Improperly Awarded Public Contract Can Survive Where Bid Process Was Fair and Re-Bid Would Be Inequitable to Public Entity and Taxpayers

Alaska Servs., Inc. v. County of Morris, 2007 WL 2385941 (N.J. Super. Ct. App. Div. Aug. 23, 2007)

In this case, a county solicited bids for laundry services for a county-run nursing care facility pursuant to New Jersey’s Local Public Contracts Law (“LPCL”) (N.J.S.A. 40A:11-1, et seq.).  The county refused to award the contract to the lowest bidder, finding that the bid was “materially non-responsive," and because the services were such that the county could utilize the LPCL’s “competitive contracting” provision (an exception for certain “special” goods and services permitting a public entity to consider additional factors beyond the “lowest responsible bidder” standards set by the LPCL).  The county awarded the contract to another bidder.

Plaintiff, who submitted the lowest bid, appealed from the decision of the trial court awarding summary judgment to the county.  The Appellate Division found that the plaintiff’s bid was materially non-responsive and properly rejected.  As to the county’s decision to utilize competitive contracting, the court determined that the county had failed to obtain the necessary prior approval.  Absent this approval, the court found no provision allowing the use of a competitive contract under these circumstances.

Notwithstanding, the court ruled that the contract may remain in effect until its termination date, since a re-bid would be inequitable and inappropriate at this juncture.  Among other reasons, the court noted that there was no hint of favoritism or corruption in the bid process, and the county would be without laundry services pending any re-bid.

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