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In ML, Inc. v. Edison Township Board of Education, the New Jersey Appellate Division reinforced the discretion of public entities to draft and enforce timing requirements as to the dates of key bid forms that are required to be submitted with public bids. The court upheld the Edison Township Board of Education's decision to award a school construction contract to Vanas Construction Co., Inc., finding that the lower bids submitted by Benard Associates, Inc. and ML, Inc. contained material, non-waivable defects relating to the dates on various forms.
The ruling underscores not only the discretion that public entities have in drafting and enforcing requirements in bid specifications, but also how critical it is for bidders to pay attention to the details in the specifications and to submit accurate, timely, and fully compliant bid forms.
The Public Bidding Dispute
The dispute began after Edison Township Board of Education solicited bids for an addition to one of its schools. Among others, the Board received bids from plaintiff ML, Inc. ("ML"), plaintiff Benard Associates, Inc. ("Benard"), and defendant Vanas Construction Co., Inc. ("Vanas"). Of the three bids submitted by the parties, Benard's bid was the lowest, ML's bid was the second lowest, and Vanas's bid was the highest.
Nonetheless, the Board awarded the contract to Vanas, deeming it to be the "lowest responsible bidder" because its bid, unlike those of ML and Benard, did not suffer from any material defect. ML and Benard filed suit to block the Board of Education from awarding the school construction contract to Vanas.
The trial court upheld the Board's award to Vanas. It found that the Board reasonably rejected ML's bid as materially defective because of the staleness of the information in its Division of Property Management & Construction Form 701 ("the DPMC form") attesting to the status of work that ML's electrical subcontractor was obligated to perform on other pending projects. The DPMC form requires each bidder to provide "current" information about the status of its outstanding work and that of its designated subcontractors. In this case, ML's DPMC form was dated December 18, 2024, but the bid opening was June 10, 2025, representing a gap of approximately five months.
The trial court also determined that the Board properly rejected Bernard's bid for not complying with bid bond requirements. The bond was dated over a month before the bid opening date of June 10, 2025, despite the fact that the Board's instructions explicitly required the bid bond to bear the same date as the proposal form. More importantly, during the intervening month, a contract addendum (Addendum #4, issued May 30, 2025) materially altered the project's scope of work and pricing.
Appellate Division Upholds Contract Award
The Appellate Division agreed that the Board reasonably rejected ML's and Benard's bids for the stated defects. Accordingly, it affirmed the contract award to Vanas.
With regard to ML's bid, the Appellate Division agreed that the staleness of the DPMC form was reasonable grounds to reject the bid. It also found that even though regulations (N.J.A.C. 17:19-2.13) don't explicitly demand "same-day" forms, the Board had clearly required "indicating amount ... as of the date of bid opening."
"In its role as the procurement agency, the Board reasonably concluded the lengthy gap of over five months between the date of the DPMC form in December 2024 and the bid opening date in June 2025 rendered ML's bid unresponsive," the court wrote. "In making that assessment, the Board had the statutory authority as a local procurement agency to treat the DPMC form's untimeliness more stringently than the Treasury otherwise might have on a State contract."
As for Bernard, the Appellate Division concluded that the Board had a reasonable basis to reject Benard's bid because of its non-compliance with the Board's bid bond requirements. In support, it cited that the Board's instructions explicitly required the bid bond to bear the same date as the proposal form. The appeals court also agreed that a bonding company willing to ensure the original project on May 13 might have refused to bond the project after the significant intervening addendum, presenting a material risk to the Board.
"In particular, unlike Vanas, Benard's bid bond was dated over one month before the opening date of bid submissions and, notably, before a contract Addendum issued in the interim by the Board had materially altered the project's scope of work and pricing," the court wrote.
Important Takeaways for Public Boards and Bidders
The Appellate Division's decision in ML, Inc. v. Edison Township Board of Education offers important reminders for public boards and bidders alike.
For public entities, the decision reinforces the ability of the board to draft bid specifications with reasonable requirements and to stringently enforce those requirements.
For bidders, they need to be mindful of the timing requirements for various forms that they must submit with a bid and comply with those conditions. The legal rationale of the Appellate Division's decision can also apply to additional documents required to be submitted with a bid. It also will serve as a basis for other bidders to object to lower bids from their competitors. However, as to the DPMC 701 form and bid bond bidders at issue in the case at hand, prospective bidders should note as follows:
DPMC Form 701 and Timing
- If a form is too stale (e.g., months old), the public entity may reject the bid because it no longer reliably reflects the bidder's workload/uncompleted contracts.
- Even if state-level regulations don't explicitly require same-day forms, a local board can impose stricter rules via its bid solicitation documents.
Bid Bond Requirements
- The bid bond must be dated appropriately. In this case, the Board required it to share the same date as the proposal.
- If the bond is dated before an addendum that changes the scope or cost, the Board may be justified in rejecting the bond, because the surety may not have agreed to the new scope.
- Such a defect (wrong date) may be non-waivable if it undermines the enforceability or reliability of the bond.
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