Prismatic Development Corp. v. Somerset County Bd. of Chosen Freeholders

• Decision Date: 27 September 1989
• Citation: 564 A.2d 1208,236 N.J.Super. 158
• Parties: PRISMATIC DEVELOPMENT CORP., Plaintiff-Appellant, v. SOMERSET COUNTY BOARD OF CHOSEN FREEHOLDERS and Turner Construction Company, Inc., Defendants-Respondents.
• Court: New Jersey Superior Court — Appellate Division

Page 158

236 N.J.Super. 158

564 A.2d 1208

PRISMATIC DEVELOPMENT CORP., Plaintiff-Appellant, v. SOMERSET COUNTY BOARD OF CHOSEN FREEHOLDERS and Turner Construction Company, Inc., Defendants-Respondents.

Superior Court of New Jersey Appellate Division.

Argued Sept. 19, 1989.

Decided Sept. 27, 1989.

Harry L. Garman, for appellant (Garman & Amdur, attorneys; Harry L. Garman and Sanford Amdur, East Rutherford, on the brief).

William E. Ozzard, for respondent Somerset County Bd. of Chosen Freeholders (Ozzard, Wharton, Rizzolo, Klein, Mauro, Savo & Hogan, attorneys; William E. Ozzard and Arthur D. Fialk, Somerville, on the brief).

Bruce D. Meller, for respondent Turner Const. Co., Inc. (Peckar & Abramson, attorneys; Bruce D. Meller and Caroline M. Rossi, River Edge, on the brief).

Before Judges BILDER, ASHBEY and ARNOLD M. STEIN.

The opinion of the court was delivered by

BILDER, J.A.D.

This case involves a public contract for the construction of a new county administration building in Somerville. As in Carney v. Trenton, 235 N.J.Super. 372, 562 A.2d 807 (App.Div.1988), the project is governed by the Local Public Contracts Law, N.J.S.A. 40A:11-1 et seq. The question presented is whether a prospective prime contractor for a single overall contract may name alternative specialty subcontractors when bidding pursuant to N.J.S.A. 40A:11-16. An examination of the statute and its legislative history convinces us it cannot.

I.

A little background is helpful to an understanding of the problem with which we are dealing. Under the statute, contracts for the erection of a public building involving more than about $7500 ¹ must be publicly bid. These contracts ordinarily involve the performance of a number of different types of construction as, for example, electrical or plumbing or structural work. In recognition of this fact, the statute provides for the preparation of separate plans and specifications for various components of the finished project. N.J.S.A. 40A:11-16. And similar recognition of varied aspects of the work is accorded by the form in which these projects are carried out. They may be undertaken by a single prime contractor who bids the entire project (a single overall contract) or a group of contractors who separately bid a specialized branch of the work. Ibid. ²

In the instant case defendant Turner Construction Company, Inc. was the low bidder for a single overall contract for the construction of Somerset County's new administration building. ³ Its bid was $11,950,000. Plaintiff Prismatic Development Corp. submitted a competing bid of $12,475,000, making it the next lowest bidder. Plaintiff brought an action in lieu of prerogative writ to restrain an award to Turner, contending that its bid was fatally defective in that it failed to include a "consent of surety" to the required bid bond and lacked an affidavit of non-collusion, and that it listed multiple prime subcontractors in violation of N.J.S.A. 40A:11-16. In this latter regard, Prismatic made clear it was not the use of multiple subcontractors which gave rise to its objection, but that Turner was not committed to any of them and was free to negotiate arrangements with some or any of those named after the opening of the bids--that the bid listed subcontractors some of whom Turner would not use. Following briefing and oral argument, on August 25, 1989 the trial judge dismissed the complaint, finding the deficiencies did not exist but if they did, they were waiveable and/or nonmaterial and that the submission of alternative subcontractors was statutorily permissible and, moreover, approved by our Carney decision. On appeal plaintiff again contends Turner's bid failed to include a consent of surety and that this was a material non-waiveable deficiency. It also claims error in the trial judge's conclusion that Turner could list multiple subcontractors for the same branch of work, some of whom might not be used. ⁴ It seeks an award of the contract to itself as the lowest responsible bidder. We accelerated the appeal and entered a consent order staying the execution of a construction agreement pending our decision.

N.J.S.A. 40A:11-16, in pertinent part, provides:

In the preparation of plans and specifications for the erection, alteration or repair of any public building by any contracting unit, when the entire cost of the work will exceed the amount set forth in, or the amount calculated by the Governor pursuant to, section 3 of P.L. 1971, c.198 (C.40A:11-3), the architect, engineer or other person preparing the plans and specifications may prepare separate plans and specifications for

(1) The plumbing and gas fitting and all kindred work;

(2) Steam power plants, steam and hot water heating and ventilating apparatus and all kindred work;

(3) Electrical work;

(4) Structural steel and ornamental iron work; and

(5) All other work required for the completion of the project.

The contracting unit or its contracting agent shall advertise for and receive, in the manner provided by law, either (a) separate bids for each of the said branches of work, or (b) bids for all the work and materials required to complete the building to be included in a single overall contract, or (c) both. There will be set forth in the bid the name or names of ... all subcontractors to whom the bidder will subcontract the furnishing of plumbing and gas fitting and all kindred work, and of the steam and hot water heating and ventilating apparatus, steam power plants and kindred work, and electrical work, structural steel and ornamental iron work, each of which subcontractors shall be qualified in accordance with this act. The contracting unit shall require evidence of performance security to be submitted simultaneously with the list of the subcontractors. Evidence of performance security may be supplied by the bidder on behalf of himself and any or all subcontractors, or by each respective subcontractor, or by any combination thereof which results in evidence of performance security equalling, but in no event exceeding, the total amount bid. ( N.J.S.A. 40A:11-16)

II.

On this appeal we are required to revisit the problem we considered in Carney, but in a slightly different context. In that case, as we understand it, the contracting unit's bid request contained a number of alternative proposals, all of which were to be provided for in the bids. The prime contractor, in a single overall contract bid, named more than one subcontractor for the same trade but was really required to do so because the selection of the subcontractor depended upon what the contracting unit ultimately decided to do. ⁵ For example, multiple subcontractors were named for plumbing and HVAC (heating, ventilation and air-conditioning) because one who would perform the bulk of the work did not work on fuel tanks. Id. 235 N.J.Super. at 376, 562 A.2d 807. The electrical work was to be divided between one subcontractor who would do fuel tank work and another who would do the remainder. Ibid. In the instant case, the prime contractor, defendant Turner Construction Company, Inc. has named multiple subcontractors within the same trades but intends to use less than all of them. The decision will be made after the bids are opened; Turner will apparently make its deal with the subcontractors after that time. Plaintiff, the unsuccessful bidder, contends this violates N.J.S.A. 40A:11-16 and is illegal. Whether this is so is a matter of statutory interpretation.

In interpreting this statute our inquiry must focus on the legislative intent. See State v. Scioscia, 200 N.J.Super. 28, 38, 490 A.2d 327 (App.Div.1985), certif. den. 101 N.J. 277, 501 A.2d 942 (1985); City of Newark v. County of Essex, 160 N.J.Super. 105, 113, 388 A.2d 1311 (App.Div.1978), aff'd 80 N.J. 143, 402 A.2d 916 (1979). Ordinarily legislative history is sparse. See Marotta v. Burgio, 185 N.J.Super. 172, 175-176, 447 A.2d 937 (Law Div.1982). In this case, unusually, the legislative history has spread before us in some detail the intended meaning of the provision we are called upon to consider.

From the date of its original enactment in 1971, the provision requiring that the names of subcontractors be set forth in the bid read much the same as it does now. It originally provided, "There will be set forth in the bid the name or names of, and evidence of performance security from, all subcontractors to whom the bidder will subcontract the furnishing of [the component work], each of which subcontractors shall be qualified in accordance with this act." See Historical Note to N.J.S.A. 40A:11-16. In 1987 the legislature passed Senate Bill No. 1029 which, among other things, amended N.J.S.A. 40A:11-16 to allow a contracting unit to have bidders submit the names of subcontractors after the opening of the bids but prior to the awarding of contracts. This bill as originally passed provided:

The contracting unit may require that the bid set forth the name or names of all subcontractors to whom the bidder will subcontract the furnishing of plumbing and gas fitting, and all kindred work, and of the steam and hot water heating and ventilating apparatus, steam power plants and kindred work, and electrical work, structural steel and ornamental iron work, each of which subcontractors shall be qualified in accordance with this act. In the alternative, the contracting unit may require that the name or names of such subcontractors be submitted by any or all bidders after the opening of bids but prior to the award of the contract. (Emphasis added.)

This amendment would have specifically permitted the procedure Turner employed in its bid. The...