Fereday & Meyer Co. v. Board of Public Works of City of Elizabeth

• Decision Date: 02 June 1958
• Docket Number: No. A--132,A--132
• Citation: 142 A.2d 99,27 N.J. 218
• Parties: FEREDAY & MEYER CO., Inc., a New Jersey corporation, and Samuel Schapiro, a taxpayer of the City of Elizabeth, New Jersey, Plaintiffs-Appellants, v. BOARD OF PUBLIC WORKS OF the CITY OF ELIZABETH, New Jersey, et al., Defendants-Respondents.
• Court: New Jersey Supreme Court

Page 218

27 N.J. 218

142 A.2d 99

FEREDAY & MEYER CO., Inc., a New Jersey corporation, and

Samuel Schapiro, a taxpayer of the City of

Elizabeth, New Jersey, Plaintiffs-Appellants, v. BOARD OF PUBLIC WORKS OF the CITY OF ELIZABETH, New Jersey,

et al., Defendants-Respondents.

No. A--132.

Supreme Court of New Jersey.

Argued May 6, 1958.

Decided June 2, 1958.

John E. Toolan, Perth Amboy, argued the cause for appellants (Toolan, Haney & Romond, Perth Amboy, attorneys).

Raymond A. Leahy, Elizabeth, argued the cause for municipal defendants-respondents.

Samuel A. Larner, Newark, argued the cause for defendants-respondents Peter Roselle and others, t/a Peter Roselle & Sons (Budd, Larner & Kent, Newark, attorneys).

The opinion of the court was delivered by

JACOBS, J.

The plaintiffs appealed to the Appellate Division from the summary judgment which the Law Division had entered in favor of the defendants. We granted certification under R.R. 1:10--1(a).

The plaintiff Fereday & Meyer Co., Inc. was engaged in the scavenger business and since 1939 performed garbage collection services for the City of Elizabeth under a series of contracts. Most of the contracts had been executed pursuant to bids on specifications which required that the contractor maintain dumping grounds within the city or within five miles of the city, and the fact that Fereday's grounds were within the corporate limits of Elizabeth placed it in a favorable bidding position. Throughout the years it was the successful bidder and on two occasions it was the only bidder. Its original three-year contract from 1939 to 1942 provided for aggregate payments of $183,000 for garbage collection in the city, each of its subsequent contracts was at a higher rate, and its last contract from January 1, 1955 to January 1, 1958 provided for aggregate payments of $1,215,000.

In September 1957 the Elizabeth board of public works, which is charged with the responsibility for collecting and removing garbage within the city (R.S. 40:175--23, N.J.S.A.), advertised for bids on specifications which did not require that the contractor maintain dumping grounds within Elizabeth or any specified distance therefrom, although it did contain a customary provision that the contractor would at its own expense furnish dumping grounds on which the city might dump its municipal refuse, trees, street sweepings, debris, garbage, rubbish and other waste matter. Bids were submitted by Fereday, Roselle & Sons, and a third bidder. Roselle's bid was the lowest, but the board of public works, on recommendation of the Elizabeth City Council, rejected all bids as being too high, and advertised for further bids. This time bids were submitted only by Fereday and Roselle and their bids were substantially lower than their earlier bids. Roselle's bid for a three-year term was $1,245,000 whereas Fereday's bid for the same period was the sum of $1,347,000. In addition, the specifications called for a supplemental bid of the amount which would be charged by the contractor for sanitary fill if required under the new regulation known as chapter VIII of the State Sanitary Code, to be effective July 1, 1958; on this item Roselle's charge was $2,333 per month whereas Fereday's charge was $3,333 per month. On December 2, 1957 the board of public works accepted Roselle's bid, and on January 2, 1958 a written three-year garbage collection contract was executed between Roselle and the city in which the city agreed to pay the sum of $1,245,000 in monthly installments and in addition the sum of $2,333 per month if, at any time during the contract, chapter VIII of the State Sanitary Code is put into effect. See L.1958, c. 38.

The plaintiffs filed a complaint in which they attacked the action of the board of public works on various grounds which were rejected by Judge Hetfield in the Law Division. In support of their appeal from the adverse summary judgment the plaintiffs have in this court advanced three points which we find to be without legal merit. Their first point is that 'the Board of Public Works violated the law of the State of New Jersey when it refused to award the garbage contract to Fereday & Meyer Co., Inc., the lowest responsible bidder, R.S. 40:50--1 (N.J.S.A.).' No question is raised as to the responsibility of Roselle nor is there any dispute that on the face of the bids Roselle was the lower bidder by a substantial amount. However, the plaintiffs contend that since Roselle's dumping grounds are located in Kearny, about 7 1/2 miles from Elizabeth, the cost to the city for dumping its own street sweepings and other waste material will exceed what its cost would be if Fereday's dumping grounds within Elizabeth were available, as they would be on acceptance of Fereday's bid. An affidavit by the vice-president of Fereday calculates the cost to the city, on this item over the three-year period, in the sum of $207,251 which he arrives at through the following estimations: It will take a city sanitation truck carrying a driver and two helpers approximately 1 1/2 hours to make a round trip to Kearny; during 1956 the municipal trucks carrier 6,874 loads and if they carry as many loads annually during the contract period 1958 through 1960, the cost will be $176,318; and to this figure the affiant adds an operating cost of ten cents per mile for the trucks, amounting to $30,933 for the three-year period. The affidavit significantly omits all reference to the relative cost of carrying loads in the municipal trucks to Fereday's dumping grounds. And the basic assumptions upon which it rests are highly questionable for there is nothing to indicate that the number of loads, the number of men used, and the operating costs, will be at all comparable to the alleged 1956 experience. Indeed, the city's contract with Roselle simply allows it to use Roselle's dumping grounds, and counsel for the municipal defendants indicated during oral argument that in the interests of further economy the city was considering its own acquisition of local land for the dumping of municipal street sweepings and waste materials. See R.S. 40:60--2, N.J.S.A.

R.S. 40:50--1, N.J.S.A. provides that no municipality shall enter into any contract for the doing of work or the furnishing of materials or labor where the sum exceeds $2,500, without advertising for bids and awarding the contract 'to the lowest responsible bidder.' The statutory requirement of competitive bidding seeks to prevent dishonesty without throttling 'the exercise of an honest judgment within prescribed limits.' Hammonton v. Elvins, 101 N.J.L. 38, 41, 127 A. 241, 242 (Sup.Ct.1925); Rankin v. Board of Education of Egg Harbor Twp., 134 N.J.L. 342, 344, 47 A.2d 892 (Sup.Ct.1946), affirmed 135 N.J.L. 299, 51 A.2d 194 (E. & A.1947). Economy is...