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A Win for Our Construction and Procurement Practice Area as we Successfully Defend The Township of Pennsauken

December 1, 2023

In a win for our Construction and Procurement practice area, Department Chair Rick Hunt, with help from associates Sean Fannon and Young Yoon successfully argued on behalf of the Township of Pennsauken in their case against Plaintiffs Ernest Bock and Sons-Dobco Pennsauken Joint Venture.

On March 23, 2023, the Township of Pennsauken solicited bids for their new public library and municipal complex in compliance with the Local Public Contracts Law stating that the contract would be awarded to the lowest responsible bidder meeting the requirements, legal conditions and other provisions of the request. As part of the required specifications, bidders must be in compliance with the Prevailing Wage Act, and all contractors were registered with the New Jersey Department of Labor and Workforce Development (DOL) at the time of bidding, as part of the Public Works Contractor Registration Act (PWCRA). On May 10, Contractors Ernest Bock & Sons, Inc. and Dobco, Inc. entered into a joint venture agreement, forming Joint Venture for the specific purpose of bidding on, and if awarded, performing construction of the project. Rather than submitting a PWRCA registration certificate, the Joint Venture submitted individual PWCRA certificates for each specific entity.

When bids were opened, it was determined that the Joint Venture was the lowest bidder, with Terminal Construction Corporation being second lowest. Terminal submitted a letter to the township protesting Joint Venture’s bid, contending they did not meet the necessary requirements, making Terminal the lowest responsible bidder.

In a June 14 letter from the DOL, it was determined that the bidder must in fact be registered with the DOL under the PWCRA, and any work Joint Venture performed while unregistered would be a violation. As such, the contract was awarded to Terminal.

On June 22 Joint Venture registered as a contactor under the PWCRA and filed a complaint in an attempt to be renamed the contractor. The trial court issued temporary restraints prohibiting the Township form proceeding with the bid award, prompting an application by the Township and Terminal to dissolve the restraints.  While Joint Venture argued that each individual business entity was registered under the PWCRA and should be entitled to perform the work. The trial court denied Joint Venture’s application for injunction and granted the Township and Terminal’s application to dissolve the restraints.

After appeal, The Superior Court of New Jersey, Appellate Division determined that in the context of public bidding, the court’s function is to “preserve the integrity of the competitive bidding process and to prevent the misapplication of public funds.” It was determined that Joint Venture’s omission of the PWCRA registration was a material deviation from the bid specifications of the Township. Making an exception to the specifications, the court determined, would impact local governments’ clarity in determining compliance with the PWCRA.

The court’s full decision can be found HERE.

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