Court affirms watchdog’s view that Hudson County prison services contract broke the law

In a decision that underscores the enduring tension between bureaucratic expediency and the letter of the law, a state appellate court has ruled that Hudson County acted illegally in awarding a $13.5 million contract for services at its correctional facility.

The unanimous ruling, delivered Monday by a three-judge panel, affirmed the authority of the Office of the State Comptroller and painted a picture of a county government that repeatedly chose to operate in the shadows rather than under the public lamp.

The case centered on the county’s procurement of prison services, a process that by statute must be open, competitive, and subject to state review.

The court found Hudson County did none of these things.

Instead, it invited a handful of preselected firms to apply, entered into private negotiations, and only submitted the proposed contract to the comptroller’s office for review two months after it had already received proposals—a direct contravention of the rule requiring such submission at least 30 days before procurement begins.

When the comptroller’s office directed the county to halt, the county proceeded to award the contract anyway, forcing the state agency to sue to enforce its own directives.

The ruling noted this was not an isolated incident but a practiced habit.

The county used the same circumscribed process in 2018 for a healthcare contract at the jail, renewing it annually without ever advertising for competitors, resulting in over $39.5 million in expenditures over five years.

In the present case, the court dismissed the county’s attempt to classify the multimillion-dollar services contract under a “professional services” exception designed for narrow, unique expertise, stating plainly the exception did not apply.

Acting State Comptroller Kevin Walsh characterized the decision as a affirmation of fundamental protections for taxpayers and essential safeguards against favoritism and the misuse of public funds.

“The Appellate Division’s decision affirms OSC’s authority to ensure major public contracts are handled fairly, openly, and in compliance with the law,” said Walsh. “These are fundamental protections for taxpayers and essential safeguards against favoritism, cronyism, and misuse of public funds.”

The court’s order is unambiguous: Hudson County must now comply fully with the comptroller’s original directives.

The ruling serves as a pointed reminder that the mechanisms of oversight, often perceived as cumbersome, are in fact the bulwarks against a quieter, more expensive form of governance conducted behind closed doors.

The public treasury, the court suggests, is not a private purse.