in the proposal that the

consequences for non-compliance is automatic rejection; and (3)

the City's clear and unequivocal statement of its purpose for

requesting the documents. We note further that in both bid

proposals, these two documents were located sequentially with

each other, rather than separated by numerous other pages

between the two documents.

Finally, in their briefs and during oral argument, Sanzari

and Arco placed considerable reliance upon Palamar Construction,

Inc., supra, and the Law Division decision in Tec Electric Inc.,

supra, to support their position that the omissions here were

minor defects that were curable. We agree with Jogi and Vanas

that these cases are factually distinguishable. Neither case

addressed a bid specification that was delineated as mandatory

and included other evidence in the record demonstrating the

substantive materiality of the omitted documents. Further, if a

defect is material and non-waivable, the timing of the cure, in

our view, becomes irrelevant.


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The remaining arguments advanced by appellants are without

sufficient merit to warrant discussion in a written opinion. R.

2:11-3(e)(1)(E).

Affirmed.


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APPENDIX A

1. CERTIFICATE OF EXPERIENCE:

The Bidder must supply a document which will

indicate his experience in performing therequired work under this Project. Thisdocument shall be attached to this Proposaland along with this Certificate, shall besigned by Bidder.

The information to be included on thisdocument shall consist of at least thefollowing:

(1) Name of Owner

(2) Amount of Contract

(3) Type of Work

(4) Name of Owner's Engineer inCharge of Work

(5) Address of Owner's Engineer,Street and Municipality

(6) Approximate Dates

_______________________hereby certifies that________________ has performed the following work as described on the attached sheetwithin the past three (3) years.

________________________Name of Bidder

Witness By______________________

________________________Title

________________________Date


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APPENDIX A - CONTINUED

IMPORTANT: THIS CERTIFICATION MUST BE FILLEDIN BY BIDDER.


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APPENDIX B

2. PLANT AND EQUIPMENT QUESTIONNAIRE

Submitted to City of Jersey City

By________________________________

____ a Corporation

____ a Partnership

____ an Individual

With Principal Office at __________________.

The signatory of this questionnaireguarantees the truth and accuracy of allstatements and of all answers tointerrogatories hereinafter made.

a. In what matter have you inspected theproposed work? Explain in detail.

_______________________________________

_______________________________________

_______________________________________

_______________________________________

b. Explain your plan and schedule forperforming the proposed work.

_______________________________________

_______________________________________

c. The work, if awarded to you, will havethe personal supervision of whom?

_______________________________________

_______________________________________


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APPENDIX B - CONTINUED

d. Do you intend to do the paving on theproposed work with your own forces?

______ If so, give type of equipment to

be used.

_______________________________________

_______________________________________

_______________________________________

e. Do you intend to sublet any portions ofthe work?_____________ If so, it ismandatory pursuant to N.J.S.A. 40A:11-

16 that you list the names of thosesubcontractors under each disciplinebelow[.] [F]ailure to do so willautomatically result in rejection ofthe bid.

Trade Name of Subcontractor Address

Plumbing & _____________________ _______Gas Fitting _______and all kindred

[W]ork

Steam and ______________________ _______Hot Water _______Heating andVentilatingApparatus,and all kindredWork

Electric ______________________ _______

Work _______

Structural _______________________ _______Steel & _______Ornamental Iron _______

Each subcontractor listed above shall fillout and submit a Certificate of Experience


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(as shown in this Bid Proposal) and items a,b, c, f, g, h, i and the remainingaffidavit, duly executed, on the last page

of the "Plant and Equipment Questionnaire".The General Contractor shall supply eachsubcontractor with duplicate pages of thisproposal to be filled out by thesubcontractor and then submitted with thebid proposal.

Whenever a bid sets forth more than onesubcontractor for any of the specialty tradecategories listed above, the bidder shallsubmit to the contracting unit a certificate

signed by the bidder listing eachsubcontractor named in the bid for thatcategory. The certificate shall set forththe scope of work for which thesubcontractor has submitted a price quoteand which the bidder has agreed to award toeach subcontractor should the bidder beawarded the contract. The certificate shallbe submitted to the contracting unitsimultaneously with the list of thesubcontractors. The certificate may take

the form of a single certificate listing allsubcontractors or, alternatively, a separatecertificate may be submitted for eachsubcontractor. If a bidder does not submita certificate or certificates to thecontracting unit, the contracting unit shallaward the contract to the next lowestresponsible bidder.

f. Give full information about all of yourcontracts, whether private or

government contracts, whether prime orsub-contracts; whether in progress orawarded but not yet begun; or where youare low bidder pending formal award ofcontract.


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(a) Owner(b) Location(c) Description(d) Adjusted Contract Amount(e) Amount Completed and

Billed(f) Additional Earned Since

Last Estimate(g) Balance to be Completed(h) Estimated Date of

Completion(i) Totals of Items, D, E,F, G and H above

g. What equipment do you own that isavailable for and intended to be usedon the proposed project?


(a) Quantity(b) Type of Equipment(c) Description, Size,

Capacity, etc.(d) Condition(e) Years of Service(f) Present Location

h. What equipment do you intend topurchase or lease for use on the

proposed work, should the Contract beawarded to you?


(a) Quantity


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(b) Type of Equipment(c) Description, Size,

Capacity, etc.

(d) Approximate CostPurchase/Lease

i. Have you made contracts or receivedfirm offers for all materials withinprices used in preparing your Proposal?Do not give name of dealers ormanufacturers.

_______________________________________

_______________________________________

The undersigned hereby declare(s) thatthe items of equipment in [q]uestion gare owned by _________________________,and are available for and are intendedto be used on the Project, if awardedthe Contract, and that he/theypropose(s) to purchase or lease for theProject the additional items ofequipment stated in Question h.

If awarded the Contract, theundersigned will furnish certificatesfrom the owners of leased equipment tothe effect that, in case of default ofContract, as set forth in NJSSSubsection 108.14, the Governing Bodyhas the right to take over the leasedequipment for use in completing the

work.

STATE OF _________________) : ss.COUNTY OF ________________)

I, ___________ of the City of

__________, in the County of __________


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and the State of _____________, of full

age, having been duly sworn according

to law, upon my oath depose and say

that:

I am ______________ of ____________________,Title Name of Organization

and that the answers to the foregoing

questions and all statements therein

contained are true and correct.

Sworn and Subscribed to ___________________the City of Jersey City

before me this _____ dayof __________, 200 .

_________________________

SIGNATURE OF NOTARY PUBLIC(Stamp and Seal)

My commission expires_________

3. FINANCIAL STATEMENT(see no. 3 on page p-3)

ASSETS

Cash on Hand $______

Cash in Bank and Nameof said Bank $______

__________________________________________

Accounts receivable from $______completed contracts


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Real Estate used for business $______purposes

Material in Stock $______

Equipment Book Value $______

Furniture and Fixtures $______

Other Assets $______

TOTAL ASSETS $______

LIABILITIES

Notes payable to Bank $______

Notes payable for Equipment $______obligations

Notes payable for other $______obligations

Accounts payable $______

Other Liabilities $______

TOTAL LIABILITIES $______

5. CORPORATION OR PARTNERSHIP STATEMENT

Chapter 33 of the Public Laws of 1977provides that no corporation or partnershipshall be awarded any State, County,Municipal or School Districts contract forpurposes of any work or the furnishing of

any materials or supplies unless prior tothe receipt of the bid or accompanying thebid of said corporation or partnership thereis submitted a statement. The statementshall set forth the names and addresses ofall stockholders in the corporation orpartnership who own ten percent (10%) of itsstock of any class or of all individual


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partners in the partnership who own a tenpercent (10%) or greater interest therein.

Incorporated:____ Partnership:____ Date:____200____

Legal Name of Bidder:_______________________

Business Address: Street, City, State andZip Code

____________________________________________

____________________________________________

____________________________________________

Telephone: ( )

____________________________________________Listed below are the names and addresses ofall stockholders in the corporation orpartnership who own ten percent (10%) ormore of its stock of any class, or of allindividual partners in the partnership whoown a ten percent (10%) or greater interest

therein.

Name:______________ Address:________________Name:______________ Address:________________Name:______________ Address:________________Name:______________ Address:________________Name:______________ Address:________________Name:______________ Address:________________Name:______________ Address:________________Name:______________ Address:________________Name:______________ Address:________________

Name:______________ Address:________________Name:______________ Address:________________Name:______________ Address:________________

We have no one person who owns ten percent(10%) or more of the corporat[ion] orpartnership.


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Signed:_________________Title:__________________

6. BID GUARANTEE (SEE INFORMATION TOBIDDERS ARTICLE NO. 09)

7. CONSENT OF SURETY (SEE INFORMATION TOBIDDERS ARTICLE NO. 10)

Arco Sanzari Appeal

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