The opinion of the Court was delivered by
Under the Local Public Contracts Law (LPCL), N.J.S.A 40A:11-1 to -49, local public entities must submit any proposed purchase of goods or services in excess of $7500 to public advertisement and bidding.
See N.J.SA.
40A11-3, -4. The LPCL provides a number of exemptions from the bidding requirement.
See
N.J.S.A 40A11-5.
N.J.S.A
40A-11-5(1)(s) provides an exemption from the public bidding requirement for “[t]he marketing of recyclable materials recovered through a recycling program____” In a reported decision, the Appellate Division reversed a trial court’s ruling that invalidated a five-year contract, which included the curbside collection and marketing of recyclable materials in Middlesex County, between defendants Middlesex County Improvement Authority (MCIA) and Waste Management of North Jersey, Inc. (WMNJ), on the ground that the curbside collection aspect of the contract had not been publicly bid contrary to the LPCL.
See
291
N.J.Super.
283, 287, 289-95,
I
The essential facts are undisputed. Pursuant to the Solid Waste Management Act (Act), N.J.S.A 13:1E-1 to -207, each county in New Jersey and the Hackensack Meadowlands District is required to implement a solid waste management plan regulating the disposal of all solid waste generated within its borders. See N.J.S.A 13:1E-19 to -23. A 1987 amendment to the Act, known as the New Jersey Statewide Mandatory Source Separation and Recycling Act (Recycling Act), L. 1987, c. 102 (codified at N.J.S.A 13:1E-99.11 to -.32), requires that every county’s solid waste management plan must include a recycling component. See N.J.S.A 13:1E-99.13. Initially, the Legislature set the mandatory recycling goal at twenty-five percent of the total waste stream generated. L. 1987, c. 102, § 3. In 1992, it increased that goal to require by December 31, 1995, at least sixty percent recycling. L. 1992, c. 167, § 1 (codified at N.J.S.A 13:1E-99.13).
Pursuant to that legislative requirement, the Middlesex County Board of Chosen Freeholders amended the recycling plan of Middlesex County (County) on June 2, 1994, to achieve the sixty percent goal within the specified time period. The amended plan, approved by the DEP on October 3, 1994, required that a private contractor be chosen to implement the recycling program on behalf of all municipalities electing to participate, and designated MCIA as the local agency responsible for the program’s implementation.
On October 14, 1994, MCIA. publicly issued a Request for Qualifications (RFQ) for the “Collection and Marketing of Source-Separated Recyclable Materials, Including the Processing and Transfer Services Necessary for such Marketing.” Critical to the issue requiring resolution in this appeal, the RFQ specified that
. Additionally, the RFQ stated MCIA’s preference to select two contractors to service the participating municipalities in the County: one contractor for the northern and one contractor for the southern sections of the County. However, it provided that one contractor could be selected for the entire County if the contractor could demonstrate that it was capable of servicing the entire County efficiently and at a lower cost.
MCIA received responses from ten companies, six of which met its qualifications. Plaintiff National Waste Recycling, Inc. (National) and Defendant WMNJ were among those found to be qualified. On November 30, 1994, MCIA issued a Request for Proposals (RFP) to the six qualified companies. Five of those companies, including National and WMNJ, submitted proposals. National submitted a proposal to service the southern portion of the County; WMNJ submitted a proposal to provide services for the entire County or any portion thereof.
Pursuant to the RFP, MCIA conducted a preliminary review and evaluation of the proposals, ranking National and WMNJ highest after considering the cost proposals, technical proposals, contractual proposals and the financial condition of each company. MCIA then entered into negotiations with both companies. MCIA representatives met separately with National and WMNJ to negotiate terms, exploring each candidate’s willingness to make price concessions. During the negotiation process, each candidate was apprised of the price terms proposed by the other. One major concession that MCIA obtained from both National and WMNJ
On February 8, 1995, MCIA awarded the five-year $22,000,000 contract to WMNJ based on the recommendation contained in a written evaluation of the two proposals. The evaluation was prepared by a Project Team that included a consulting engineer, special legal counsel and a financial advisor. MCIA’s executive director certified that its decision was premised on the fact that WMNJ’s final proposal for the entire County represented the lowest five-year cost to MCIA. WMNJ’s contract price for the entire County was lower by $259,520 than the aggregate cost the County would incur if the MCIA awarded National the contract for the southern section of the County and WMNJ had been selected to provide services for the northern section of the County. Another factor that tipped the balance in favor of WMNJ was that, despite repeated requests by MCIA, National had failed to furnish an audited financial statement, which was one of the conditions under which MCIA had agreed to qualify National. The negotiation process itself resulted in a total savings to the County of approximately $5,500,000.
On February 21,1995, plaintiff National filed suit against defendants MCIA and WMNJ, seeking a temporary injunction and invalidation of the contract. John Grywalski, a Middlesex County resident, joined National as a plaintiff. Plaintiffs’ amended complaint asserted three separate challenges to the validity of the contract. This appeal focuses on the claim that the contract was invalid because it had been awarded without public bidding of the curbside collection portion of the contract, in violation of the LPCL. See N.J.S.A 40A:11-3, -4.
Defendants moved for summary judgment, arguing that plaintiffs lacked standing and that their claims lacked merit as a matter of law. Concerning the standing issue, defendants asserted that New Jersey law estops a parly from challenging the validity of the process used to award a contract when that party had participated without complaint in that very process until a decision contrary to
Any purchase, contract or agreement of the character described in [section 4 of the LPCL] of the act may be made, negotiated or awarded by the governing body without public advertising for bids and bidding therefor if:
(1) The subject matter thereof consists of:
(s) The marketing of recyclable materials recovered through a recycling program or the marketing of any product intentionally produced or derived from solid waste received at a resource recovery facility or recovered through a resource recovery program, including, but not limited to, refuse-derived fuel, compost materials, methane gas, and other similar products.
[emphasis added.]
The trial court held that National was barred from contending that the contract required public bidding because it had actively participated in the procurement process. However, the trial court found that, although it was troubled by the facts and circumstances surrounding Grywalski’s participation in the lawsuit, Gry-walski had standing based on his status as a taxpayer and “potential user of this county-wide recycling program.”
Concerning the merits of plaintiffs’ claim, the trial court stated that “in matters of discretion courts must give very respectable deference to the decision and the judgments of [public] authorities.” However, it found that that principle was outweighed by the strong public policy favoring public bidding and the corollary requirement that “exceptions to the bidding statute must be interpreted narrowly.” The trial court concluded that the curbside collection obligation under the contract did not fit within the
N.J.S.A
40A:11-5(1)(s) bidding exception, construing the exception to refer only to the marketing of materials recovered from a
The exception applies to “the marketing of recyclable materials recovered through a recycling program.” ...
The exception distinguishes between marketing and recovery in its very terms. Any fair reading of that language ... indicates that it clearly contemplates recovery of recyclables through a recycling program, followed by marketing. It is the marketing phase of the operation which the statute says need not be bid.
The court found the contract void and ordered that it be set aside. The parties consented to a dismissal without prejudice of plaintiffs’ remaining claims. Defendants successfully moved for a stay pending appeal.
Defendants MCIA and WMNJ appealed the trial court’s judgment. While the appeal was pending, the Attorney General, acting on behalf of the Division of Solid Waste Management (DSWM) of the New Jersey DEP and the DLGS, the agencies respectively responsible for enforcing the solid waste laws, see N.J.S.A. 13:1E-9(a), and administering the LPCL, see N.J.S.A 40A:11-37, 40A:11-49, 52:27BB-6, 8, filed an amicus curiae brief concerning the interpretation of the bidding-requirement exception contained in N.J.S.A 40A:11-5(1)(s).
The Appellate Division affirmed the trial court’s holding that plaintiff Grywalski had satisfied the standing requirement. 291
N.J.Super.
at 287,
The Appellate Division construed the bidding exception statute on the basis of its plain meaning.
Id.
at 291,
The Appellate Division reasoned that a broad reading of the exception was appropriate because most of the exceptions in the
The court rejected the trial court’s narrow interpretation of subparagraph (s) because it determined that the policy considerations, such as prevention of corruption and excessive cost, that underlie the formal public bidding process were not implicated in the award of the contract to WMNJ. The court noted that the MCIA had used a competitive, negotiated process, with no evidence of favoritism, partiality or corruption.
Id.
at 294,
Finally, the Appellate Division held that a joint advisory opinion letter issued by the DSWM and the DLGS that had concluded that N.J.S.A 40A:11-5(1)(s) applied only to the sale of recyclable materials was not binding on the Appellate Division because the letter contained only “the conclusions of law of a state agency.” Ibid.
National did not seek review of the Appellate Division’s decision. On July 8, 1996, intervenors, represented by the Attorney General, moved for leave to intervene for the purpose of seeking certification. The Court granted intervenors’ motion and subsequent petition for certification. Neither party appealed the standing issue.
II
The LPCL requires public bidding for all municipal and county contracts exceeding $7500.
See N.J.S.A.
40A:11-3, -4;
Meadowbrook Carting Co. v. Borough of Island Heights,
138
N.J.
307, 313,
Public bidding statutes exist for the benefit of taxpayers, not bidders, and should be construed with sole reference to the public good.
See N.E.R.I., supra,
147
N.J.
at 236,
Municipal garbage collection contracts are subject to the LPCL public-bidding requirement.
See Meadowbrook Carting, supra,
138
N.J.
at 310,
In 1989, the State Commission of Investigation issued a second report, concluding that the regulation process had failed to encourage competition. 1989 Commission Report,
supra,
at 1, 33-50. The report recommended that the BPU regulation of haulers’ rates be abolished and that the State should instead concentrate its efforts on encouraging competition through “eliminating unsavory elements from the industry.”
Id
at 2. It also recommended that an independent Solid Waste Authority be created to “sub-sum[e] the resources and remaining authority of the BPU and focus ... its attention on monitoring and stimulating competition among haulers.”
Ibid.
Thereafter, the Legislature accepted those recommendations and enacted the Solid Waste Collection Regulatory Reform Act (Regulatory Reform Act),
L.
1991, c. 381
In April 1987, the Legislature enacted the Recycling Act,
supra,
“the most comprehensive mandatory recycling program in the nation.” Anthony T. Brollas, Jr.,
The New Jersey Statewide Mandatory Source Separation and Recycling Act: The Nation’s First Comprehensive Statewide Mandatory Recycling Program,
12
Seton Hall Legis.J.
271, 272 (1989). The Act was part of a systematic attempt to improve the prior “crisis” situation caused by inadequate landfill space and resulted in the establishment of a system of waste management where “waste is disposed of efficiently and with a minimal negative impact on the environment.”
Atlantic Coast Demolition & Recycling, Inc. v. Board of Chosen Freeholders,
931
F.Supp.
341, 346 (D.N.J.1996),
rev’d on other grounds
Concurrently with its passage of the Recycling Act, the Legislature amended the LPCL by adding, among other provisions, the exception set forth at N.J.S.A 40A:11-5(1)(s). See L. 1987, c. 102, § 32. The Legislature also inserted the following definition of “marketing” in the LPCL’s definition section:
(13) “Marketing” means the marketing of designated recyclable materials source separated in a municipality which entails a marketing cost less than the cost of transporting the recyclable materials to solid waste facilities and disposing of the materials as municipal solid waste at the facility utilized by the municipality.
[L. 1987, c. 102, § 30(13) (codified at N.J.S.A. 40A:11-2(13)).]
The question the Court must resolve is whether the exception in subparagraph (s) should be construed to apply to the curbside-collection component of a county’s integrated recycling contract, or be limited to the post-collection sale of collected and sorted materials to an end-user.
When construing a statute, courts initially consider the statute’s plain meaning.
State v. Szemple,
135
N.J.
406, 421,
“When a statute is ambiguous, the Court must construe the statute in a way that will best effectuate the Legislature’s intent.”
Id
at 422,
The Legislature ... declares that it is in the public interest to mandate the source separation of marketable waste materials on a Statewide basis so that reusable materials may be returned to the economic mainstream in the form of raw materials or products rather than be disposed of at the State’s overburdened landfills, and further declares that the recycling of marketable materials by every municipality in this State, and the development of public and private sector recycling activities on an orderly and incremental basis, will further demonstrate the State’s long-term commitment to an effective and coherent solid waste management strategy.
The lower courts attempted to effectuate the Legislature’s expressed goals in their respective construction of the bidding exception for the marketing of recyclable materials. The trial court considered of paramount importance the long-standing policy requiring public bidding. The Appellate Division, on the other hand, emphasized the overall goal of the Recycling Act. Because it determined that an integrated contract was more practical in view of the potential long-term risk of a negative or non-existing market for recovered recyclable materials, the Appellate Division concluded that its interpretation better effectuated the legislative intent.
Given the contradictory interpretations of the lower courts, we resort to other sources to inform our conclusion, such as legislative history, legal commentary, agency interpretation and prior precedent, if available. Extrinsic aids may be used to interpret language beyond that expressly written in the statute.
See Szemple, supra,
135
N.J.
at 422,
The legislative history does not explicitly indicate the Legislature’s intended meaning concerning the term “marketing” contained in subparagraph (s). When originally proposed in 1986, the sponsors of the proposed legislation included as part of the
b. Any contracting unit may, by resolution of its governing body, authorize the sale or disposition of recyclable materials recovered through a recycling program undertaken by the contracting unit. The sale of these recyclable materials, by contract or agreement, may be entered into or negotiated without public bidding by that contracting unit.
Intervenors observe that that proposed amendment suggests that the Legislature was concerned with the final disposition of recovered recyclables, not the initial collection phase.
Shortly before the final passage of Senate Committee Substitute Senate Bill No. 1478 in April 1987, the Senate Revenue, Finance and Appropriations Committee removed the sale of personal property amendment from the bill, substituting for it the definition of marketing contained in N.J.S.A 40A11-2(13), and adding the exception for marketing of recycled goods to N.J.S.A 40A11-5(1)(s), which initially provided: “The marketing of recyclable materials recovered through a recycling program.” L. 1987, c. 102, § 32. The Senate Committee Statement accompanying the amendments stated that its purpose in amending that section was to “[cjlarify the definitions and provisions of the local contracts law regarding contracts for recyclable materials.” Senate Revenue, Finance and Appropriations Committee, Statement to Assembly Committee Substitute for Senate No. 1478 and Assembly No. 1781, at 2 (Feb. 5, 1987).
The Legislature has considered the subparagraph (s) exception several times since its original enactment. In 1989, the Legislature expanded the exception to include the language contained in the current version:
(s) The marketing of recyclable materials recovered through a recycling program, or the marketing of any product intentionally produced or derived from solid waste received at a resource recovery facility or recovered through a resourcerecovery program, including, but not limited to, refuse-derived fuel, compost materials, methane gas, and other similar products.
[L. 1989, c. 92 (emphasis added).]
The statements accompanying the assembly bill that was eventually enacted in chapter 92 do not clarify the Legislature’s intent regarding the scope of the exception in subparagraph (s). See Senate Energy and Environment Committee, Statement to Assembly Committee Substitute for Assembly Bill No. 464, at 1 (Apr. 27, 1989); Assembly Solid Waste Management Committee, Statement to Assembly Committee Substitute for Assembly Bill No. at 1 (Sept. 16, 1988).
In May 1992, a bill amending the definition of marketing in the LPCL to a definition virtually identical to the one contained in the Recycling Act was introduced in the Senate. See Senate Bill No. 834, § 1. Subsequently, that amendment was removed from the enacted bill. See L. 1992, c. 98. Neither the Assembly nor the Senate committee statements explain why that amendment was ultimately deleted. The bill, which was enacted into law, included an amendment to the LPCL allowing local contracting units to enter into contracts for the collection and disposition of recyclable materials for periods of up to five years, and added the term “disposition” to the definitional section of the LPCL. L. 1992, c. 98, § 1. “Disposition” was defined as “the transportation, placement, reuse, sale, donation, transfer or temporary storage of recyclable materials for all possible uses except for disposal as municipal solid waste.” Ibid.
Finally, the Recycling Act was recently amended, authorizing any county, municipality, or authority to enter into a written cooperative agreement for the cooperative marketing of the recyclable materials designated in a district recycling plan.
L.
1995, c. 103. The amendment added to the LPCL’s definitional section a definition of “cooperative marketing,” defined as the “joint marketing ... of the source separated recyclable materials designated in a district recycling plan.”
N.J.S.A.
40A:11-2(18). Assembly and Senate committee statements concerning the enacted bill stated that “ ‘[c]ooperative marketing’ refers to the joint sale
Contemporary legal commentary reflects the general understanding that recovery and recycling are separate and distinct concepts. “Recovery is the process whereby recyclable materials are removed from the solid waste stream. In contrast, recycling is the actual process by which recovered materials are incorporated into new products.” Nicolas M. Kublicki, The Paper Triangle: National Forest Timber, Solid Waste Disposal and Recycling, 7 Tul Envtl. L.J. 1, 28 (1993); see also James T. O’Reilly, Recycling and Municipal Liability: Environmental Benefits and U.C.C. Risks, 23 Urb. Law. 97, 99 (1991) (“Recycling is a term of art in the solid waste industry. It refers to the total process of diverting a collected solid waste, separating it into usable materials, and processing those materials into a new finished product. No recycling occurs from mere collection alone.”). The application of those concepts to the statute suggests that “marketing of recyclable materials recovered through a recycling program” is not intended to refer to the recoveiy stage, which is the collection component of a recycling program.
Governmental agencies charged with the enforcement of legislation can provide additional guidance in the interpretation of
Please be advised that both State agencies believe that the [LPCL]’s competitive bidding exemption enacted along with the [Recycling Act] is not all inclusive. In our view the new exemption, N.J.S.A. 40A:11-5[ (1) ](s), is limited to the marketing of recyclables. Simply stated we believe the exemption only applies to the sale of recyclable materials.
The exemption does not apply to contracts for recycling processes, consultants, collection or supplies and equipment. Furthermore, public bidding may not be circumvented by combining a nonexempt item within an exempt marketing contract Such combination contracts continue to be subject to applicable bidding requirements ie. competitive bidding, informal quotes, extraordinary unspedfiable services ... and professional services.
[Letter from Maty T. Shiel, Deputy Director, Division of Solid Waste Management, and Barry Skokowski, Sr., Director, Division of Local Government Services, to Public Officials 1-2 (Apr.1988) (emphasis added) (Joint Advisory Opinion Letter).]
Where agency interpretation coincides with the original enactment of a regulatory statute that the agency is charged with enforcing, the case for deference to the agency is strong.
See, e.g., Newark Firemen’s Mut. Benevolent Ass’n v. Newark,
90
N.J.
44, 55,
Ill
We conclude that had the Legislature intended to exempt the curbside collection of solid waste for eventual recycling from the public-bidding requirement of the LPCL, it would have explicitly done so. To interpret consistently the related definitional sections of the LPCL and the Recycling Act is appropriate because they were enacted as part of the same legislation. The definition of “marketing” in the LPCL is virtually identical to that included in the Recycling Act, the only difference being that the Recycling Act refers to disposition and the LPCL refers to marketing. Both definitions appear to apply only to the post-collection aspect of a recycling contract, suggesting that the public-bidding exemption contained in the LPCL should be construed as referring only to those aspects of a recycling contract necessarily relating to the sale of recovered recyclable materials.
The legislative history supports that conclusion. Since 1989, the Legislature has considered N.J.S.A 40A:11-5(1) and changes concerning definitions applicable to recycling exceptions, declining on several occasions to change the definition section. Additionally, during the same time period, when enacting solid waste legislation the Legislature reiterated its longstanding concern about competition in the solid waste collection industry, emphasizing the continuing need for supervision of the industry because of the impact of anti-competitive forces. See N.J.S.A 48:13A-7.2.
Contrary to the Appellate Division’s conclusion, we find that the joint advisory opinion letter is entitled to substantial deference. The administrative agencies charged with the enforcement of the Recycling Act and the LPCL agreed that competitive bidding was required for the collection of goods that would eventually be recycled and marketed. That interpretation of the statute effectuates the Legislature’s intent in exempting from
In view of our determination that the procurement process engaged in by the County violated the LPCL, the Court must consider the disposition of MCIA’s five-year contract, which has effectively two-and-a-half years until its completion. We acknowledge, as did the Appellate Division, that the County engaged in a competitive negotiation process resulting in a substantial savings to the County. As noted, the difference in price between the two final proposals was approximately $260,000. We are impressed that the negotiation process was constructively and fairly conducted.
We recognize that it may be inequitable to require rebidding of the contract because of the relationship among the collection phase of the contract, WMNJ’s correlative obligations to market the recyclables and guarantee the County a base price for all recyclable material, and the fluctuation in the market value of recyclables. Because the MCIA engaged in extended negotiations for the County, we find the inference unavoidable that the price negotiated for the collection phase was influenced by the guaranteed price to be paid to the County as well as the uncertainty of the compensation to be realized by WMNJ from the recycling phase, and the five-year contract term that afforded WMNJ some protection against short-term market volatility. Although ordinarily we would order the collection phase of the contract to be rebid, see
Meadowbrook Carting, supra,
138
N.J.
at 325-26,
Accordingly, the contract may remain in effect until its termination date. Any subsequent contracts for the collection of recyclables must be procured in compliance with the LPCL bidding requirement.
IV
We reverse the judgment of the Appellate Division that exempted from public bidding the collection phase of the contract. We remand the matter to the Law Division for entry of a judgment consistent with this opinion.