On May 24, 2013, the Honorable Richard J. Geiger, J.S.C., of the Superior Court of New Jersey Cumberland, Gloucester, Salem Vicinage, ruled that the Woodstown-Pilesgrove Regional School District (“District”) improperly awarded a contract in excess of $2.5 million to an unqualified contractor, defendant Mobilease Modular Space, Inc. (“Mobilease”). The suit was filed by Richard W. Hunt, shareholder of the regional New Jersey law firm, Parker McCay P.A., on behalf of Modular Genius, Inc., (“MG”). The court agreed with Hunt that the contract should be awarded to MG, the second lowest bidder.

In January 2013 the District issued a notice for bids for construction of a new Early Childhood Learning Center. The building, a pre-fabricated structure with 17 modular units, required on-site construction that included excavation and substantial below-grade footings and foundations before assembly on-site. Once assembled, additional on-site structures included an entire pitched roof (including roof trusses, not pre-fabricated) and a custom built multi-purpose room (including on-site installation of interior and exterior walls, windows, doors, hardware, flooring, ceiling, millwork and fire walls).

Hunt contended that under N.J.S.A. 18A:18A-26, of the Public School Contracts Law, bidders for public school construction work must meet the prequalification requirements established by the New Jersey Division of Property Management and Construction (“DPMC”). He argued that under DPMC regulations, this project required the bidders to possess a C008 (General Construction) or C009 (General Construction/Alterations) classification at the time of the bid opening. The State defines “C008” general construction as the construction of new “out-of-the-ground” buildings of institutional quality requiring the use of at least three additional unrelated building trades or crafts in significant amounts. These trades include general construction, plumbing, HVAC, electrical or structural steel. This project required not only the construction and delivery of prefabricated units, but also the aforementioned substantial on-site construction, therefore aligning with the State’s designation of the term “general construction”.

Hunt argued that the lowest bidder, Mobilease, was not properly classified or pre-qualified for the project because it possessed only a C089 classification (Prefabricated Buildings) and a C091 classification (Reloadable Buildings) at the time of its bid submission and award. On the other hand, MG possessed the general construction C008 classification at the time it submitted its bid, and therefore met the requirements established by the Public School Contracts Law. While Mobilease did obtain the proper classification for this project after receiving the contract award, it only made them eligible for subsequent projects. The law required that Mobilease possess the requisite qualifications at the time the District awarded the contract.

The court’s decision underscores the importance of strict compliance with the Public School Contracts Law. A local school district has no discretion to accept a bid from a bidder on an out-of-the-ground building project that has not been pre-qualified to serve as a general contractor.