Opinion ID: 2054068
Heading Depth: 1
Heading Rank: 2

Heading: Did the TPA comply with administrative due process in its adoption of the project-labor-agreement requirement and its rejection of Harms's bid?

Text: Appellants argue that the agency's resolutions are rules within the statutory definition of the Administrative Procedure Act (APA), N.J.S.A. 52:14B-1 to -21, and therefore that the agency must comply with the notice-and-comment provision of N.J.S.A. 52:14B-4. That provision essentially requires that prior to the adoption of any rule, the agency shall give at least thirty-days notice of its intended action; provide a summary of the proposed rule, with an opportunity for all interested persons to submit data, views, or arguments in writing or orally; and prepare a report summarizing the content of such submissions and the agency's response to those views, data, and arguments. This Court's decision in Metromedia, Inc. v. Director, Division of Taxation, 97 N.J. 313, 478 A. 2d 742 (1984), delineates the appropriate test to apply when determining whether an agency action constitutes rulemaking. Among the factors to be considered are: (1) the segment of the public to be affected; (2) the generality of application; (3) the prospectiveness of the result; and (4) the novelty of the legal standard announced. Id. at 331-32, 478 A. 2d 742. All such factors need not be present for an agency determination to constitute rulemaking. Id. at 332, 478 A. 2d 742. The agency should balance the factors according to weight, not number. In re Request for Solid Waste Util. Customer Lists, 106 N.J. 508, 518, 524 A. 2d 386 (1987). The TPA denies that the Metromedia factors are implicated. It contends that the specification of project-labor agreements is altogether exploratory and tentative as applied to the Widening Project and thus does not constitute rulemaking. Appellants contend that the policy is far more extensive than that because it will apply to all succeeding Turnpike-improvement projects. They further contend that the agency adopted the policy hurriedly, without consultation or comment from any members of the interested public. We do not resolve in this case whether this agency action is subject to the strict requirements of N.J.S.A. 52:14B-4. We believe that the substantive issues transcend those procedural issues. We are certain, however, that whatever policies for project-labor agreements the TPA pursues, it would develop such policies more effectively following a hearing process. In addition, that process would establish a record against which the contesting claims under constitutional and statutory guidelines could be better assessed by a reviewing court. Specifically, if the record clearly established the relationship between the specifications and the policies of the bidding laws, we could better resolve the question of compliance with public-bidding laws. For example, a detailed record with comment and response as frequently occurs in the rulemaking context, see N.J.S.A 52:14B-4, might have better explained how Harms's present employees might have fit into the bidding scheme. Could Harms have retained them as the TPA believes, or did the hiring-hall provisions effectively exclude them? A project-labor agreement has many subtle and complex facets, infra at 21-24, 644 A. 2d at 83, and overall agency policy should address the merits of the plethora of issues that are proper for inclusion in a project-labor agreement.
Although the APA might not have required notice and a hearing prior to the adoption of the project-labor-agreement requirement, we address the notion of administrative due process. The APA alone does not exhaust the requirement of administrative due process; the fact that [] agency action is not subject to the strict requirements of [the APA] does not mean that no process is required. In re Dep't of Ins.'s Order Nos. A89-119 & A90-125, 129 N.J. 365, 382, 609 A. 2d 1236 (1992). If the APA does not apply, we have held that so long as the parties had adequate notice, a chance to know opposing evidence, and the opportunity to present evidence and argument in response, due process would be fundamentally satisfied. Ibid. The TPA argues that due-process requirements have been met in this case because it provided Harms's counsel with the opportunity to attend and to speak at the Executive Session during which both the resolution establishing the project-labor-agreement requirement and the resolution vacating Harms's bid were adopted. We agree. Principles of administrative due process do not require that we reinstate Harms's bid. Although the TPA did not deny Harms administrative due process, we resolve here the remaining question whether the TPA had the authority to reject all bids after it had opened Harms's bid. In Cardell, Inc. v. Township of Woodbridge, 115 N.J. Super. 442, 450, 280 A. 2d 203 (App.Div. 1971), the court noted that public entities do not have unbridled power to reject bids, even where such right is served in the invitation for bidding because such power would violate public policy and competitive-bidding laws. However, the court stated: We do not imply that a [public entity] is without power to reject all bids under proper circumstances. No [public entity] could effectively engage in competitive bidding without such power. At the very least, the existence of the possibility of total rejection of bids serves as a strong inducement to bidders to keep their bids as low as circumstances permit. Suffice it to say that when a [public entity] concludes in good faith that the purposes of the public bidding statute are being violated, it may reject all bids submitted and in its discretion order a readvertising of the contract. Furthermore,    should circumstances arise which might cause the [public entity] to abandon or substantially revise the project, then a total rejection of bids might well be required. [ Id. at 450-51, 280 A. 2d 203.] The Appellate Division, in M.A. Stephen Construction Co. v. Borough of Rumson, 117 N.J. Super. 431, 438, 285 A. 2d 55 (1971), applied the Cardell rationale and held that a public entity could not circumvent the requirement of our public-bidding laws to award contracts to the lowest responsible bidder by the entity's arbitrary or unreasonable action. Further, the M.A. Stephen court held that a public entity had the right to reject all bids and the duty to exercise that right in good faith and for sound public reasons. Ibid. The TPA's Resolution 25-93 rejected all bids received for Contract No. W-6411 because the bid specifications provided to prospective contractors lacked the requirement that contractors enter into a project-labor agreement with appropriate BCTC unions. That resolution, together with Resolution 19-93, contained the TPA's reasoning for rejecting the bids. The TPA materially changed its specifications incorporating the project-labor requirement to ensure prompt settlement or prevention of labor disputes in the public sector, which is our State's declared policy, see N.J.S.A. 34:13A-2; to guarantee labor stability; and to advance harmonious labor-management relations. In the best interest of the TPA and the public, the TPA wanted to complete in a timely manner the Widening Project within the Project's budget. The TPA had experienced work stoppage on the Widening Project for approximately three weeks in July 1993. That circumstance, along with the Boston Harbor decision, caused the TPA to substantially revise the project by including a bid specification requiring potential contractors to enter into project-labor agreements with BCTC unions and rejecting all bids submitted on Contract No. W-6411. Cardell, supra, 115 N.J. Super. at 451, 280 A. 2d 203. The TPA may have erred in its view of the law, but on this record, no evidence exists to show that in rejecting all bids the agency acted other than in good faith, in its interest, and in the interest of the public.