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In its ruling, the panel said the contract that the Bergen County Board of Freeholders awarded to Brookside Towing should be nullified by a Superior Court judge in Hackensack who must now hold a new trial.
The county clearly specified that the winning bidder for the 2009-2010 contract had to “establish [the] intent and ability to acquire the necessary equipment, and be in possession of same, by no later than ten (10) business days prior to the award of this contract.”
Brookside promised to buy two new vehicles. Because it didn’t already have them when bids were submitted, the company had to post a performance bond. That didn’t happen.
Instead, Brookside bought two “older used vehicles at significantly less expense” after the bids were opened, the appeals court wrote. Such “post-bid manipulations are repugnant to our public bidding laws,” the judges said, quoting a ruling in a different case.
“[B]idders and the public entities that solicit bids are bound by the express terms of the bid proposal,” they added. “Settled principles of public bidding dictate that no material element of a bid may be provided after bids are opened.”
County officials erred in a decision “to overlook Brookside’s failure to post a performance bond as required by the specifications at the time it tendered its bid,” the appeals judges wrote. “Without any performance bond in place, the County had no assurance that Brookside had, or would have, the equipment necessary….”
The panel also said the county should have disqualified Brookside for not submitting a business registration certificate in its own name. The company used “Bergen Brookside Towing Corp.” instead. It also was supposed to cite the names and addresses of all stockholders who own 10%, under state law.
“[T]here is nothing in the bid submission or the record that reflects who are the shareholders of Bergen Brookside Towing Corp. Nor is there any explanation in the record as to why Brookside did not submit a business registration certificate in its own name,” the judges noted.
Citing state law, the panel wrote that the contract “must be awarded not 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.”
This keeps waivers from becoming “a vehicle for corruption or favoritism,” the judges added.
“[A]fter the bids were opened and Brookside’s bid and Hackensack’s were obviously numerically equal, and before [the lieutenant] conducted his investigation, Brookside purchased older, used vehicles to comply with the specifications’ minimum equipment standards,” they wrote.
As a result of this and other defects, the lower court judge’s dismissal of Hackensack Auto Body’s challenge “must be reversed,” and “the award of the contract to Brookside must be set aside,” the judges ruled.
They also agreed that the contract should not be rebid as a result. Rather, they said, Hackensack Auto Body should get the contract because it submitted the only other bid, one that met all the necessary specifications.
“Permitting the re-bid ‘could cause [the] plaintiff, although winning the battle, to lose the war’,” the panel wrote, citing case law.
The judges left that decision to “the sound discretion of the trial judge” in Hackensack following a hearing on Hackensack Auto Body’s demand that it receive the contract – but made their wishes crystal-clear.
Both companies agreed in their bids to give the county $25 per towed vehicle. On Oct. 7, 2009, the County’s Board of Chosen Freeholders awarded the contract to Brookside. The resolution the freeholders adopted acknowledges the price match but says the award could be made “in the discretion of the contracting unit.” The freeholders cited a bid evaluation by county police that found Brookside “more closely [met] compliance with specifications.”
The county lieutenant who conducted the evaluation acknowledged that Brookside bought two used vehicles instead of the required new ones after the bids were opened, but that he’d inspected both and found them “in good working order,” the opinion says.
He cited previous complaints about Hackensack Auto Body, and claimed that an audit of Hackensack’s towing receipts “revealed a very substantial number of omissions [of] key information.”
The county auditor then contended that any of Brookside’s shortcomings in its bid “can be waived as immaterial, inconsequential variances or irregularities.” Brookside’s “use [of] slightly different names for the company … constitute[d] a minor irregularity that can be waived,” and its failure to submit vehicle specifications was “an inconsequential variance that [could] be waived,” he wrote.
What’s more, the auditor wrote, Brookside’s failure to post a performance bond “was not a material defect” because it had actually acquired the “necessary vehicles.” He took it a step further, certifying a “positive relationship” between the county and Brookside.
Brookside’s contract ran from Oct. 7 to Sept. 1, 2010, with two “12-month options” thereafter. The first option was taken; it’s unclear whether the second was, as well.
A judge in Hackensack dismissed Hackensack Auto Body’s claim against both the county and Brookside after Brookside requested “summary judgment.” A second judge pretty much supported the first ruling. The firm then appealed to the higher court.
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