Jen Electric, Inc. v. County of Essex
| Decision Date | 04 March 2009 |
| Docket Number | A-23 September Term 2008 |
| Citation | 964 A.2d 790,197 NJ. 627 |
| Parties | JEN ELECTRIC, INC., Plaintiff-Appellant, v. COUNTY OF ESSEX, Defendant-Respondent. |
| Court | New Jersey Supreme Court |
Suzanne M. Cerra argued the cause for appellant (Nukk-Freeman & Cerra, Short Hills, attorneys; Ms. Cerra, Robin H. Rome and Kristine V. Ryan, on the briefs).
Mitchell W. Taraschi, Roseland, argued the cause for respondent (Connell Foley, attorneys; Mr. Taraschi and Mark L. Fleder, of counsel).
This appeal arises in the context of a bid specification challenge, a subset of public contracting. The primary issue presented is whether the provisions of the 2000 amendment to N.J.S.A. 40A:11-13(e) limit the standing of those who wish to challenge a bid specification in a public contract, or whether those provisions represent a limitations period within which such a challenge by an identified party — a "prospective bidder" — must perfect that challenge. The trial court determined that N.J.S.A. 40A:11-13(e) sets forth the standing requirements for those who wish to challenge a bid specification in a public contract, and that only "prospective bidders" are allowed to advance such a challenge. Importing concepts relevant to contract award challenges, the Appellate
Division held that only bidders, prospective bidders and taxpayers could challenge a bid specification.
In light of the unique nature of public contracting and the traditional role the common law has retained in determining standing to contest governmental action, we arrive at a different result. We conclude that the 2000 amendment to N.J.S.A. 40A:11-13(e) is intended as a statute of limitations, requiring, in its plain language, that "[a]ny prospective bidder who wishes to challenge a bid specification shall file such challenges in writing with the contracting agent no less than three business days prior to the opening of the bids[,]" on pain that "[c]hallenges filed after that time shall be considered void and having no impact on the contracting unit or the award of a contract." We therefore find nothing in the 2000 amendment to N.J.S.A. 40A:11-13(e) that limits, restricts or otherwise substitutes for traditional notions of standing in this context. Applying those traditional notions of standing, we further conclude that, in the circumstances presented, the plaintiff in this action had standing to challenge the bid specifications issued by the governmental contracting entity.
During 2007, defendant the County of Essex, through its Department of Public Works, planned certain infrastructure improvements along Central Avenue in Newark costing a total of approximately six million dollars. A significant part of these improvements consisted of the purchase and installation of new or replacement traffic signal and video detection systems that would establish a closed-loop operating system with central control monitoring; those systems were to be installed at ten separate locations on Central Avenue. As a result, in October 2007, the County issued specifications and bid documents in respect of the proposed traffic signal operations and roadway improvements on Central Avenue. However, by a letter dated October 23, 2007, plaintiff Jen Electric, Inc., a registered public works contractor that supplies, installs and maintains the "Peek Traffic Control"
system manufactured by Quixote Corporation, objected to those specifications, claiming that the traffic control equipment listed in the specifications identified a specific manufacturer —Econolite— to the exclusion of the manufacturer plaintiff represented, and were distributed exclusively by a single vendor—Signal Control Products—other than plaintiff. Plaintiff, therefore, requested that the County amend the specifications to allow for bids that included equal but alternate traffic control systems.
In response, the County issued addenda to the specifications which allowed for bids using equal, alternate products in lieu of the brands specifically listed in the specifications. The first addendum issued by the County required that any proposed equal, alternate products be pre-qualified, a requirement that also drew a sharp objection from plaintiff. In response, the County issued a revised addendum, removing the requirement of pre-qualification for equal, alternative products. In the main, however, those efforts were for naught: the County ultimately rejected all of the bids received.1
In December 2007, the County issued revised specifications and re-bid the project, with bids due by no later than January 10, 2008. In respect of the availability of equal, alternate products, the revised specifications were more restrictive than the original, modified specifications: while the original specifications listed specific manufacturers for the controllers and video detection equipment — a limitation lifted by the addenda later issued by the County — the revised specifications added the ITS cabinet enclosures, the battery backup systems, the signal mounting hardware, and the central control software to the list of portions of the project that could be satisfied solely by a single source, that is the
manufacturers identified in the specifications proper. Needless to say, these restrictions also drew a pointed objection from plaintiff. By a letter dated December 21, 2007, plaintiff advised the County's purchasing agent that plaintiff's
initial objection to the form and content of the [project] specifications remains unchanged, in that all of the items specified are for a specific manufacturer (Econolite), with no approved equal provision. There is only one vendor in the State authorized to supply the necessary traffic signal equipment to the successful low bid Contractor. As a supplier of a competing brand that can meet or exceed the specific brand listed, we feel this unfair practice is in direct violation of the public bid process.
Therefore, we once again respectfully request that the bid be postponed until the specifications can be reviewed and amended.
The County responded promptly. By a letter dated December 24, 2007, just three days later, the County noted that it "ALWAYS accepts an equivalent to any brand name stated in an advertised bid specification[,]" noting that any "equivalent must meet or exceed the specification of the brand stated in the bid and it is the responsibility of the bidder to prove that the equivalent meets or exceeds specification." The County cautioned plaintiff that, for those reasons, "this bid specification need[] not ... be amended and the bid opening date will not be postponed." Consistent with that explanation, the County issued the following formal confirming clarification dated December 26, 2007, two days later:
1. The bid specification should read Econolite or equal (equivalent) in all sections of the specification. As stated in the [bidding documents] and [N.J.S.A.] 40A:11-13(d), [t]he County ALWAYS accepts equivalents to any brand name specified in a bid specification, however the equivalent must meet or exceed the bid specification and the bidder must prove that the equivalent meets or exceeds specification.
That clarification triggered an immediate, lengthy objection from plaintiff. By a letter dated December 27, 2007, plaintiff stated its position clearly: "it is apparent that [the bid specifications] have been rewritten in a manner that clearly favors a particular sole source vendor to supply all of the traffic signal equipment (Econolite) namely, Signal Control Products, in spite of the fact that generic specifications exist." Plaintiff asserted that
"this re-bid, as in the case of the original bid, is in clear violation of Local Public Contracts Bidding Laws." After listing the several respects in which plaintiff contended the specifications were deficient, plaintiff noted at length as follows:
Numerous past attempts by [plaintiff] and other vendors to provide equivalent brands to Econolite for the County's projects have been repeatedly rejected. This in spite of the fact that the equivalent brands have been approved and accepted for use by the Federal Highway Administration, NJDOT [the New Jersey Department of Transportation] and CalTrans [the California Department of Transportation] and have been used successfully on countless Municipal, State and Federal projects in the State. However, we have been told point blank by the County's engineering staff that they will not accept any products other than Econolite's and to "not make any waves." This stance has been taken in spite of the fact that open and competitive bidding results in lower equipment pricing that benefits the County, since it is spending less public funds on its projects, thereby saving taxpayer dollars. This fact has been presented to the County in the past. Yet, the County's intent on wanting to use a sole source vendor cannot be misconstrued, nor can the specter of impropriety be ignored.
It can be demonstrated that on other public agency projects where a generic specification is provided, equipment pricing for traffic signals given by suppliers to Contractors is significantly lower than pricing given to Essex County for the same equipment. Yet, the County directed its design consultant to specify only Econolite products for this project, which is clearly not in the best interest of the public. The reason for this direction remains unclear.
To further illustrate the fact that Essex County is overpaying for its traffic signal equipment, consider that the total traffic signal equipment package cost given to Contractors from us and another competing supplier was approximately [six hundred fifty thousand dollars] lower than Signal Control Product's. However, we were told by the bidders that they used Signal Control Product's pricing despite the...
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