My company bid on a municipal construction project recently. Our proposal contained all of the items listed on the solicitation checklist. However, the bid was awarded to a lower bidder who did not submit a "certified financial statement," one of the items on the checklist, with its proposal. When we objected to the award, the municipality said that the bid solicitation stated only that the omission of this statement "may" be a cause for rejection, and that therefore it was a defect that could be waived.
I have heard that, while prior to 1999 the absence of this item in the bid proposal would have been a "material defect" requiring the bid to be rejected, an amendment to the Local Public Contracts Law that year may have changed things.
What is the law currently on this subject ?
A Recent case law has indicated that the 1999 change in the law must be viewed in the context of the philosophy of the Local Public Contracts Law, which seeks to protect the public and public monies by providing for unfettered competition for public contracts. The law was amended to further protect the public by making bidding requirements stricter, not more lenient.
The 1999 provision, N.J.S.A. 40A:11-16, states that: "When required by the bid plans and specifications, the following requirements shall be considered mandatory items...the failure to submit any (of them) shall be deemed a fatal defect...that cannot be cured by the governing body." The section then goes on to set forth a list of such requirements. A certified financial statement is not among them.
However, in P&A Construction Inc. v. Township of Woodbridge, 365 N.J. Super. 164 (App. Div.2004), the Court made it clear that the 1999 amendment was not meant to change existing law mandating the rejection of bid proposals with material defects. Thus, in this case, the Court found the absence of a certified financial statement contained on a checklist of items to be submitted with a bid proposal was a material defect requiring rejection, just as it would have under the law prior to 1999.
The Appellate Division confirmed this view in Star of the Sea Concrete Corp. v. Lucas Brothers, Inc., 370 N.J. Super 60 (App. Div. 2004), when the defendant claimed that a list of subcontractors was a fatal defect only in a bid to construct a building, and therefore did not require rejection of their bid proposal. In ruling against them, the Court advised that bidders should assume all requirements of a solicitation are material, and that the 1999 amendments "were not crafted to alter this basic guidance."
Q A person who works in our municipal recreation program as a member of the maintenance staff was convicted recently of the disorderly persons offense of
"loitering for the purposes of obtaining a controlled dangerous substance," a disorderly persons offense. The municipality would like to apply to the court to force him to forfeit his job, under the "Forfeiture of Public Office" statute, because frankly we are concerned about having him around children and teenagers even in a maintenance capacity. Can we do this even though the matter has been disposed of in the Court, and the prosecutor and judge did not deal with the forfeiture issue in convicting and sentencing him?
A As long as the prosecutor did not apply for, and the Court did not grant, a waiver of such forfeiture at the time of disposition, you may seek such forfeiture now. N.J.S.A. 2C:51-2 provides that, while conviction of a disorderly persons offense does not automatically require forfeiture of public employment, if the offense is one "...involving or touching such public...employment" (N.J.S.A. 2C-51-2 (a) (2) ), forfeiture will be required. Furthermore, in the case of State v. Och, Docket No. A-5285-02T5 (App.Div.2004), the court held that unless a waiver of forfeiture has been formally applied for and granted at sentencing, the issue may be raised subsequently by either the prosecutor or the employer, who may apply to the Court to order forfeiture of employment. The decision as to whether the offense in question touches upon the public office and thus requires forfeiture is one that must be made by the judiciary .
This column is for informational purposes only, and is not intended as legal advice.