SUPERIOR COURT OF NEW JERSEY
APPELLATE DIVISION
A-3887-94T1
O'NEILL ELECTRIC CO., INC.,
Plaintiff-Appellant,
v.
THE BOARD OF CHOSEN FREEHOLDERS
OF THE COUNTY OF WARREN,
Defendant-Respondent.
_________________________________________________________________
Argued October 29, 1996 - Decided February 14, 1997
Before Judges Stern, Humphreys and Wecker.
On appeal from the Superior of New Jersey, Law
Division, Warren County.
Robert T. Lawless argued the cause for appellant
(Hedinger & Lawless, attorneys; Mr. Lawless, on the
brief).
Brian D. Smith, Special Warren County Counsel, argued
the cause for respondent The Board of Chosen
Freeholders of the County of Warren (Mr. Smith of
counsel, and on the brief).
Edward M. Callahan, Jr. argued the cause for amicus
curiae, National Electrical Contractors Association,
Northern New Jersey Chapter, Inc. (Clancy, Callahan &
Smith, attorneys; Mr. Callahan and James J. Cronin, on
the brief).
Daniel P. Reynolds argued the cause for amicus curiae,
Attorney General of New Jersey (Peter Verniero,
attorney; Joseph L. Yannotti, Assistant Attorney
General, of counsel, Mr. Reynolds, on the brief).
Ravin, Sarasohn, Cook, Baumgarten, Fisch & Rosen,
attorneys for amici curiae Utility & Transportation
Contractors Association of New Jersey, Inc. and
Construction Information Systems, Inc. (Steven E.
Brawer, of counsel, and on the brief).
The opinion of the court was delivered by
HUMPHREYS, J.A.D.
Warren County keeps a list of contractors who pick up
bidding documents on projects for which the County has advertised
for bids. Based on the advice of the New Jersey Division of
Criminal Justice, the County refused plaintiff's request for a
copy of the list. Plaintiff's declaratory judgment action
seeking a copy of the list was dismissed by summary judgment.
Plaintiff appeals, contending: (1) the County's refusal was
contrary to the purpose and intent of the bidding laws; and
(2) the list is a public record under both the Right To Know Law
and the common law and therefore must be disclosed.
We have reviewed the record and the arguments presented.
The judgment is affirmed.
secret creates "the potential for selective disclosure to certain
contractors at the whim of the public official in charge of the
list" and thereby fosters favoritism, contrary to the policy of
the bidding statutes.
The National Electrical Contractors Association has
submitted an amicus brief supporting the plaintiff's position.
Amicus argues that
the pool of subcontractors who may bid on a particular
project is dictated by the general contractors. Any
subcontractor who is not among the general contractors
[sic] favorite few is denied the opportunity to bid the
project. This, in turn, reduces the pool of potential
bidders and ultimately denies the public the benefits
of unfettered competition that the statute is intended
to provide.
Amici curiae Utility & Transportation Contractors Association of
New Jersey, Inc. and Construction Information Systems, Inc. have
filed a brief arguing to the same effect.
The County argues that its non-disclosure policy inhibits
bid-rigging and should be upheld. The Attorney General has filed
an amicus brief supporting the position of the County.
the purposes of this act, be deemed to be public records." Ibid.
(emphasis added).
Plaintiff argues that the Local Public Contracts Law,
N.J.S.A. 40A:11-23, requires governmental subdivisions to make
revisions or addenda to advertisements or bid documents
"available by notification in writing by certified mail to any
person who has submitted a bid or has received a bid package . .
. ." Consequently, plaintiff argues that this statute requires
the compilation of the bidders list to be "maintained." The
County argues, however, that it maintains the bidders list for
administrative convenience and that the requirements of the Local
Public Contracts Law can be met without the list. The County
points out a number of ways in which this could be done, for
example,
[t]hose companies who have filed application forms
expressing general interest in providing certain
commodities or services could merely be delineated on
the county's computer system once they picked up a bid
package. Other prospective bidders who have requested
bid packages by telephone call, for instance, would
have their company's name and address on the
government's telephone logs. Written requests for bid
packages would presumably contain the name and address
of the requesting company on letterhead. Since bid
packages cannot be picked up at (Warren County)
government offices without payment by check from the
prospective bidder, the check would normally provide
adequate information about the bidder's identity. It
is not inconceivable that a prospective bidder would
leave its business card at the government's offices.
And a gifted purchasing official could even maintain
the list of bidders by memory.
The definition of a public record under the Right to Know
Law "has been strictly construed." Board of Educ. v. New Jersey
Dep't of Treasury,
145 N.J. 269, 276 (1996).
The Local Public Contracts Law does not specifically require
that a list of bidders be "maintained." The County has presented
persuasive reasons why those lists are maintained only as a
matter of administrative convenience and not as a requirement.
Accordingly, the list is not subject to disclosure under the
Right to Know Law.
compelling need. McClain v. College Hosp.,
99 N.J. 346, 362
(1985).
In deciding this issue, Judge Stritehoff said:
[N]on-disclosure of [the] bidders' list is an
important means by which bid rigging can be
minimized. In fact, there is a letter that is
attached to the moving papers by the Justice
Department or the Attorney General's office
wherein they recommend that in their opinion the
list is not available until after the bids are
opened.
Bid rigging is not only achievable when
general contractors and subcontractors
[collude] as to price but also can occur when
prospective bidders know in advance that
there is no competition . . . .
For that compelling reason, it is represented
that 20 out of 21 counties in New Jersey, all
of them government purchasing organizations,
and the educational materials provided to
public-purchasing officials support non-disclosure of bidders' lists as a means to
promote competition in government contract.
This critical need for confidentiality cannot be
outweighed by the plaintiff subcontractor's
interest in disclosure particularly where, as
here, . . . there are other reasonable and less
intrusive means by which the company can make its
presence known to general contractors: i.e., there
are two different services by which that
information is given to general contractors as to
those who might be available.
In addition, there is available to the plaintiff a
list of those contractors or general contractors
who might be eligible to obtain and to bid on
different jobs.
Plaintiff argues that the statistical information presented does not support the position that public access to the bidders list will result in more bid rigging. Plaintiff relies on Philadelphia Newspapers, Inc. v. Department of Law and Public
Safety,
232 N.J. Super. 458, 464 (App. Div. 1989), in which we
found that disclosure of confidential information concerning the
governor's helicopter use was proper. The State in that case
presented "no evidence that disclosing the information would
render the Governor or Attorney General any more vulnerable to
assassination than not disclosing the information." Id. at 465-66.
However, in the present case, substantial evidence was
presented that disclosure of the list would be harmful to the
public interest. The County's Purchasing Agent testified that
the New Jersey Association of County Purchasing Officials has an
active resolution endorsing the Division of Criminal Justice's
position that this list should not be disclosed. The purchasing
agent's opinion was that disclosure would foster bid-rigging.
We agree that access to a bidders list facilitates collusive
or bid-rigging arrangements and that withholding disclosure makes
this more difficult. The Attorney General persuasively argues
that
to the extent that a prospective bidder can ascertain
the identity of his competitors or, better yet from the
[bidder's perspective], ascertain that he has no
competitors, the bidder can adjust his bid so as to
obtain the award of the contract at a higher price than
would be required if the bidder were faced with
uncertainty as to the nature of his competition.
The potential bidder could thereby "adjust" his bid if aware that
there was little or perhaps no competition.
In addition, the Attorney General and the County point out
that there are other ways for subcontractors such as plaintiff to
identify the contractors likely to bid on projects of this type.
For example, lists of bidders are available after bid openings
and this will allow a subcontractor to determine which
contractors are likely to bid future projects. Further, if
contractors have been prequalified pursuant to N.J.S.A. 48:11-28
to -31, then a list of these contractors would be available.
Bid-rigging is an extremely serious problem which costs the
public enormous sums of money. The relatively insignificant
interest of plaintiff and amici in obtaining bidders lists cannot
overcome the grave danger to the public resulting from a failure
to keep the door tightly closed to potential corruption in public
bidding. See Township of Hillside v. Sternin,
25 N.J. 317, 326
(1957) (in public bidding matters, "it is better to leave the
door [to corruption and favoritism] tightly closed than to permit
it to be ajar. . . ."); see also N.E.R.I. Corp. v. New Jersey
Highway Auth., N.J. (1996) (slip op. at 15-16). The
bidder's list need not be disclosed.
Affirmed.