Sam Destito and Charles Fisher Secure Appellate Victory for Competitive Bidding Practices in New Jersey Educational System Bid Awards

Monday, July 25, 2011
Representation of Garden State School Bus Contractors Association and taxpayer Javier Fernandez results in ground-breaking appellate decision and a road map for public school-related bidding across New Jersey's educational system.

Windels Marx today announced a victory for its clients, Garden State School Bus Contractors Association and Javier Fernandez, on their claim that the Board of Directors of the Passaic County Education Services Commission ("PCESC") violated the Department of Education statute and regulations when it failed to forfeit the bid bond of a contractor who won multiple school bus transportation routes, but subsequently refused to perform on all the routes it won.

In re Garden State School Bus Contractors Association and Javier Fernandez, Petitioners-Appellants, v. Board of Directors of the Passaic County Education Services Commission, K&M Transportation, Inc. and Bondex Insurance Company, Respondents-Respondents, the issues involved:

  • One contractor (K&M Transportation) submitted bids on 29 school bus transportation routes and was the lowest responsible bidder on eight of the routes;
  • PCESC then engaged in private, post-bid communications during which K&M advised that it only wanted to perform on two of the eight routes;
  • PCESC allowed K&M to cherry-pick the two routes it wanted and walk away from the other six routes it won, but did not want.
  • PCESC failed to demand the forfeiture of K&M's bid bond contrary to the statutory and regulatory directive mandating that the bid bond of a contractor who refuses to sign a contract "shall be forfeited."
  • The Commissioner of Education determined that PCESC's conduct was "arbitrary, capricious and unreasonable," yet declined to order the forfeiture of the bid bond.

The Appellate Division reversed the Commissioner of Education's decision to not order the forfeiture of K&M's bid bond, holding that once K&M was determined to be the lowest responsible bidder on eight routes, it was under a contractual obligation to perform on all eight routes.

Windels Marx partners, Charles M. Fisher and Samuel G. Destito, both of the Madison, New Jersey office, represented Garden State School Bus Contractors Association and Javier Fernandez.

Mr. Fisher said, "We applaud the decision of the Appellate Division. This is a victory for public bidding generally and, more specifically, for competitive practices in New Jersey's educational system."

Mr. Destito added, "Upholding competitive bidding practices and following through on contractual obligations is in the best interest of New Jersey's citizens. At its core, this decision ensures that contractors who submit a public bid will perform or else face the mandatory forfeiture of their bid bonds. This decision will strengthen the integrity of the public bid process and encourage more bidders to participate, which will lead to lower bids, increased competition and, ultimately, result in greater savings for New Jersey taxpayers."

The decision and quotes from Mr. Fisher were reported as an August 24, 2011 article in the School Transportation News entitled "New Jersey School Bus Contractors Group Wins Legal Case, Forfeiture of Improper Bid."

About Windels Marx

With offices in New York, NY, Madison, NJ, New Brunswick, NJ, Princeton, NJ, and Stamford, Connecticut, Windels Marx is a full service law firm formed by the merger of two high quality, well known firms, Windels, Marx, Davies & Ives, with roots dating from the mid 1800's, and Lane & Mittendorf, LLP, itself one half century old. The Firm represents a diverse group of domestic and international clients in a broad-based general legal practice centering on transportation, corporate, litigation, real estate, employment, and other major business practice areas.