JEN ELECTRIC, INC. v. County of Essex
Full Opinion (html_with_citations)
delivered the opinion of the Court.
This appeal arises in the context of a bid specification challenge, a subset of public contracting. The primary issue presented is whether the provisions of the 2000 amendment to N.J.S.A. 40A:11-13 limit the standing of those who wish to challenge a bid specification in a public contract, or whether those provisions represent a limitations period within which such a challenge by an identified party â a âprospective bidderâ â must perfect that challenge. The trial court determined that N.J.S.A. 40A:11-13 sets forth the standing requirements for those who wish to challenge a bid specification in a public contract, and that only âprospective biddersâ are allowed to advance such a challenge. Importing concepts relevant to contract award challenges, the Appellate
In light of the unique nature of public contracting and the traditional role the common law has retained in determining standing to contest governmental action, we arrive at a different result. We conclude that the 2000 amendment to N.J.S.A. 40A:11-13 is intended as a statute of limitations, requiring, in its plain language, that â[a]ny prospective bidder who wishes to challenge a bid specification shall file such challenges in writing with the contracting agent no less than three business days prior to the opening of the bids[,]â on pain that â[c]hallenges filed after that time shall be considered void and having no impact on the contracting unit or the award of a contract.â We therefore find nothing in the 2000 amendment to N.J.S.A. 40A: 11-13 that limits, restricts or otherwise substitutes for traditional notions of standing in this context. Applying those traditional notions of standing, we further conclude that, in the circumstances presented, the plaintiff in this action had standing to challenge the bid specifications issued by the governmental contracting entity.
I.
During 2007, defendant the County of Essex, through its Department of Public Works, planned certain infrastructure improvements along Central Avenue in Newark costing a total of approximately six million dollars. A significant part of these improvements consisted of the purchase and installation of new or replacement traffic signal and video detection systems that would establish a closed-loop operating system with central control monitoring; those systems were to be installed at ten separate locations on Central Avenue. As a result, in October 2007, the County issued specifications and bid documents in respect of the proposed traffic signal operations and roadway improvements on Central Avenue. However, by a letter dated October 23, 2007, plaintiff Jen Electric, Inc., a registered public works contractor that supplies, installs and maintains the âPeek Traffic Controlâ
In response, the County issued addenda to the specifications which allowed for bids using equal, alternate products in lieu of the brands specifically listed in the specifications. The first addendum issued by the County required that any proposed equal, alternate products be pre-qualified, a requirement that also drew a sharp objection from plaintiff. In response, the County issued a revised addendum, removing the requirement of pre-qualification for equal, alternative products. In the main, however, those efforts were for naught: the County ultimately rejected all of the bids received.
In December 2007, the County issued revised specifications and re-bid the project, with bids due by no later than January 10,2008. In respect of the availability of equal, alternate products, the revised specifications were more restrictive than the original, modified specifications: while the original specifications listed specific manufacturers for the controllers and video detection equipment â a limitation lifted by the addenda later issued by the County â the revised specifications added the ITS cabinet enclosures, the battery back-up systems, the signal mounting hardware, and the central control software to the list of portions of the project that could be satisfied solely by a single source, that is the
initial objection to the form and content of the [project] specifications remains unchanged, in that all of the items specified are for a specific manufacturer (Econolite), with no approved equal provision. There is only one vendor in the State authorized to supply the necessary traffic signal equipment to the successful low bid Contractor. As a supplier of a competing brand that can meet or exceed the specific brand listed, we feel this unfair practice is in direct violation of the public bid process.
Therefore, we once again respectfully request that the bid be postponed until the specifications can be reviewed and amended.
The County responded promptly. By a letter dated December 24, 2007, just three days later, the County noted that it âALWAYS accepts an equivalent to any brand name stated in an advertised bid specification^]â noting that any âequivalent must meet or exceed the specification of the brand stated in the bid and it is the responsibility of the bidder to prove that the equivalent meets or exceeds specification.â The County cautioned plaintiff that, for those reasons, âthis bid specification need[ ] not ... be amended and the bid opening date will not be postponed.â Consistent with that explanation, the County issued the following formal confirming clarification dated December 26, 2007, two days later:
CLARIFICATION NO. 1
1. The bid specification should read Econolite or equal (equivalent) in all sections of the specification. As stated in the [bidding documents] and [N.J.S.A] 40A:11-13(d), [t]he County ALWAYS accepts equivalents to any brand name specified in a bid specification, however the equivalent must meet or exceed the bid specification and the bidder must prove that the equivalent meets or exceeds specification.
That clarification triggered an immediate, lengthy objection from plaintiff. By a letter dated December 27, 2007, plaintiff stated its position clearly: âit is apparent that [the bid specifications] have been re-written in a manner that clearly favors a particular sole source vendor to supply all of the traffic signal equipment (Econolite) namely, Signal Control Products, in spite of the fact that generic specifications exist.â Plaintiff asserted that
Numerous past attempts by [plaintiff] and other vendors to provide equivalent brands to Econolite for the Countyâs projects have been repeatedly rejected. This in spite of the fact that the equivalent brands have been approved and accepted for use by the Federal Highway Administration, NJDOT [the New Jersey Department of Transportation] and CalTrans [the California Department of Transportation] and have been used successfully on countless Municipal, State and Federal projects in the State. However, we have been told point blank by the Countyâs engineering staff that they will not accept any products other than Econoliteâs and to ânot make any waves.â This stance has been taken in spite of the fact that open and competitive bidding results in lower equipment pricing that benefits the County, since it is spending less public funds on its projects, thereby saving taxpayer dollars. This fact has been presented to the County in the past. Yet, the Countyâs intent on wanting to use a sole source vendor cannot be misconstrued, nor can the specter of impropriety be ignored.
It can be demonstrated that on other public agency projects where a generic specification is provided, equipment pricing for traffic signals given by suppliers to Contractors is significantly lower than pricing given to Essex County for the same equipment. Yet, the County directed its design consultant to specify only Econol-ite products for this project, which is clearly not in the best interest of the publie. The reason for this direction remains unclear.
To further illustrate the fact that Essex County is overpaying for its traffic signal equipment, consider that the total traffic signal equipment package cost given to Contractors from us and another competing supplier was approximately [six hundred fifty thousand dollars] lower than Signal Control Productâs. However, we were told by the bidders that they used Signal Control Productâs pricing despite the fact that addendums were issued indicating an âor equalâ clause, because their past experience demonstrates that the County has never accepted any product other than Econoliteâs. And to reiterate our point, addendums to provide for an âor equalâ clause would have been unnecessary, if the County had initially followed [the procedure outlined in state governmental procurement regulations] for the form and content of the bid specifications when preparing the project.
Based on the foregoing and the fact that there is approximately [six million two hundred thousand dollars] in funding at stake, we are sure you will agree that the project specifications need to be revised to a generic format in order to provide a fair and open bidding process. Doing so will be in all of the partiesâ best interest and will remove any questions as to whether or not favoritism or impropriety is present. In the event the bid is not postponed, we will have [n]o choice but to seek legal recourse.
The County again replied promptly. By a letter dated January 3, 2008, it noted that â[a]fter careful consideration [it] reaffirm[ed]
On January 8, 2008 â two days before the bids were to be opened and claiming that â[b]ased on the requirements set forth in the Revised Specifications (even as amended by the subsequent Clarification), [Signal Control Products] is the only vendor in the State of New Jersey ... capable of supplying the designated traffic signal equipment and video detection system to the low bid Contractorâ â plaintiff filed its complaint in lieu of prerogative writs against the County. In that complaint, plaintiff attacked the Countyâs bid specifications on two separate fronts. Plaintiff first claimed that the Countyâs use of a brand name â Econoliteâin its specifications without first considering the use of a generic specification violated Section 13(d) of the Local Public Contract Law, N.J.S.A, 40A:ll-13(d), and the relevant implementing regulations,
no specifications under this act may:
(d) Require, with regard to any contract, the furnishing of any âbrand name,â but may in all cases require âbrand name or equivalent,â except that if the goods or services to be provided or performed are proprietary, such goods or services may be purchased by stipulating the proprietary goods or services in the bid specification in any case in which the resolution authorizing the contract so indicates, and the special need for such proprietary goods or services is directly related to the performance, completion or undertaking of the purpose for which the contract is awarded!.]
[N.J.S.A 40A:ll-13(d).]
Similarly, the regulations that implement those statutory provisions require that, â[t]o encourage free, open, and competitive bidding, prior to referencing a âbrand name or equivalentâ in a bid specification ... a contracting agent or purchasing agent shall first consider using a ... generic specification available through a commercial or non-commercial serviee[.]â N.J.A.C. 5:34-9.2(a)(2).
Second, plaintiff asserted that the Countyâs requirement that any equal or equivalent be pre-approved violated the clear injunction that â[ujnder no circumstance shall specifications require any form of âpre-approvalâ or âpre-qualificationâ of an equivalent product before the submission of bids.â N.J.A.C. 5:34-9.2(d). For both reasons, plaintiff requested three forms of substantive injunc-tive relief: an order (1) declaring the bidding specifications null and void; (2) commanding that the County issue an addendum to the bidding specifications that would bring the specifications into compliance with the requirements of the Local Public Contracts Law, N.J.SA 40A:11-1 to -51, and its implementing regulations; and (3) enjoining the award of any contract until the deficiencies in the specifications were corrected.
The next day, the trial court issued an order to show cause and, with the Countyâs consent, temporarily restrained the County
Once the Countyâs answer was filed and expedited discovery was completed, and in order to moot any objections that plaintiff was only a vendor or supplier of equipment and not a âprospective bidderâ under the bid, plaintiff moved to amend its complaint to add Daidone Electric, Inc. â an Essex County-based contractor that pledged to use the traffic signal equipment sold by plaintiff in a bid â as a party plaintiff. Although Daidone Electric presumably had standing to contest the bid specifications both as a prospective bidder and as a taxpayer in Essex County, the trial court denied that motion. It reasoned that, because Daidone Electric had not challenged the bid specifications âin writing with the contracting agent no less than three business days prior to the opening of the bids[,]â as required by N.J.S.A. 40A:ll-13(d), an amendment to add Daidone Electric as a party plaintiff would be futile as its challenge would be untimely.
At the plenary return date on the order to show cause, the trial court determined at the outset that, because plaintiff was never going to be a bidder on the project â its participation would have been limited to supplying the traffic control equipment to a
Both the trial court and the Appellate Division denied plaintiffâs motion for a stay pending appeal. Plaintiff then sought and was granted an emergent stay pending appeal by this Court, first on April 23, 2008 by a single Justice granting the motion for a temporary stay âuntil further order of the Court[,]â and later on May 2, 2008 by the full Court. In the interim, the Appellate Division granted plaintiffs motion for acceleration of the appeal dismissing plaintiffâs complaint.
The Appellate Division, in a published opinion, affirmed the dismissal of plaintiffs complaint for lack of standing. Jen Elec., Inc. v. County of Essex, 401 N.J.Super. 203, 949 A.2d 861 (App.Div.2008). Addressing the standing issue, the panel explained that âonly taxpayers, bidders, and prospective bidders may challenge the award of a contract to the successful bidder.â Id. at 212, 949 A.2d 861 (citations omitted). Conflating challenges to contract awards with earlier-in-time challenges to bid specifications, the Appellate Division noted that âour ease law has established additional prerequisites for challenges to bidding specifications issued
Examining plaintiffâs role in this bidding process, the Appellate Division accurately defined plaintiff as a vendor that proposed to provide equipment to either a bidder or a âprospective bidder.â It reasoned that â[bjecause plaintiff is not a taxpayer in Essex County, did not submit a direct bid on the contract, and never intended to submit a direct bid in response to the specifications, plaintiff does not have standing under our case law to maintain this action.â Id. at 214, 949 A.2d 861. It thus concluded that âan entity that proposes to furnish equipment to a direct bidder on a public contract should not be considered a âbidderâ or âprospective bidderâ under our case law or N.J.S.A. 40A-.11-13. A contrary conclusion would be at variance with the ordinary meaning of the term âbidder.â â Id. at 215, 949 A.2d 861.
We again granted plaintiffs emergent motion for a stay pending appeal to this Court, first on July 3, 2008 by a single Justice pending action by the full Court, and later on July 11, 2008 by the entire Court. We also granted plaintiffs petition for certification and accelerated this appeal âfor argument on the earliest available date in September 2008.â Jen Elec., Inc. v. County of Essex, 196 N.J. 344, 953 A.2d 762 (2008). For the reasons that follow, we reverse the judgment of the Appellate Division, reinstate plaintiffs complaint, and remand the case to the Law Division for further proceedings.
II.
Plaintiff argues that, as a potential supplier of equipment or material to a bidder, it has standing to challenge illegal or
In response, the County urges that the Appellate Division decision be affirmed in all respects. It asserts, in general, that standing to challenge a bid specification is limited only to bidders, prospective bidders and taxpayers, and that plaintiff qualifies as neither.
We address first whether the 2000 amendments to N.J.S.A 40A:11-13 operate to limit who has standing to challenge a bid specification. In light of our conclusion on that question, we then turn to whether plaintiff had standing to challenge the bid specifications at issue here.
III.
A.
In the first instance, our task is to determine the Legislatureâs intent when, in 2000, it amended Section 13 of the Local Public Contracts Law to add the following new paragraph at the end of subsection (e):
Any prospective bidder who wishes to challenge a bid specification shall file such challenges in writing with the contracting agent no less than three business days*641 prior to the opening of the bids. Challenges filed after that time shall be considered void and having no impact on the contracting unit or the award of a contract.
[N.J.S.A. 40A:11-13.]
In that task, we are guided by well-settled standards of statutory construction. As we recently noted, â[generally, under those standards, the intent of the drafters is to be found in the plain language of the enactment[,]â and â[i]f the language is clear, then the interpretative process will end without resort to extrinsic sources.â Bedford v. Riello, 195 N.J. 210, 221-22, 948 A.2d 1272 (2008) (citing DiProspero v. Penn, 183 N.J. 477, 492, 874 A.2d 1039 (2005)). Our resort to outside sources in determining legislative intent is not without limits: âWe look to extrinsic evidence if a plain reading of the enactment leads to more than one plausible interpretation.â Id. at 222, 948 A.2d 1272 (citing DiProspero, supra, 183 N.J. at 492-93, 874 A.2d 1039). Stated differently,
[w]hen interpreting a statute, our overarching duty is to construe and apply the statute as enacted. We do so by applying the following principles. First, a court should not resort to extrinsic interpretative aids when the statutory language is clear and unambiguous, and susceptible to only one interpretation. That said, if there is ambiguity in the statutory language that leads to more than one plausible interpretation, we may turn to extrinsic evidence, including legislative history, committee reports, and contemporaneous construction. We have explained that we may also resort to extrinsic evidence if a plain reading of the statute leads to an absurd result or if the overall statutory scheme is at odds with the plain language. We are guided by first principles: our analysis begins with the plain language of the statute.
[In re Liquidation of Integrity Ins. Co., 193 N.J. 86, 94, 935 A.2d 1184 (2007) (quoting Daidone v. Buterick Bulkheading, 191 N.J. 557, 565-66, 924 A.2d 1193 (2007)) (citations, internal quotation marks and editing marks omitted).]
That said, we also have made clear that â[throughout, our analysis is informed by the injunction that words and phrases shall be read and construed with their context, and shall, unless inconsistent with the manifest intent of the legislature or unless another or different meaning is expressly indicated, be given their generally accepted meaning, according to the approved usage of the language.â Ibid, (quoting Soto v. Scaringelli, 189 N.J. 558, 570-71, 917 A.2d 734 (2007) (citations and internal quotation marks omitted)).
N.J.S.A 40A:11-13 does not confer standing upon a âprospective bidderâ to maintain an action in our courts to challenge bidding specifications. Rather, the statute simply imposes limitations upon challenges to bid specifications by prospective bidders. As we have pointed out, the statute requires that, if a âprospective bidderâ wishes to challenge bid specifications, it must make its objections in writing to the contracting unit no less than three business days prior to the date established for the opening of the bids. The statute also makes clear that a challenge raised after that time is void and will have âno impact on the contracting unit or the award of a contract.â
[Jen Elec., Inc., supra, 401 N.J.Super. at 214, 949 A.2d 861.]
Acknowledging that N.J.S.A. 40A:11-13 is a statute of limitations, the panel however concluded that âan entity that proposes to furnish equipment to a direct bidder on a public contract should not be considered a âbidderâ or âprospective bidderâ under our case law or N.J.S.A 40A:11-13. A contrary conclusion would be at variance with the ordinary meaning of the term âbidder.â â Id. at 215, 949 A.2d 861.
To the extent the Appellate Division concluded that N.J.S.A. 40A:11-13 defines what actions must occur before a bid specification challenge will be time-barred and not a restriction upon who has standing to challenge a bid specification, we concur. That conclusion is driven by the application of well-entrenched standards of statutory construction. First, our review of the last paragraph of N.J.S.A 40A:11-13 reveals no ambiguity; the plain language of that legislative enactment makes clear that it sets forth limitations on how and when a bid specification challenge must be prosecuted. Moreover, that provision limits the actions of âprospective bidders,â a term that, although not defined in the Local Public Contract Law, is nevertheless used in various portions of the Local Public Contract Law, see N.J.S.A 40A:ll-25
More to the point, the plain meaning of a âprospective bidderâ in this context is self-evident. In this forward-looking context â when contractors have not yet bid on a contract and are in the process of reviewing and evaluating the bid specificationsâ there simply are no âbiddersâ yet; at that juncture there are only âprospective bidders.â See also Sponsorâs Statement to L. 1999, c. 440, § 19 (eff. Apr.17, 2000) (âThe bill requires any prospective bidder who wishes to challenge a bid specification under the [Local Public Contracts Law] or the [Public School Contracts Law] to file the challenge in writing with the contracting agent or purchasing agent not less than three business days prior to the opening of the bids.â). For those reasons, then, we conclude that N.J.S.A. 40A: 11-13 provides only a time-bar by which to gauge whether bid
The question of who may bring a bid specification challenge requires resort to traditional notions of standing to complain. It is to the application of those standards in this context that we now turn.
B.
Addressing the question of standing, the Appellate Division concluded that âit is well established that only taxpayers, bidders, and prospective bidders may challenge the award of a contract to the successful bidder.â Jen Elec., Inc., supra, 401 N.J.Super. at 212, 949 A.2d 861. One cannot quarrel with that proposition. However, the dynamics applicable to a contract award challenge are fundamentally different from those that inform a bid specification challenge. In the former, all interested parties have accepted the specifications as drawn, have bid on those specifications, and, at least as far as the successful bidder is concerned, have a vested interest in the contract award itself. In contrast, when a challenge to a bid specification is interposed, none of the concerns that trigger a limitation on who can challenge a contract award are present: no party has shifted their position detrimentally and no rights in the contract have vested. Those fundamental differences require that the determination of who may challenge a bid specification must be gauged differently than the determination of who may challenge a contract award.
New Jersey courts always have employed âliberal rules of standing.â N.J. Builders Assân v. Bernards Twp., 219 N.J.Super. 539, 530 A.2d 1254 (App.Div.1986), aff'd, 108 N.J. 223, 528 A.2d 555 (1987). Our âliberal rules of standingâ are animated by a venerated principle: âIn the overall we have given due weight to the interests of individual justice, along with the public interest, always bearing in mind that throughout our law we have been sweepingly rejecting procedural frustrations in favor of âjust and expeditious determinations on the ultimate merits.ââ Crescent Park Tenants Assân, supra, 58 N.J. at 107-08, 275 A.2d 433. And that principle is premised on a core concept of New Jersey jurisprudence, that is, that our ârules of procedure were not designed to create an injustice and added complications but, on the contrary, were devised and promulgated for the purpose of promoting reasonable uniformity in the expeditious and even administration of justice.â Handelman v. Handelman, 17 N.J. 1, 10, 109 A.2d 797 (1954).
Only a substantial likelihood of some harm visited upon the plaintiff in the event of an unfavorable decision is needed for the purposes of standing. Generally, a person who has suffered any economic detriment as a result of [governmental] action can gain standing for judicial review of that action without proving any unique financial damages.....The right of judicial review to protect against improper official action is constitutionally secure and available as of right.
[In re Camden County, 170 N.J. 439, 446-47, 790 A.2d 158 (2002) (citations, internal quotation marks and editing marks omitted).]
Through plaintiffs varied yet unsuccessful attempts to persuade the County to correct the shortcomings in the bid specifications, plaintiff has demonstrated real adverseness between it and the County. Further, because plaintiff has asserted that its equipment is significantly less expensive â and, hence, it stands to reason that the public fisc would benefit from contractors that substitute plaintiffs equipment for the more expensive sole-source specified equipment in a contractorâs quest to secure the lowest responsible, responsive bid â it cannot be questioned that plaintiff has demonstrated a substantial likelihood of harm if its challenge is rejected. Finally, because denying plaintiff standing in this context would âpreclude [the] court from entertaining any of the substantive issues presented for determination[,]â In re Adoption of Baby T, supra, 160 N.J. at 340, 734 A.2d 304, and the significant issues presented here address the very bedrock of public contract bidding requirements â that is, âfree, open and competitive bidding[,]â N.J.S.A 40A:11-13 â plaintiff has established that it has standing to challenge the bid specifications at issue here.
That said, we underscore the very limited nature of our ruling. Plaintiff here was an active, indeed pro-active, participant in the bidding process, and the majority of its concerns addressed core principles of public contracting. Its interest in
IV.
The judgment of the Appellate Division is reversed, plaintiffs complaint is reinstated, and the cause is remanded to the Law Division.
The record on appeal does not include a copy of plaintiff's October 23, 2007 letter to the County or, for that matter, any extrinsic evidence of the transactions between plaintiff and the County up to the re-bid of the project in mid-December 2007. However, plaintiff's complaint in lieu of prerogative writs makes specific allegations in respect of those events and the Countyâs answer admits those allegations. It is on those admissions that we rely.
Plaintiffâs January 3, 2008 letter to the County also is absent from the record on appeal. Although plaintiff alleged the details of the issuance and contents of that letter in its complaint-and that no reply was tendered thereto-the County simply admitted that the letter had been sent and that it spoke for itself; in denying the remaining allegations of that paragraph in plaintiffâs complaint, the County generally denied the allegation that it had not responded to plaintiffâs January 3, 2008 letter. Whether the County did or did not answer that letter is, in the context of this appeal, of little relevance and less materiality.
Plaintiffâs petition for certification also requested that we address â[w]hether taxpayers such as Daidone Electric, Inc., who are both a direct bidder and a taxpayer, are required to comply with the 3-day rule imposed by NJ.S.A. 40A:ll-13(d)." Although the grant of certification in this matter did not limit the issues on appeal, our resolution of the primary issue on appeal-whether plaintiff has standing to challenge the bid specifications-obviates the need to address this second question. Therefore, we decline to do so.
The Appellate Division did not draw this distinction. Instead, after stating an unchallenged proposition-that only bidders, prospective bidders and taxpayers have standing to challenge a contract award-the panel blurred the distinction between bid specification challenges and contract award challenges, and applied to the former the standing rules uniquely developed for the latter. According to the panel, there are "additional prerequisites for challenges to bidding specifications issued by contracting units pursuant to public bidding laws.â Jen Elec., Inc., supra, 401 N.J.Super. at 212, 949 A.2d 861. However, the only "additional prerequisitesâ identified by the panel are time-bars: bid specification challenges are not cognizable after a contract award and, under the provision of the Local