The Supreme Court of New Jersey recently ruled that the New Jersey Division of Property Management and Construction (Division) acted properly when it awarded a contract for the lease of office space to the lowest bidder. The state’s highest court also concluded that the Director of the Division correctly determined that that an advertised requirement that the site location be within one-quarter mile of public transportation could be waived because it was not mandated by statute or regulation.
The Facts of the Case
The legal dispute in Barrick v. New Jersey involved a request for proposals (RFP) seeking bids from property owners in Morris County for the ten-year lease of office space to be used by the Department of Labor (DOL) as a one-stop career center. A detailed scope of work set forth several requirements for the prospective location, including that “[t]he office shall be located within 1/4 mile of a mode of accessible public transportation (bus route or other means).” After no bid submitted by a qualified bidder satisfied the original distance requirement, the Director, in consultation with the DOL, determined it could be waived, given that the requirement was not compelled by law.
After the Director awarded the bid to RMD Properties, LLC (RMD), Matthew J. Barrick, Jr., the second lowest bidder, appealed the Director’s decision, but did not seek a stay of the award . The Appellate Division held that the waiver of the advertised distance requirement was improper and that the monetary difference between RMD’s and Barrick’s bids was insignificant. It subsequently reversed the Director’s award of the lease, and remanded the matter to the Division to award the lease to Barrick or to rebid the project. The Division appealed.
The Court’s Decision
The New Jersey Supreme Court reversed the Appellate Division’s decision. While the panel confirmed that material requirements to an RFP may not be waived, it found that “the Director’s determination that the distance requirement was not material to the RFP was unassailably reasonable and the decision awarding the lease contract to RMD was not arbitrary, capricious, or unreasonable.”
In reaching its decision, the court highlighted that the Director properly determined that the distance-to-public-transportation requirement was not mandated by statute or regulation. Moreover, the court found that the Director’s determination that cost-effectiveness was the factor of paramount importance and his subsequent award to the lowest bidder was entitled to deference.
Because the court ruled in favor of RMD, it declined to address the parties’ arguments for a bright-line rule in favor of mootness when an unsuccessful bidder fails to seek a stay when appealing a bid award. However, Justice LaVecchia warned that litigants who fail to pursue stay applications in bidding disputes do so at their own peril. She wrote: “[w]e caution against any expectation that a merits review will be readily available to such unsuccessful bidders who sit on their right to seek a stay and hope for a remedy down the road.”
For more information about this case or the legal issues involved, we encourage you to contact a member of Scarinci Hollenbeck’s Government Law Group.