ASSEMBLY, No. 1772

STATE OF NEW JERSEY

INTRODUCED MARCH 25, 1996

By Assemblyman BATEMAN

An Act concerning the awarding of certain public contracts and amending various parts of the statutory law.

    Be It Enacted by the Senate and General Assembly of the State of New Jersey:

    1. N.J.S.18A:18A-3 is amended to read as follows:

    18A:18A-3. Purchases, contracts and agreements not requiring advertising. a. Any purchase, contract or agreement for the performance of any work or the furnishing or hiring of materials or supplies, the cost or price of which, together with any other sums expended or foreseeably to be expended for the performance of any work or services in connection with the same project or the furnishing of similar materials or supplies during the same fiscal year paid with or out of school funds, does not exceed the total sum of [$7,500.00] $25,000. or the amount determined pursuant to subsection b. of this section, in the fiscal year or, in the case of purchases that are not annually recurring, in a period of one year may be made, negotiated and awarded by a contracting agent when so authorized by resolution of the board of education without public advertising for bids and bidding therefor.

    b. Commencing January 1, [1983] 1997 and every two years thereafter, the Governor, in consultation with the Department of Treasury, shall adjust the threshold amount set forth in subsection a. of this section in direct proportion to the rise or fall of the consumer price index for all urban consumers in the New York City and the Philadelphia areas as reported by the United States Department of Labor. The Governor shall notify all local school districts of the adjustment. The adjustment shall become effective on July 1 of the year in which it is reported.

(cf: P.L.1983, c.171, s.1)

    2. Section 3 of P.L.1986, c.43 (C.18A:64-54) is amended to read as follows:

    3. a. Any purchase, contract or agreement for the performance of any work or the furnishing or hiring of materials or supplies, the cost or price of which, together with any sums expended for the performance of any work or services in connection with the same project or the furnishing of similar materials or supplies during the same fiscal year, paid with or out of college funds, does not exceed the total sum of [$7,500.00] $25,000 or, commencing January 1, [1985] 1997, the amount determined pursuant to subsection b. of this section, in any fiscal year may be made, negotiated and awarded by a contracting agent, when so authorized by resolution of the board of trustees of the State college without public advertising for bids and bidding therefor.

    b. Commencing January 1, [1985] 1997 and every two years thereafter, the Governor, in consultation with the Department of the Treasury, shall adjust the threshold amount set forth in subsection a. of this section in direct proportion to the rise or fall of the Consumer Price Index for all urban consumers in the New York and Northeastern New Jersey and the Philadelphia areas, as reported by the United States Department of Labor. The adjustment shall become effective on July 1 of the year in which it is reported.

    c. Any purchase, contract or agreement made pursuant to this section may be awarded for a period of 12 consecutive months, notwithstanding that the 12-month period does not coincide with the fiscal year.

(cf: P.L.1994, c.48, s.110)

    3. Section 3 of P.L.1982, c.189 (C.18A:64A-25.3) is amended to read as follows:

    3. a. Any purchase, contract or agreement for the performance of any work or the furnishing or hiring of materials or supplies, the cost or price of which, together with any sums expended for the performance of any work or services in connection with the same project or the furnishing of similar materials or supplies during the same fiscal year, paid with or out of college funds, does not exceed the total sum of [$7,500.00] $25,000 or, commencing January 1, [1985] 1997, the amount determined pursuant to subsection b. of this section in any fiscal year may be made, negotiated and awarded by a contracting agent, when so authorized by resolution of the board of trustees of the county college, without public advertising for bids and bidding therefor.

    b. Commencing January 1, [1985] 1997 and every two years thereafter, the Governor, in consultation with the Department of the Treasury, shall adjust the threshold amount set forth in subsection a. of this section in direct proportion to the rise or fall of the Consumer Price Index for all urban consumers in the New York and Northeastern New Jersey and the Philadelphia areas as reported by the United States Department of Labor. The adjustment shall become effective on July 1 of the year in which it is reported.

    c. Any purchase, contract or agreement made pursuant to this section may be awarded for a period of 12 consecutive months, notwithstanding that such 12-month period does not coincide with the fiscal year.

(cf: P.L.1994, c.48, s.141)

    4. Section 3 of P.L.1971, c.198 (C.40A:11-3) is amended to read as follows:

    3. a. Any purchase, contract or agreement for the performance of any work or the furnishing or hiring of materials or supplies, the cost or price of which, together with any other sums expended or to be expended for the performance of any work or services in connection with the same immediate program, undertaking, activity or project or the furnishing of similar materials or supplies during the same fiscal year paid with or out of public funds, does not exceed in the fiscal year the total sum of [$7,500.00] $25,000. or the amount determined pursuant to subsection b. of this section, may be made, negotiated or awarded by a contracting agent when so authorized by resolution of the governing body of the contracting unit without public advertising for bids. Such authorization may be granted for each purchase, contract or agreement or by a general delegation of the power to make, negotiate or award such purchases, contracts or agreements pursuant to this section.

    Any purchase, contract or agreement made pursuant to this section may be awarded for a period of 12 consecutive months notwithstanding that such 12-month period does not coincide with the fiscal year. The Division of Local Government Services shall adopt and promulgate rules and regulations concerning the methods of accounting for all contracts that do not coincide with the fiscal year. b. [The] Commencing January 1, 1997 and every two years thereafter, the Governor, in consultation with the Department of the Treasury, shall[, no later than March 1 of each odd-numbered year,] adjust the threshold amount set forth in subsection a. of this section[, or subsequent to 1985 the threshold amount resulting from any adjustment under this subsection or section 17 of P.L.1985, c.469,] in direct proportion to the rise or fall of the Consumer Price Index for all urban consumers in the New York City and the Philadelphia areas as reported by the United States Department of Labor. The Governor shall, no later than June 1 of each odd-numbered year, notify each governing body of the adjustment. The adjustment shall become effective on July 1 of each odd-numbered year.

(cf: P.L.1991, c.143, s1)

    5. Section 2 of P.L.1954, c.48 (C.52:34-7) is amended to read as follows:

     2. a. Any such purchase, contract or agreement may be made, negotiated, or awarded by the Director of the Division of Purchase and Property or the Director of the Division of Building and Construction, as the case may be, without advertising, in any manner which he may deem effective to promote full and free competition whenever competition is practicable, if: (1) the aggregate amount involved does not exceed [$7,500.00] $25,000. or the amount determined pursuant to subsection b. of this section; or (2) (Deleted by amendment, P.L. 1985, c. 107) or (3) the aggregate amount involved including labor and construction materials does not exceed $25,000.00 or the amount determined pursuant to subsection b. of this section in the case of contracts or agreements for the erection, construction, alteration, or repair of any public building or facility.

   When the aggregate amount involved does not exceed $25,000.00 or the amount determined pursuant to subsection b. of this section in the case of contracts or agreements for the erection, construction, alteration, or repair of any public building or facility, the Director of the Division of Building and Construction may, at his discretion, delegate to the appropriate State department or using agency his authority to make, negotiate, or award a contract or agreement without advertising.

   The Administrator of the General Services Administration shall establish, in accordance with the "Administrative Procedure Act" (P.L. 1968, c. 410; C. 52:14B-1 et seq.), rules and regulations concerning procedural requirements for the making, negotiating or awarding of purchases, contracts or agreements pursuant to this section.

   b. [The] Commencing January 1, 1997 and every two years thereafter, the Governor, in consultation with the Department of the Treasury, shall[, no later than March 1 of each odd-numbered year,] adjust the threshold amount set forth in subsection a. of this section[, or subsequent to 1985 the threshold amount resulting from any adjustment under this subsection,] in direct proportion to the rise or fall of the Consumer Price Index for all urban consumers in the New York City and the Philadelphia areas as reported by the United States Department of Labor. The Governor shall, no later than June 1 of each odd-numbered year, notify the Director of the Division of Purchase and Property and the Director of the Division of Building and Construction of the adjustment. The adjustment shall become effective on July 1 of each odd-numbered year.

(cf: P.L.1985, c.349, s.1)

    6. Section 11 of P.L.1981, c.120 (C.52:18A-78.11) is amended to read as follows:

    11. a. The authority, in the exercise of its authority to make and enter into contracts and agreements necessary or incidental to the performance of its duties and the execution of its powers, shall adopt standing rules and procedures providing that no contract on behalf of the authority shall be entered into for the doing of any work, or for the hiring of equipment or vehicles, where the sum to be expended exceeds the sum of [$7,500.00] $25,000. unless the authority shall first publicly advertise for bids therefor, and shall award the contract to the lowest responsible bidder. Advertising shall not be required where the contract to be entered into is one for the furnishing or performing of services of a professional nature or for the supplying of any product or the rendering of any service by a public utility subject to the jurisdiction of the Board of Public Utilities and tariffs and schedules of the charges made, charged, or exacted by the public utility for any products to be supplied or services to be rendered are filed with the board. This section shall not prevent the authority from having any work done by its own employees, nor shall it apply to repairs, or to the furnishing of materials, supplies or labor, or the hiring of equipment or vehicles, when the safety or protection of its or other public property or the public convenience requires, or the exigency of the accomplishment of the projects will not allow advertisement. In that case, the board of directors of the authority shall, by resolution, declare the exigency or emergency to exist, and set forth in the resolution the nature thereof and the approximate amount to be so expended.

    b. In undertaking any project where the cost of construction, reconstruction, rehabilitation or improvement will exceed $25,000.00, the authority shall be subject to the rules and regulations of the Division of Building and Construction concerning procedural requirements for the making, negotiating or awarding of purchases, contracts or agreements; and the authority, with the assistance of the division, shall prepare, or cause to be prepared, separate plans and specifications for:

    (1) The plumbing and gas fitting and all work and materials kindred thereto,

     (2) The steam and hot water heating and ventilating apparatus, steam power plants and all work and materials kindred thereto,

    (3) The electrical work,

    (4) Structural steel and ornamental iron work and materials, and

    (5) All other work and materials required to complete the building; and the authority shall receive (a) separate bids for each of these branches of the work and (b) bids for all the work and materials required to complete the project to be included in a single overall contract, in which case there shall be set forth in the bid the name or names of all subcontractors to whom the bidder will subcontract for the furnishing of any of the work and materials specified in (a) above.

    If the sum total of the amounts bid by the lowest responsible bidder for each branch is less than the amount bid by the lowest responsible bidder for all of the work and materials, the authority shall award separate contracts for each of branches to the lowest responsible bidder therefor, but if the sum total of the amount bid by the lowest responsible bidder for each branch is not less than the amount bid by the lowest responsible bidder for all the work and materials, the authority shall award a single over-all contract to the lowest responsible bidder for all of the work and materials.

    Whenever a contract is awarded under (b) above, all payments required to be made by the authority under the contract for work and materials supplied by a subcontractor shall, upon the certification of the contractor of the amount due to the subcontractor, be paid directly to the subcontractor.

    All construction, reconstruction, rehabilitation or improvement undertaken by the authority pursuant to this act shall be subject during such undertaking to the supervision of the Division of Building and Construction to the same extent as any project undertaken by the State.

    c. With respect to the lease or sale of any project or portion thereof to any person, firm, partnership or corporation, for subsequent lease to or purchase by a State agency, no agreement for that lease or sale shall be entered into, unless the authority shall first publicly advertise for bids therefor. The authority shall employ a person, firm, partnership or corporation, independent from any other aspect or component of the financing of or any ownership or leasehold interest in that project, to assist in the bid procedure and evaluation.

(cf: P.L.1983, c.138, s.8)

    7. This act shall take effect immediately.

STATEMENT

    This bill would allow State and local public contracts valued at $25,000. or less to be awarded without public advertising for bids. Existing law establishes the limit on the value of a contract which may be awarded without public bidding at $7,500 but permits periodic adjustments in this amount based upon the cost of living. As a result of these adjustments, the current limit is approximately $11,200. Nevertheless, the increase to $25,000 is necessary to streamline the procurement process and give public entities greater flexibility in making purchases. In particular, increasing the limit would enable public entities to make larger purchases on favorable terms from businesses which do not typically bid on public contracts. The practice of making biennial adjustments to the limit in response to changes in the Consumer Price Index, where currently applicable, would be continued. The bill's provisions would apply to the State, units of local government, school districts, State colleges, county colleges and the New Jersey Building Authority.

Increases limit on value of certain State and local public contracts which may be awarded without public advertising for bids.