Section 23.2 of the Local Public Contracts Law list five mandatory requirements that must be submitted at the time of the bid or the bid is deemed fatally defective and unresponsive. N.J.S.A. 40A:11-23.2:
- A bid bond;
- A certificate from a surety;
- A statement of corporate ownership pursuant ;
- A listing of subcontractors; and
- An acknowledge the bidder’s receipt of any notice or revisions or addenda to the advertisement or bid documents
If a bidding contractor fails to submit one of these five items its bid “is deemed a fatal defect that shall render the bid proposal unresponsive and cannot be cured by the governing body.” Star of the Sea Concrete Corp., v. Lucas Bros. Inc. 850 A.2d 559 (N.J.Super. App. Div. 2004). Section N.J.S.A. 40A:11–23.2 “circumscribed the authority of local contracting agencies to waive bid defects by designating five kinds of defects that cannot be waived under any circumstances.” Id. at 563. Indeed, it is “is purely prohibitory; it requires rejection of any bid that does not include all of the mandatory items set forth.” P & A Const., Inc. v. Twp. of Woodbridge, 365 N.J. Super. 164, 176, 838 A.2d 520, 528 (App. Div. 2004).
A common mistake is a contractor failure to list the names of its subcontractors that will perform electrical, plumbing, and structural steel work. This runs afoul of New Jersey’s Anti-Bid Shopping Act, N.J.S.A. 40A:11-16. “The requirement that a bidder submit a list of subcontractors with each bid prevents a general contractor from negotiating or renegotiating with subcontractors after it is awarded the contract. If a bidder were able to substitute unlisted subcontractors, he could wait until after being awarded the bid and negotiate for a lower price, the savings from which would accrue to him and not to the public.” Applied Landscape Techs., Inc. v. Borough of Florham Park, 2013 WL 2371704, at *1 (N.J. Super. Ct. App. Div. June 3, 2013)
The Appellate Division’s decision in Hall Const. Co. v. New Jersey Sports & Exposition Auth., 295 N.J. Super. 629, 685 A.2d 983 (App. Div. 1996), provides further guidance on the importance of strictly and precisely following the instructions contained in bid documents. In that case, the Appellate Division upheld a trial court grant of injunctive relief to a second low bidder on a state construction project, where the apparent low bidder failed to fully complete a bid form. There, the New Jersey Sports & Exposition Authority (“Sports Authority”) solicited bids for the construction of luxury suites at Giants Stadium. Id. at 631. The instructions to bidders required the bidders to list a lump sum price for the work and the price for three alternates. Id. Alternate 1 was for landscaping on the north side of the stadium. Id. Alternate 2 was for lighting protection. Alternate 3 was for signage. Id. The Sports Authority received for bids. Id. At the time the Sports Authority received the four bids it had decided it would not pursue the work required under Alternate 1. Id. at 632.
The apparent low bidder left the space next to Alternate 1, where it was to include its price for Alternate 1, blank. Id. It included a price in the blanks next to Alternate 2 and Alternate 3. Id. The second low bidder filed a protest arguing that the low bidders bid should be rejected because it failed to include a price for Alternate 1 in violation of the instructions to bidders. Id. The low bidder argued that the failure to include a price for Alternate 1 was immaterial because the Sports Authority had already decided that the Alternate 1 work would not be performed. Id. at 635. The trial court rejected this argument and the Appellate Division affirmed holding “failure to insert a figure for Alternate 1 rendered its bid incomplete. Id. at 639. As the Court explained “all bids must comply with the terms imposed.” Id. at 635.
When a apparently low bidder submit a bid that omits one of these five required items a second (or third) low bidder can obtain an injunction prohibiting the award of the contract to the apparent low bidder. Advance Elec. Co. v. Montgomery Twp. Bd. of Educ., 351 N.J. Super. 160, 167, 797 A.2d 216, 220 (App. Div. 2002).