Bid Protests in New Jersey
Bradley has been publishing an ongoing survey of state-level bid protest processes and procedures (see our posts on “Bid Protests in Georgia,” “Bid Protests in the District of Columbia,” “Bid Protests in New York,” “Bid Protests in Virginia,” “Bid Protests in Massachusetts,” and our “Update on Bid Protests in Alabama”). For the next state in this series, we focus on the bid protest procedures in New Jersey.
What Rules Apply?
The Division of Purchase and Property (DPP) of the New Jersey Department of the Treasury provides centralized procurement and related services to agencies of the executive branch of state government.
Procurements by local boards of education under the Public School Contracts Law, N.J.S.A 18A:18A-1 et seq., procurements by the New Jersey Turnpike Authority (Ch. 9 of Title 19 of the New Jersey Administrative Code), and procurements by public municipalities, counties, and local government/authorities are outside of the authority of the DPP.
N.J. Admin. Code § 17:12-3 governs bid protest procedures for procurements that fall under the authority of the DPP.
Who May Protest?
For pre-award protests, a vendor that intends to submit a proposal in response to an advertised request for proposals and that objects to a term or specification therein may submit a written protest to the Director of Purchasing. N.J.A.C. 17:12-3.2(a).
For post-award protests, a bidder who has submitted a proposal in response to a request for proposals may submit a written protest to the Director of Purchasing concerning (1) the rejection of its proposal, when such objection is based upon the bidder’s failure to comply with N.J.A.C. 12.12-2.2, (2) the notice of award of a contract, or (3) cancellation of an RFP after the opening of proposals. N.J.A.C. 17:12-3.3.
When Must a Protest Be Filed?
Pre-award protests shall be submitted to the Director of Purchasing only after the DPP has formally responded to questions posed during the request for proposals question and answer period. N.J.A.C. 17:12-3.2(b). The Director of purchasing may disregard any pre-award protest filed fewer than seven business days prior to the scheduled deadline for proposal submission. N.J.A.C. 17:12-3.2(b)(3).
Post-award protests must be filed within 10 business days following the bidder’s receipt of written notification that its proposal is non-responsive or of notice of award, as applicable, or prior to the deadline specified in the DPP’s notice of intent to award communication to the bidder, whichever date is earlier. N.J.A.C. 17:12-3.3(b).
What Must the Protest Include?
Pre-award protests must contain the following: (1) identification of the solicitation number; (2) the terms/specifications at issue and the specific grounds for challenging the cited terms/specifications, including all argument materials, or other documentation that may support the protester’s position; and (3) a statement as to whether the protester requests an opportunity for an in-person presentation and the reason(s) for the request. N.J.A.C. 17:12-3.2(b)1.
Post-award protests must contain the following: (1) identification of the solicitation number; (2) the specific grounds for challenging the proposal rejection, the notice of intent to award, or the cancelation, including all arguments, materials, and/or other documentation that may support the protester’s position; and (3) a statement as to whether the protester requests an opportunity for an in-person presentation and the reason(s) for the request. N.J.A.C. 17:12-3.3(b)1.
What Are the Discovery Procedures?
The Director is entitled to request, receive, and review copies of all records and documents relevant to the issues and arguments set forth in the protest.
Upon receipt of the Director’s request, the bidder shall promptly provide the requested records and documents free of charge in the time, place, and manner specified by the Director.
If the protesting bidder fails to comply with the request, such failure may constitute a reasonable basis for the Director to resolve the protest against the protester.
The Director may also consider relevant information requested and received from other parties. N.J.A.C. 17:12-3.4.
Will a Hearing Be Held?
For both pre- and post-award protests, the Director, or the Director’s designee from within or outside the Division may perform a review of the written record or conduct an in-person presentation. In the case of a review or an in-person presentation being handled by a hearing officer designee from outside the DPP, the determination of such designee shall be in the form of a report to the Director, which shall be advisory in nature and not binding on the Director.
All parties shall receive a copy of the hearing officer’s report and shall have 10 business days to provide written comments or exceptions to the Director. After the 10-business-day period for comments/exceptions, the Director shall make a final written decision on the matter.
In the case of a review or in-person presentation being handled by a designee from within the Division, the determination shall be issued by the Director, or the Director’s designee, and such determination shall be a final agency decision. See N.J.A.C. 17:12-3.2(f); N.J.A.C. 17:12-3.3(f).
What Are the Appeal Procedures?
Final agency decisions on both pre- and post-award protests are appealable to the Superior Court Appellate Division. N.J.A.C. 17:12-3.1(b).
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Wisconsin Appellate Court Interprets Construction Defect Exclusion and Fungi Exclusion
Cincinnati Insurance Company v. James Ropicky, et al., No. 2023AP588, 2024 WL 5220615 (Wis. Ct. App. Dec. 26, 2024)
On December 26, 2024, the Court of Appeals of Wisconsin issued is decision in Cincinnati Insurance Company v. James Ropicky, et al., No. 2023AP588, 2024 WL 5220615 (Wis. Ct. App. Dec. 26, 2024), addressing whether an ensuing cause of loss exception to a Construction Defect Exclusion, Fungi Exclusion, and Fungi Additional Coverage endorsement contained in a homeowner’s insurance policy issued by Cincinnati to its insureds precluded coverage for damage sustained by the insureds’ home following a May 2018 rainstorm. A final publication decision is currently pending for this case.
Background Information
James Ropicky and Rebecca Leichtfuss (collectively “the insureds”) submitted a claim to their homeowner’s insurer, Cincinnati Insurance Company (“Cincinnati”), for alleged water and fungal damage that their home sustained as a result of a rainstorm that occurred on May 11, 2018. Based on Cincinnati’s investigation and the opinions rendered by its expert following his inspections of the insureds’ home, Cincinnati provided limited coverage for the insureds’ claim based on the contention that a majority of the damage was the result of “design or installation deficiencies” that had allowed storm water to enter the interior wall structure. Therefore, Cincinnati concluded the subject damage was either excluded under the policy’s Construction Defect Exclusion and Fungi Exclusion, or subject to the policy’s Fungi Additional Coverage endorsement. As a result, Cincinnati paid $10,000 under the policy’s fungi-related coverage (Fungi Additional Coverage endorsement) and $2,138.53 for other damages falling within the ensuing cause of loss exception to the Construction Defect Exclusion. Cincinnati denied coverage for costs associated with remedying and repairing the purported construction defects.
Eventually, Cincinnati filed a lawsuit against its insureds seeking declaratory judgement as to its coverage position. In response, Cincinnati’s insureds disputed Cincinnati’s coverage position and filed counterclaims against Cincinnati for breach of contract, declaratory judgment, and bad faith related to Cincinnati’s handling of their claim. The circuit court ultimately granted Cincinnati’s summary judgment motion as to coverage, agreeing that the Construction Defect and Fungi Exclusions contained in the applicable homeowner’s policy barred any additional coverage under the policy’s terms beyond that which Cincinnati had already paid with respect to the alleged May 2018 rainstorm damage. Further, because the circuit court ruled in Cincinnati’s favor and held that Cincinnati had not breached its contract with the insureds, the court dismissed, sua sponte, the insured’s bad faith claim as a matter of law. The insureds appealed the circuit court’s decision.
Decision and Analysis
On appeal, the Court of Appeals of Wisconsin concluded the ensuing cause of loss exception to the policy’s Construction Defect Exclusion reinstates coverage, and the policy’s Fungi Additional Coverage endorsement renders the Fungi Exclusion inapplicable. Thus, the appellate court reversed the circuit court’s decision, finding the circuit court erred in granting summary judgment in Cincinnati’s favor, and remanded the case for further proceedings.
First, the appellate court held that even assuming the Construction Defect Exclusion applies, the damage to the insureds’ home nevertheless constitutes an ensuing cause of loss under the policy’s ensuing cause of loss exception and the authority of Arnold v. Cincinnati Insurance Co., 2004 WI App 195, 276 Wis. 2d 762, 688 N.W.2d 707. Relying on Arnold as binding authority, the appellate court explained that an “ensuing loss” “is a loss that follows the excluded loss ‘as a chance, likely, or necessary consequence’ of that excluded loss[,]” and “in addition to being a loss that follows as a chance, likely, or necessary consequence of the excluded loss, an ensuing loss must result from a cause in addition to the excluded cause.” Id. at ¶¶27, 29 (emphasis added). The appellate court then proceeded to apply the following three-step framework adopted in Arnold to determine whether the ensuing cause of loss exception applies: (1) first identify the loss caused by the faulty workmanship that is excluded; (2) identify each ensuing loss, if any – that is, each loss that follows as a chance, likely, or necessary consequence from that excluded loss; and (3) for each ensuing loss determine whether it is an excepted or excluded loss under the policy. See id. at ¶34. Based on the appellate court’s application of this three-step framework, it concluded the rainwater at issue, i.e., the May 2018 rainstorm, was an ensuing cause of loss within the meaning of the applicable policy’s ensuing cause of loss exception to a Construction Defect Exclusion.
Second, the appellate court held that the policy’s Fungi Exclusion and its anti-concurrent cause of loss clause did not exclude coverage for the damage to the insureds’ home. Most significantly, in reaching this conclusion, the appellate court determined that the phrase “[t]his exclusion does not apply” in the Fungi Exclusion does not introduce an exception to the exclusion, but rather introduces two scenarios in which the Fungi Exclusion is never triggered in the first instance because its conditions for application are never satisfied. According to the appellate court, one of the circumstances enumerated in the Fungi Exclusion, wherein it states the exclusion “does not apply” “[t]o the extent coverage is provided for in Section I, A.5. Section I – Additional Coverage m. Fungi, Wet or Dry Rot, or Bacteria with respect to ‘physical loss’ caused by a Covered Cause of Loss other than fire or lightning,” rendered the exclusion inoperative with respect to the subject loss. Notably, the concurring opinion explains how the majority’s interpretation of the Fungi Exclusion’s “this exclusion does not apply” language appears to depart from prior case law, wherein Wisconsin courts have repeatedly concluded that this language creates an exception to an exclusion that reinstates coverage. See Neubauer, J. (concurring).
Third, the appellate court held the policy’s $10,000 limit of Fungi Additional Coverage applies to the portion of subject home’s damages that was at least partially caused by “fungi, wet or dry, or bacteria.” However, the $10,000 limit does not decrease or limit the coverage that was otherwise available for the home’s damages caused solely by rainwater.
Based on its interpretation of the policy provisions set forth above, the appellate court additionally held: (1) genuine questions of material fact exist at least as to whether “fungi, wet or dry rot, or bacteria” caused any of the damage to the insureds’ home, and if so, what portion of the damage is attributable to “fungi, wet or dry rot, or bacteria”; (2) only after properly apportioning any damage caused by “fungi, wet or dry rot, or bacteria” can Cincinnati determine the extent of coverage it is obligated to provide under the terms of the homeowner’s insurance policy; and (3) because issues of material fact remain as to the cost to repair the construction defects (not the ensuing loss), this issue remains to be addressed on remand. The appellate court also reinstated the insureds’ bad faith claim asserted against Cincinnati in the underlying action, which had been dismissed by the circuit court when granting summary judgment in Cincinnati’s favor.
EPA Proposes Updated General Clean Water Act NPDES and Construction Permits
Key Takeaways
What Happened? The U.S. Environmental Protection Agency (EPA) proposed the 2026 version of the National Pollutant Discharge Elimination System (NPDES) Multi-Sector General Permit (MSGP) for stormwater discharges associated with industrial activities. When finalized, this new permit will replace the current MSGP when it expires on February 28, 2026. In addition, EPA proposed a narrow modification to its 2022 Construction General Permit for Stormwater Discharges (CGP), to expand the list of areas eligible for coverage. EPA is currently soliciting public comment on all aspects of the proposed MSGP, as well as on the CGP modification.
Who Is Affected? In the short term, the 2026 MSGP will apply to industrial facilities from thirty different sectors where EPA is the NPDES permitting authority, including Massachusetts, New Hampshire, New Mexico, and the District of Columbia. In the long term, EPA’s proposed action will affect industrial facilities in states that model their NPDES stormwater general permits after EPA’s MSGP. Meanwhile, the CGP modification will affect construction activities in Lands of Exclusive Federal Jurisdiction.
Next Steps? Industrial facilities covered by the existing MSGP should consider how to engage in public comment by February 11, 2025, to ensure EPA adopts a reasonable final permit with the best information available and consistent with the law. Meanwhile, entities affected by the CGP should consider submitting comments by January 13, 2025. For more information, please contact the authors.
2026 MSGP
EPA released its proposed 2026 MSGP, which authorizes stormwater discharges associated with industrial activities in jurisdictions where EPA is the NPDES permitting authority, including Massachusetts, New Hampshire, New Mexico, and the District of Columbia. This newest version of EPA’s MSGP would take effect in February 2026, when the current 2021 MSGP expires. EPA is currently soliciting public comment on the proposed 2026 MSGP, with a comment deadline of February 11, 2025.
As with the current MSGP, the proposed coverage under the 2026 MSGP would be available in jurisdictions where EPA is the NPDES permitting authority for stormwater discharges from industrial facilities in thirty different sectors, including but not limited to: timber, chemicals, glass and cement, metals and mining, landfills, and transportation. While the proposed permit, once finalized, would immediately affect industrial facilities where EPA is the permitting authority, states implementing authorized NPDES programs could also choose to model their permits after EPA’s MSGP. This proposed permit could thus have significant short-term and long-term impacts on numerous industrial facilities.
Proposed Changes Compared to the 2021 MSGP
EPA proposed that the 2026 MSGP would differ from the current MSGP in several respects:
Considerations of Stormwater Control Measure Enhancements for Major Storms
The proposed 2026 MSGP would modify a number of considerations in the 2021 MSGP by, among other things, removing the word “temporarily” to indicate EPA’s view that “it is generally best practice to implement SCMs [stormwater control measures] on a more regular basis than just temporarily.”
The new permit also clarifies that, when evaluating whether the facility has previously experienced major storm events, the permittee must do so based on current conditions, defined as “100-year flood (the 1% -annual-chance flood) based on historical records;” and, when evaluating whether the facility may be exposed in the future to major storm and flood events, the permittee must do so based on best available data, defined as “the most current observed data and available forward-looking projections.”
The proposed 2026 MSGP also specifies that all stormwater control measures must be based on the best available data. EPA intends this requirement “to ensure stormwater control measures are resilient to withstand storms and properly manage stormwater through their lifespan to reduce pollutants in stormwater discharges.”
Water Quality-Based Effluent Limitations or Other Limitations The 2026 MSGP proposes to revise the provision on water quality-based effluent limitations to add more specific language on what discharges must not contain or result in, such as: observable deposits of floating solids, scum, sheen, or substances; an observable film or sheen upon or discoloration from oil and grease; or foam or substances that produce an observable change in color. EPA’s proposed revisions also struck the current MSGP’s vague requirement that each “discharge must be controlled as necessary to meet applicable water quality standards.” The agency likely proposed this change in anticipation of a ruling from the U.S. Supreme Court in City & County of San Francisco v. EPA, No. 23-753, a case in which the Court will decide whether EPA has the authority to impose permit requirements like the language EPA has dropped from the proposed 2026 MSGP.
Monitoring
The proposed 2026 MSGP would include a new provision requiring a majority of sectors to conduct “report-only” indicator analytical monitoring for Per- and Polyfluoroalkyl Substances (PFAS).
EPA is also proposing to shift certain sectors from “report-only” indicator monitoring to benchmark monitoring for pH, total suspended solids (TSS), and chemical oxygen demand (COD). The benchmark monitoring parameters would be based on indicator monitoring results collected under the 2021 MSGP.
The proposed 2026 MSGP sets new benchmark monitoring for ammonia, nitrate, and nitrite by operators in subsector I1.
EPA also proposes that several new subsectors conduct benchmark monitoring for various specific metals based on EPA’s industry analysis of pollutants that stem from common activities.
The 2026 MSGP further proposes a heightened monitoring schedule for benchmark monitoring that would require operators to conduct quarterly monitoring for the first three years of permit coverage (or a minimum of twelve quarters or monitoring periods of sampling). By comparison, the current MSGP calls for benchmark monitoring only in the first and fourth year of a permittee’s permit coverage.
Finally, the schedule for impaired waters monitoring would also change to mandatory quarterly monitoring for the entire five-year permit term, a departure from the current MSGP’s requirement to conduct impaired waters monitoring only in the first and fourth years of permit coverage.
Additional Implementation Measures (AIM)
The 2026 MSGP would add to current AIM Level 1 response requirements by requiring facilities to conduct an inspection to identify the cause of a benchmark exceedance.
EPA also proposes to require operators to obtain express EPA approval of a natural background exception before discontinuing compliance with AIM. Under the current a claimed natural background exception is “automatically in place and the operator [is] not required to wait for verification from EPA to discontinue [AIM] compliance.”
The 2026 MSGP would require operators to submit an AIM Triggering Event Report to EPA anytime a facility triggers AIM at any level.
Additionally, EPA proposes required corrective action equivalent to AIM Level 1 responses when facilities discharging into impaired waterbodies detect a pollutant causing an impairment.
Public Comment
EPA welcomes, and interested parties should consider submitting, public comments on any aspect of the proposed 2026 MSGP. Additionally, EPA is requesting specific feedback on the following issues:
A host of questions pertaining to 6PPD-quinone, including how to identify sources of 6PPD-quinone in stormwater discharges and the types of best management practices permittees might implement to reduce 6PPD-quinone in their discharges;
What methods to use for PFAS indicator monitoring;
Whether EPA should include benchmark monitoring for iron and magnesium;
Whether to require PFAS-related benchmark monitoring for some or all of the sectors identified for PFAS-indicator monitoring; and
Whether to require impaired waters monitoring throughout the entire permit term, and any alternative approaches.
CGP Modification
In parallel, on December 13, 2024, EPA proposed a narrow modification to the 2022 CGP, which covers stormwater discharges from regulated construction activities in areas where EPA is the permitting authority. If adopted, the proposed modification would take effect in early 2025. EPA is currently soliciting public comments on the proposed CGP modification, with a comment deadline of January 13, 2025.
The CGP modification aims to expand the list of areas eligible for coverage to include construction projects in Lands of Exclusive Federal Jurisdiction. As the 2022 CGP failed to clarify, this proposed modification would specifically provide eligibility for all Lands of Exclusive Federal Jurisdiction without disrupting permit coverage for ongoing construction activities. The proposed CGP modification also clarifies the requirements for projects discharging to receiving waters within the Lands of Exclusive Federal Jurisdiction. Operators of such projects would follow the same requirements as used in the CGP for discharges to sensitive waters.
Next Steps
EPA is currently soliciting public comments on both proposed permits. All comments for the MSGP should be submitted to EPA by February 11, 2025, while comments for the CGP should be submitted by January 13, 2025. While EPA has not yet scheduled any public hearings, it plans to host informational webinars on the 2026 MSGP. The agency’s timetable for acting on these permits may also change after the new Trump administration takes office. For instance, new EPA personnel may modify and re-propose a version of the 2026 MSGP that better reflects the new administration’s priorities. Ultimately, engaging in public comment is an important opportunity for regulated industries to provide information and recommendations to EPA and help shape their stormwater permit obligations in years to come.
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