ASSEMBLY HOUSING COMMITTEE

STATEMENT TO

ASSEMBLY, No. 18

STATE OF NEW JERSEY

DATED: NOVEMBER 7, 1996

      The Assembly Housing Committee reports favorably Assembly Bill No. 18.

      This bill would require private agency contracts for inspection or plan review services performed for a municipality pursuant to the "State Uniform Construction Code Act," P.L.1975, c.217 (C.52:27D-119 et seq.) to be subject to the procedures for contracts provided under the "Local Public Contracts Law," P.L.1971, c.198 (C.40A:11-1 et seq.). In addition, the bill provides that fees charged by a private inspection agency may not exceed the fee amounts permited to be charged by DCA when it performs code inspections.

      P.L.1993, c.47 was enacted by the Legislature to spur bidding competition and thus give local governments more flexibility in the awarding of contracts for these types of services by removing the requirement that fees charged by private agencies hired by municipalities be identical to the fee schedule of the Department of Community Affairs (DCA) for private agency inspection performed for the DCA. The law was changed to allow the fees to be less than those charged by DCA. The Commissioner of Community Affairs thereafter promulgated rules which require, among other things, a new system of bidding requiring sealed bids. Department representatives have stated their concerns about fairness and quality of inspection work when the fees were deregulated.

      This bill confirms that it was not the Legislature's intent through its enactment of P.L.1993, c.47 that the municipalities should return to the sealed bid system of bidding which existed in the early 1980's. Subjecting private agency inspection contracts to the "Local Public Contracts Law" should help address the department's past concerns and at the same time provide a more equitable way of contracting for this type of work.