When a local public entity gathers bids for a project, is it compelled to award its project to one of the bidders? The short answer is: no. Under New Jersey’s Local Public Contracts Law (LPCL), N.J.S.A . 40A:11-24(a), a local public entity has the express power during the public bidding process to “award the contract or reject all bids.” Penpac, Inc. v. Morris County Mun. Util. Auth. , 299 N.J. Super. 288, 295 (App. Div. 1997).
This right has been reaffirmed by the New Jersey courts on numerous occasions. A public entity’s decision to reject all bids may promote competitive bidding because it “serves as a strong inducement to bidders to keep their bids as low as circumstances permit.” Penpac , 299 N.J. Super. at 296. What is less clear, however, is the standard that a local public entity must apply when determining to reject all bids, and equally important, the proper standard of review to be used by courts in reviewing a local public entity’s decision to exercise that power.
Local Public Entity’s Right to Reject All Bids
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