NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

PER CURIAM.

This is a public bidding dispute. On leave granted, plaintiff Montana Construction Corp., Inc. (Montana) appeals from the trial court order dismissing its complaint, which challenged the contract award by defendant Township of Lyndhurst to defendant J. Fletcher Creamer & Son, Inc. (Creamer). Montana was the low bidder, but Lyndhurst rejected its proposal as non-responsive and awarded the contract to Creamer. Montana challenges the township's determination that Montana violated a material bid specification, which provided that "[u]nbalanced bids (penny bids) for units will result in disqualification of the bidder." As we agree that Montana's bid was non-responsive, we affirm.

I.

The present dispute arises out of the township's rebidding of its contract for emergency water main and sewer main repairs.1 The rebidding followed the township's rejection of bids by the same two firms in February 2014 because they were unbalanced and included penny bids.

The township's bid specifications for the initial round stated that bids "may be rejected" if "[t]he bid is inappropriately unbalanced." The bids consisted of unit prices for work that was, by its nature, unpredictable. The number and nature of the utility repairs could not be determined in advance. The township would pay the successful bidder based on the equipment and labor deployed, according to accepted unit prices.

The specifications included a bid form that required bidders to propose hourly rates for: several identified pieces of equipment; various machines and vehicles with an operator; laborers and supervisors; and mobilization and demobilization of equipment.2 Bidders were also required to propose "premium" hourly labor rates for work performed outside the hours of 7:30 a.m. and 4 p.m. Monday through Friday, excluding holidays. Bidders were also required to provide a percentage markup of materials above factory invoice price.

Both Montana and Creamer submitted bids that included rates of one cent per hour for various unit categories. Montana's bid proposed hourly rates of $90 for a tandem dump truck with driver, and $250 for laborers, and one cent for all other equipment and labor categories. As the township's board of commissioners acknowledged in its resolution rejecting both bids, "[T]he two lower bidders, Montana Construction and J. Fletcher Creamer & Son submitted unbalanced bids, where the majority of items were bid at one penny."3 The board continued, "[T]he Qualified Purchasing Agent has recommended that the bids be rejected, and rebid excluding penny bids...." The purchasing agent, Thomas F. Carroll, also proposed combining the water main and sewer main contract. The board accepted both recommendations.

Following the board's action, the township issued a notice that it would receive sealed bids on March 4, 2014 for the "water and sewer main repair (re-bid as one contract)." The notice stated that bids "must be made on the Proposal form" provided.

The new bid proposal form expressly addressed the problem that prompted the rebidding. It stated, "Unbalanced bids (penny bids) for units will result in disqualification of the bidder." Although the new bid proposal form, like its predecessor, required bidders to propose hourly rates, the form separated labor prices from equipment prices. The list of equipment was also revised.4 Mobilization and demobilization costs were to be included within the other quoted prices. Bidders were again required to provide a percent increase for premium hours.

Unlike the previous iteration, the bid form provided a Bid Worksheet, which included a formula "to determine the lowest responsive and responsible bidder." The worksheet calculated the cost at "regular time" and "premium time" for the use of each form of equipment for an eight-hour or four-hour period, depending on the item; an eight-hour shift for a foreman, an operator, a driver and three laborers; and a two-hour shift for a general foreman. The "sum total" was calculated by adding amounts equal to seventy-percent of the regular-time-cost and thirty-percent of the premium-time-cost. The purchasing agent later testified that he devised the worksheet after reviewing charges actually incurred for water and sewer main repair by the incumbent contractor, which happened to be Montana. His goal was to approximate the equipment and labor used "on a typical dispatch for an emergency repair."

On March 4, 2014, Lyndhurst opened five sealed bid proposals, including submissions from Montana and Creamer, who were, again, the two low bidders. Their proposed hourly rates are set forth below:

Utilizing the formula in the Bid Worksheet, Montana's total bid of $5,195.56 was almost twenty-five percent lower than Creamer's total bid of $6,890.00. However, upon purchasing agent Carroll's recommendation, Lyndhurst concluded that Montana's bid was "not ... responsive to the specifications," and its "bid proposal was unbalanced." Therefore, Montana was not eligible for consideration. The board awarded the contract to Creamer.

Carroll asserted in deposition that public works contractors would understand that the term "penny bid" referred to "nominal pricing not reflective of the actual market value of the item." Carroll certified that any public works bidder would understand that the term should not be taken literally, and would cover bids of one dollar as much as it would bids of one cent. He noted that Montana bid $1 for every equipment category, and the extreme disparity between Montana's high labor rates, and nominal equipment rates, presented the possibility of unpredictably large costs in labor-intensive jobs. Carroll acknowledged that Creamer had also proposed several bids of $1, $5 and $25, and did not ascertain in all cases whether they comported with market value. Nonetheless, "looking at it ... overall," he did not consider Creamer's bid to be unbalanced.

According to a recognized industry reference guide for construction equipment costs, Creamer's proposed prices for equipment were also below market rates. However, the differential was not as extreme as that applicable to Montana's prices. For example, according to the guidebook, the hourly ownership and operating costs of a tandem is $110.45, whereas Montana bid $1 and Creamer bid $25. A Creamer representative certified that Creamer's bid was not unbalanced, because its general foreman, priced at $1 an hour, was deemed part of overhead, and other forms of equipment priced nominally were adjuncts of the vehicles or larger machines which were priced at market rates.

In response to the township's rejection of its bid and selection of Creamer, Montana filed a verified complaint and order to show cause seeking an order restraining the township from awarding the contract to Creamer, and declaring Montana the lowest responsive and responsible bidder entitled to the contract award. The parties voluntarily agreed to stay the contract award pending resolution of Montana's complaint. After an expedited period of discovery, the case was heard as a summary action without a testimonial hearing. See R. 4:67. After oral argument, Judge Lisa Perez Friscia entered judgment on October 7, 2014, dismissing Montana's complaint.

Judge Friscia concluded that the term "unbalanced bids/penny bids" in the township's bid proposal form clearly meant "nominal amounts," and bidders were forewarned that including nominal amounts in a bid would result in disqualification. The court agreed that the specification regarding unbalanced, penny bids was a non-waivable, material term. Montana's bid was non-responsive. It included fourteen nominal bid amounts. Its bid "would have produced substantial disparities in costs" that would be "detrimental ... to the municipality" and "adversely affect[] a fair and competitive bidding process." Judge Friscia concluded that Montana failed to establish that the municipality was arbitrary or capricious in finding that Montana's bid was unbalanced. In doing so, she noted the record evidence that Montana proposed inflated prices for some contract items to compensate for its nominal bid costs.

On appeal, Montana argues the trial court erred in finding that the township intended, by its proscription of penny bids, to bar "all nominal or unbalanced unit price items." Montana also argues the court erred in upholding the township's rejection of its bid.

II.

Our review is of the court's findings after trial in a summary proceeding under Rule 4:67, as distinct from a motion for summary judgment under Rule 4:46. Nonetheless, as the trial court's findings of fact were based on documentary evidence alone, and no live testimony was heard, no special deference to the findings is warranted. See Clowes v. Terminix Int'l, Inc., 109 N.J. 575, 587 (1988). We also review de novo the court's legal conclusions. Manalapan Realty, L.P. v. Twp. Comm. of Manalapan, 140 N.J. 366, 378 (1995). Like the trial court, we must determine whether the board's rejection of Montana's bid as non-responsive was arbitrary, capricious, or unreasonable. In re Protest of the Award of the On-Line Games Prod. & Operation Servs. Contract, 279 N.J.Super. 566, 590 (App. Div. 1995) ("The standard of review on the matter of whether a bid on a local public contract conforms to specifications ... is whether the decision was arbitrary, unreasonable or capricious.").

We are also guided by well-established principles governing public bidding disputes. A public contract shall be awarded to the lowest responsible bidder, N.J.S.A. 40A:11-4(a), where "[l]owest responsible bidder" means "the bidder or vendor: (a) whose response to a request for bids offers the lowest price and is responsive; and (b) who is responsible." N.J.S.A. 40A:11-2(27). "`Responsive' means conforming in all material respects to the terms and conditions, specifications, legal requirements, and other provisions of the request." N.J.S.A. 40A:11-2(33). Responsiveness is at the heart of the dispute here.

To be responsive, bids must not materially deviate from the specifications and requirements set forth by the local contracting unit. Meadowbrook Carting Co. v. Borough of Island Heights, 138 N.J. 307, 314 (1994). "[A]ny material departure invalidates a nonconforming bid as well as any contract based upon it." Ibid. (citing Twp. of Hillside v. Sternin, 25 N.J. 317, 323 (1957)).

A bidder who claims entitlement to a contract as a low bidder must, as a threshold matter, establish it was materially responsive. Otherwise, the bidder lacks standing to protest the award to another.

In other words, "the lowest bidder may seek a judicial review of the award of a municipal contract, but must stand or fall on its own entitlement to the contract." J. Turco Paving Contractor, Inc. v. City Council of Orange, 89 N.J.Super. 93, 100 (App. Div. 1965) (following William A. Carey, supra) (internal quotation marks omitted). "If the non-compliance is substantial and thus non-waivable, the inquiry is over because the bid is non-conforming and a non-conforming bid is no bid at all." In re Protest, supra, 279 N.J. Super. at 595; see also Hall Constr. Co. v. N.J. Sports & Exposition Auth., 295 N.J.Super. 629, 635 (App. Div. 1996) ("The law is clear that where a party does not materially respond to the bid specifications he cannot be classified as a bidder at all, since the specifications are mandatory and jurisdictional.") (internal quotation marks and citation omitted).

At issue here are unbalanced unit price bids. "An unbalanced unit price bid is one where one or more of the items bid does not carry its share of the cost of the work and the contractor's profit." Armaniaco v. Borough of Cresskill, 62 N.J.Super. 476, 482 (1960). One example is "a front-end loaded bid, [which] contains inflated bid items for work to be completed at the beginning of a contract and subsequent offsetting, understated bid items for work to be completed later in the contract." M.J. Paquet, Inc. v. N.J. Dep't of Transp., 171 N.J. 378, 399 (2002). A "front-loaded" unbalanced bid poses the

Another example of an unbalanced bid is not directly related to the timing of the work. Rather, it is one "based on nominal prices for some work and enhanced prices for other work." Frank Stamato & Co. v. City of New Brunswick, 20 N.J.Super. 340, 344 (App. Div. 1952). That is the kind of imbalanced bid implicated here. The bidder overprices items that could be used in greater quantities than estimated in the proposal, while underpricing those bid items that might be used in significantly lesser quantities. See Boenning v. Brick Twp. Mun. Utils. Auth., 150 N.J.Super. 32, 36-37 (App. Div.), certif. denied, 75 N.J. 537 (1977).

This kind of unbalanced bidding presents other risks to the public. In the case of indeterminate items that are subject to a public engineer's post-contract quantification, there is the risk of "collusion or fraud between the contractor and the engineer whose discretion will be invoked." Id. at 36. Even absent collusion, where the quantity of an item is uncertain and subject to significant swings, an extremely high unit price for that item, although offset by nominal bids for other items, could present an exceptionally large cost impact, if the highly priced item is required in great quantities. Armaniaco, supra, 62 N.J. Super. at 486-87. The risk is heightened if the contractor retains the discretion to allocate the unit-priced items. To guard against this risk, a municipality is empowered to reserve the right to reject unbalanced bids. Id. at 487.

We recognize that unbalanced bids are not per se illegal. See Riverland Constr. Co. v. Lombardo Contracting Co., 154 N.J.Super. 42, 45-48 (App. Div. 1977), aff'd o.b., 76 N.J. 522 (1978). A bid that front-loads costs may be justified by a bidder's need to cover mobilization costs and "general costs of getting the work started," which are not otherwise included in the bid. Armaniaco, supra, 62 N.J. Super. at 482. A bidder may purposely propose nominal or below-market prices because of a desire to secure a foothold in a market and underbid its competition. Riverland, supra, 154 N.J. Super. at 47.

Nonetheless, an unbalanced bid may be problematic when: (a) nominal bids on some items are offset by excessive bids on others; (b) the unbalanced bid relates to fraud or collusion; or (c) the unbalanced bid undermines fair competition. "[T]he submission of unbalanced bids distorts the public bidding process and may make a mockery of fair competition between bidders." Paquet, supra, 171 N.J. at 400 (internal quotation marks and citation omitted). Although unbalanced bids are not per se illegal, a municipality may expressly prohibit them. As we stated, "[U]nbalanced bids are generally allowed absent a specific prohibition in the public entity's bid specifications or proposal." M.J. Paquet, Inc. v. N.J. Dep't of Transp., 335 N.J.Super. 130, 139 (App. Div. 2000), aff'd in part and rev'd in part on other grounds, 171 N.J. 378 (2002); see also Armaniaco, supra, 62 N.J. Super. at 487 (stating that a municipality could reserve the right to reject unbalanced bids to guard against the "catastrophe[e]" of greater than anticipated quantities of a high unit-priced item).

In Riverland, the specifications for a sewer construction contract included a "reservation ... that proposals may be rejected if the prices are obviously unbalanced." Riverland, supra, 154 N.J. Super. at 44 (emphasis added). The municipality rejected two low bidders on a contract exceeding $300,000 because the lowest bidder, Lombardo Contracting, bid one cent a cubic yard for fill; and the second lowest bidder, Riverland Construction, bid $1 a cubic yard for fill. "Since the exact amount of fill could not be ascertained in advance of the work, the township sought a unit price based on the engineer's estimate of a required quantity of 8,078 cubic yards." Id. at 45. The engineer estimated that a reasonable cost for fill was $5 per cubic yard.6 Ibid. The trial court affirmed the rejection of Lombardo, but ordered the award to Riverland.

We reversed and directed the award to Lombardo as the low bidder. We noted that the bid for fill was for one of thirty-eight items in the bidders' proposals, id. at 45, and consisted of "an item which [was] relatively minor in comparison with the total contract price of over $300,000." Id. at 46. We held that "a nominal bid under such circumstances is not inherently evil or destructive of fair and competitive bidding." Ibid. Rather, "[t]he pejorative connotation of the phrase `unbalanced bid' comes into play only when the nominal bid on one item is unbalanced because of an excessive bid on other items, or because of other elements pointing to fraud, collusion, unfair restriction of competition, or other substantial irregularity." Id. at 47.

Armaniaco involved a taxpayer's challenge to a contract award for construction of a municipal sewer. Armaniaco, supra, 62 N.J. Super. at 478. The taxpayer complained that the low bidder's bid was unbalanced, contrary to a specification that provided that "[a]ny bid which, in the opinion of the Engineer, is obviously unbalanced, may be rejected." Id. at 479. The plaintiff also complained that the municipality set a fixed price for rock excavation, rather than subject it to competitive bidding. Id. at 480.

The successful bidder, D. Stamato & Co. (Stamato) submitted nominal bids for two items — timber sheeting left in place, and well-pointing. It was acknowledged that the actual unit costs were substantial, and Stamato's price was nominal. Id. at 479-80. Nonetheless, we found no basis to invalidate the bid as unbalanced, on those grounds, as there concededly was no evidence of fraud or collusion, or proof of other substantial irregularity. Id. at 484. In reaching that conclusion, we relied on a similar finding in Frank Stamato & Co. Id. at 482-84.

However, in Armaniaco, we held that the municipality was prohibited from setting a unit price for rock excavation in a municipal sewer. Id. at 485-86. We recognized that the amount of rock excavation was indeterminate, and the municipality was concerned that unusually high unit bids posed a financial risk to the municipality if greater than expected excavation was required. Id. at 484. We held that the municipality could set a maximum price for the unit. Id. at 487. Alternatively, "it could have reserved, as it did herein, the right to reject unbalanced bids. The rejection of a bid with an extremely high unit rock excavation price would have precluded the feared evil." Ibid.

Applying these principles, we agree with Judge Friscia's finding that the board's rejection of Montana's bid was not arbitrary, capricious, or unreasonable. The board specified in express terms that unbalanced and penny bids would be cause for disqualification. Especially in light of the board's rejection of the initial round of bids, which included numerous one-cent bids, there was no uncertainty as to the specification's meaning.

We find unpersuasive Montana's argument that the bid form specification — "unbalanced bids (penny bids) will result in disqualification" — was in some way ambiguous, because the bid specification issued before the first round of rejected bids stated, less definitively, the proposal "may be rejected" if "[t]he bid is inappropriately unbalanced." We consider the specification's plain language. Jen Elec., Inc. v. Cnty. of Essex, 197 N.J. 627, 641 (2009). We presume that the subsequent and more specific language governed. See Rosenberg v. D. Kaltman & Co., 28 N.J.Super. 459, 463-64 (Ch. Div. 1953) (stating that subsequent contract language supersedes prior inconsistent contract language); see also Burley v. Prudential Ins. Co., 251 N.J.Super. 493, 500 (App. Div. 1991) ("Where two clauses in a contract clearly conflict, the more specific provision ... usually controls over the more general."). We also consider the goals the drafter was striving to attain, as expressed in the board's resolution rejecting all bids in the initial round after accepting Carroll's recommendation that the contract be "rebid excluding penny bids." "The polestar of construction is the intention of the parties as revealed by the language used, taken as an entirety; and, in the quest for the intention, the situation of the parties, the attendant circumstances, and the objects they were thereby striving to attain are necessarily to be regarded." Atl. N. Airlines v. Schwimmer, 12 N.J. 293, 301 (1953).

Also lacking merit is Montana's contention that the bid form specification should be read literally, to bar only bids of one cent. "Literalism must give way to context." Borough of Princeton v. Bd. of Chosen Freeholders, 333 N.J.Super. 310, 325 (App. Div. 2000), aff'd, 169 N.J. 135 (2001). Carroll asserted that the term "penny bid" was a well-known term of art in the industry to encompass nominal bids. See Restatement (Second) of Contracts § 202(3)(b) (1981) ("technical terms and words of art are given their technical meaning when used in a transaction within their technical field"). Carroll's interpretation is consistent with established precedent. See Riverland, supra, 154 N.J. Super. at 46 (equating "penny bid" with "nominal bid"); Boenning, supra, 150 N.J. Super. at 33 (stating that "`pennying,' ... is, bidding nominal sums for certain items in public (and private) construction contracts"). We need not demarcate the level at which a price exceeds a "penny bid" or nominal bid, to hold that the board did not abuse its discretion in finding that one-dollar bids for every equipment item in Montana's bid violated the prohibition on penny bids.

We also reject Montana's argument that the board's award to Creamer demonstrates that dollar bids, as opposed to one-cent bids, were not intended to be disqualifying. We recognize that the township's subsequent actions may be considered in interpreting the specification. In interpreting a contract, a court may resort to several "interpretive devices" including "consideration of the particular contractual provision, an overview of all the terms, the circumstances leading up to the formation of the contract, custom, usage, and the interpretation placed on the disputed provision by the parties' conduct." Kearny PBA Local # 21 v. Town of Kearny, 81 N.J. 208, 221 (1979).

However, the township's award to Creamer does not clearly reflect a contrary interpretation. Creamer's bid included only two one-dollar bids — for a trench-box that arguably has no significant marginal cost to the contractor, and the general foreman, whom Creamer asserted was considered part of overhead. In any event, the township's award is not dispositive of the specification's meaning, in view of the other extrinsic aids to interpretation. "Several of these [interpretive] tools may be available in any given situation — some leading to conflicting results. But the weighing and consideration in the last analysis should lead to what is considered to be the parties' understanding. Individual interpretative rules should be subordinated to that goal." Id. at 221-22.

Finally, this case presents a different situation than presented in cases like Riverland, Armaniaco, or Frank Stamato & Co., in which allegedly unbalanced bids were not deemed non-responsive. The township's prohibition of an unbalanced bid, including penny bids, is more definitive than the prohibitions in those other cases. The township expressly determined that both unbalanced bids and penny bids would be disqualifying. By contrast, the specifications in the three cases stated that "obviously unbalanced bids" "may be rejected." Riverland, supra, 154 N.J. Super. at 44; Armaniaco, supra, 62 N.J. Super. at 479; and Frank Stamato & Co., supra, 20 N.J. Super. at 342. We held, "This is not a prohibition against unbalanced bids." Frank Stamato & Co., supra, 20 N.J. Super. at 344.

Also, the imbalance in Montana's bid was extreme; it involved nominal bids for every equipment category and two of the five labor categories, and above-market rates for two labor categories. By contrast, in Riverland, apparently only one category pertaining to a relatively minor item, involved a nominal bid. Riverland, supra, 154 N.J. Super. at 45-46. In Armaniaco, nominal bids were submitted only for two unit prices. Armaniaco, supra, 62 N.J. Super. at 479-80. Neither case apparently involved exceptionally high unit prices for other items.

The risk of unexpected costs to the municipality is more akin to the risk of an exceptionally high unit cost for rock excavation described in Armaniaco. We stated approvingly that a prohibition of unbalanced bids could be utilized to invalidate such a bid. Likewise, Lyndhurst was authorized to rely upon its specification to reject Montana's bid, which included $200 per hour labor rates for operators and drivers. The mix of equipment and labor would presumably depend on the needs of the job. Montana's bid posed a risk that Montana could distort its deployment of equipment and labor, to increase utilization of the high-priced labor categories, and increase costs to the municipality.

In sum, we find no basis to disturb the trial court's order dismissing Montana's complaint. The board's rejection of

Montana's bid was not arbitrary, capricious, or unreasonable. Consequently, Montana had no standing to challenge the award to Creamer. See William A. Carey & Co., supra, 37 N.J. Super. at 169. Therefore, we need not reach whether Creamer's inclusion of nominal bids, although to a lesser extent than Montana, rendered its bid imbalanced as well.

Affirmed.