Opinion ID: 2054068
Heading Depth: 1
Heading Rank: 11

Heading: Does the concept of the lowest responsible bidder permit a public entity to condition the award of a contract on provision of a unionized labor force?

Text: N.J.S.A. 27:23-6.1(a) provides that the TPA, in the exercise of its authority to make and enter into contracts and agreements necessary or incidental to the performance of its duties and the execution of its powers,    shall award    contract[s] to the lowest responsible bidder   . In Trap Rock Industries, Inc. v. Kohl, 59 N.J. 471, 284 A. 2d 161 (1971), cert. denied, 405 U.S. 1065, 92 S.Ct. 1500, 31 L.Ed. 2d 796 (1972), we stated that the legislative mandate that a bidder be `responsible' embraces moral integrity just as surely as it embraces a capacity to supply labor and materials. Id. at 481, 284 A. 2d 161. Responsibility may also involve the financial ability, experience, and skills of the bidder. Arthur Venneri Co. v. Paterson Hous. Auth., 29 N.J. 392, 403, 149 A. 2d 228 (1959). Does the characteristic of responsibility encompass a contractor's use of a designated union such as BCTC for its labor force? In Wittie Electric Co. v. State, 139 N.J. Super. 529, 532, 354 A. 2d 659 (App.Div. 1976), the court held that a contractor's employment of nonunion labor was not an appropriate factor to consider when assessing the responsibility of that contractor, who had submitted the lowest bid for a public contract. The State did not appear to have a requirement for union labor listed among the specifications for the contract in Wittie. In addition, the Attorney General had earlier rendered a formal opinion declaring that the State could not reject the lowest bid on a public-construction project solely on the basis that the bidder employs nonunion labor and award the contract to the next lowest bidder that employs only union-affiliated labor. Op. Att'y Gen. No. 24, 123 (1975). The Attorney General observed that N.J.S.A. 52:32-2, dealing with contracts for the repair or construction of public buildings, mandates that the State award the contract to the lowest responsible bidder. The opinion noted that our courts have established the criteria for determining the lowest-responsible bidder. Id. at 124. Heretofore, union affiliation had not been recognized as such a criterion. In that opinion, the Attorney General explained the holding of Keyes Electrical Service v. Board of Chosen Freeholders, 15 N.J. Super. 178, 83 A. 2d 61 (Law Div. 1951). In Keyes, the court held that the county was permitted to reject all bids and to add an amended specification to the project requiring that the prospective contractor hire employees who will work in harmony with the other trades employed on the public-construction project and that all labor conform to the practices of the local labor unions because the specification was basically a standard employment practice and was not discriminatory. Id. at 187-88, 83 A. 2d 61. The Attorney General points out, however, that the Keyes court said that the amended specification did not prohibit the lowest bidder (who was nonunion) from bidding a second time. Further, the Attorney General noted that if the county had refused to award the contract to the plaintiff after submitting the lowest bid a second time, the court would recognize the bidder's claim and remedy it. Keyes, supra, 15 N.J. Super. at 183-84, 83 A. 2d 61, had cited Paterson Chronicle Co. v. Mayor & Aldermen, 66 N.J.L. 129, 48 A. 589 (Sup.Ct. 1901), which allowed review of a city resolution requiring that the municipality purchase printing services from only union shops on the basis that the exclusion of sources of services not of a specified class    tends to create a monopoly and impose a possible additional burden on the taxpayers. Id. at 131, 48 A. 589. Historically, other states have adhered to policies that disallow public-bidding requirements demanding union affiliation. See Mugford v. Mayor & City Council, 185 Md. 266, 44 A. 2d 745, 747 (1946) (noting that municipality cannot discriminate in favor of labor union members); In re Cristo, Inc. v. State of N.Y. Office of General Services, 42 A.D. 2d 481, 349 N.Y.S. 2d 191, 193-94 (1973) (holding that agency abused its discretion in rejecting lowest bidder because nonunion); State ex rel. United District Heating, Inc. v. State Office Building Commission, 125 Ohio St. 301, 181 N.E. 129, 129 (1932) (holding public agency may not deny contract to lowest bidder on sole ground union labor not employed exclusively); Daniel B. Van Campen Corp. v. Building & Construction Trades Council, 202 Pa.Super. 118, 195 A. 2d 134, 137 (1963) (noting that city may not distinguish between contractors employing nonunion workers from those employing union workers). However, a Minnesota law authorizes the City of Minneapolis to enter into project-labor agreements with appropriate labor organizations and contractors to provide labor stability and prevent work stoppage for city construction projects and projects concerning its convention center and related facilities. 1989 Minn. Sess. Law Serv. ch. 54, § 2. The city has included those agreements in its bid specifications for such projects. See Glenwood Bridge, Inc. v. City of Minneapolis, 940 F. 2d 367 (8th Cir.1991). To our knowledge, no State court of last resort has resolved the issue of the claimed invalidity of project-labor agreements under State law. In Central Artery, supra, the specification was withdrawn. 565 N.E. 2d at 461. In Northern Ohio Chapter of Associated Builders & Contractors, Inc. v. Gateway Economic Development Corp., No. 1:92 CV 0649, 1992 WL 119375, at []14 (N.D.Ohio May 12, 1992), the State-law claims were dismissed but not decided once federal jurisdiction was lost. c.