S112

SENATE, No. 112

STATE OF NEW JERSEY

Introduced Pending Technical Review by Legislative Counsel

PRE-FILED FOR INTRODUCTION IN THE 1996 SESSION

By Senator CIESLA

An Act concerning specifications for 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-15 is amended to read as follows:

18A:18A-15. Specifications generally. Any specifications for an acquisition under this chapter, whether by purchase, contract or agreement, shall be drafted in a manner to encourage free, open and competitive bidding. In particular, no specifications under this chapter may:

a. Require any standard, restriction, condition or limitation not directly related to the purpose, function or activity for which the purchase, contract or agreement is made; or

b. Require that any bidder be a resident of, or that his place of business be located in, the county or school district in which the purchase will be made or the contract or agreement performed, unless the physical proximity of the bidder is requisite to the efficient and economical purchase or performance of the contract or agreement; or

c. Discriminate on the basis of race, religion, sex, national origin; or

d. Require, with regard to any purchase, contract or agreement, the furnishing of any "brand name," but may in all cases require "brand name or equivalent[,]" provided that at least three comparable suppliers or manufacturers are named for each category of materials listed in the specifications, except that if the materials to be supplied or purchased are patented or copyrighted or are available only from a single source, such materials or supplies may be purchased by specification in any case in which the resolution authorizing the purchase, contract, sale or agreement so indicates[, and]; the special need for such patented [or], copyrighted or single-source materials or supplies is directly related to the performance, completion or undertaking of the purpose for which the purchase, contract or agreement is made; in the case of materials specified as being available only from a single source, the specification thereof includes a full description of those materials and an explanation of how their use is directly related to such performance, completion or undertaking, which specification shall be void upon demonstration by a bidder that materials which meet that description are available from at least one alternative source; and a copy of the resolution is included in the specifications; or

e. Fail to include any option for renewal, extension, or release which the board of education may intend to exercise or require; or any terms and conditions necessary for the performance of any extra work; or fail to disclose any matter necessary to the substantial performance of the contract or agreement.

The specifications for every contract for public work, the entire cost whereof will exceed $20,000.00, shall provide that the board of education, through its authorized agent, shall upon completion of the contract report to the department as to the contractor's performance, and shall also furnish such report from time to time during performance if the contractor is then in default.

Any specification adopted by the board of education which knowingly excludes prospective bidders by reason of the impossibility of performance, bidding or qualification by any but one bidder, except as provided herein, or which does not name at least three comparable suppliers or manufacturers for each category of materials listed in the specifications in any case in which "brand name or equivalent" is required, shall be null and void and of no effect and such purchase, contract or agreement shall be readvertised, and the original purchase, contract or agreement shall be set aside by the board of education.

No provision in this section shall be construed to prevent a board of education from designating that a contract, subcontract or other means of procurement of goods, services, equipment or construction shall be awarded to a small business enterprise, a minority business enterprise or a women's business enterprise pursuant to P.L.1985, c.490 (C.18A:18A-51 et seq.).

(cf: P.L.1988, c.37, s.10)

2. Section 13 of P.L.1986, c.43 (C.18A:64-64) is amended to read as follows:

13. All specifications for any purchase, contract or agreement governed by this article shall be drafted in a manner to encourage free, open and competitive bidding. In particular, no specifications under this article may:

a. Require a standard, restriction, condition or limitation not directly related to the purpose, function or activity for which the purchase, contract or agreement is made; or

b. Require that any bidder be a resident of, or that his place of business be located in, the county in which the purchase will be made or the contract or agreement performed, unless the physical proximity of the bidder is requisite to the efficient and economical purchase or performance of the contract or agreement; or

c. Discriminate on the basis of race, religion, sex or national origin; or

d. Require with regard to any purchase, contract or agreement the furnishing of any "brand name," although specifications may in all cases require "brand name or equivalent[,]" provided that at least three comparable suppliers or manufacturers are named for each category of materials listed in the specifications, nor shall materials or supplies which are patented or copyrighted or available only from a single source be specified unless the resolution authorizing the purchase, contract or agreement sets forth the manner in which the special need for the patented [or], copyrighted or single-source materials or supplies is directly related to the performance or purpose for which the purchase, contract or agreement is made; in the case of materials specified as being available only from a single source, the specification thereof includes a full description of those materials and an explanation of how their use is directly related to such performance or purpose, which specification shall be void upon demonstration by a bidder that materials which meet that description are available from at least one alternative source; and a copy of the resolution is included in the specifications; or

e. Fail to include any option for renewal, extension or release which the State college may intend to exercise or require; or

f. Fail to include any terms and conditions necessary for the performance of any extra work; or

g. Fail to disclose any matter necessary to the substantial performance of the contract or agreement.

Any specification adopted by the State college which knowingly excludes prospective bidders by reason of the impossibility of performance, bidding or qualification by any but one bidder, except as provided herein, or which does not name at least three suppliers or manufacturers for each category of materials listed in the specifications in any case in which "brand name or equivalent" is required, shall be null and void and of no effect, and the purchase, contract or agreement shall be readvertised, and the original purchase, contract or agreement shall be set aside by the board of trustees of the State college.

(cf: P.L.1986, c.43, s.13)

3. Section 13 of P.L.1982, c.189 (C.18A:64A-25.13) is amended to read as follows:

a. Require a standard, restriction, condition or limitation not directly related to the purpose, function or activity for which the purchase, contract or agreement is made; or

c. Discriminate on the basis of race, religion, sex or national origin; or

d. Require with regard to any purchase, contract or agreement the furnishing of any "brand name" , although specifications may in all cases require "brand name or equivalent[,]" provided that at least three comparable suppliers or manufacturers are named for each category of materials listed in the specifications, nor shall materials or supplies which are patented or copyrighted or available only from a single source be specified, unless the resolution authorizing the purchase, contract or agreement sets forth the manner in which the special need for such patented [or], copyrighted or single-source materials or supplies is directly related to the performance or purpose for which the purchase, contract or agreement is made; in the case of materials specified as being available only from a single source, the specification thereof includes a full description of those materials and an explanation of how their use is directly related to such performance or purpose, which specification shall be void upon demonstration by a bidder that materials which meet that description are available from at least one alternative source; and a copy of the resolution is included in the specifications; or

e. Fail to include any option for renewal, extension or release which the county college may intend to exercise or require; or

f. Fail to include any terms and conditions necessary for the performance of any extra work; or

g. Fail to disclose any matter necessary to the substantial performance of the contract or agreement.

Any specification adopted by the county college which knowingly excludes prospective bidders by reason of the impossibility of performance, bidding or qualification by any but one bidder, except as provided herein, or which does not name at least three comparable suppliers or manufacturers for each category of materials listed in the specifications in any case in which "brand name or equivalent" is required, shall be null and void and of no effect, and such purchase, contract or agreement shall be readvertised, and the original purchase, contract or agreement shall be set aside by the board of trustees of the county college.

(cf: P.L.1982, c.189, s.13)

4. Section 13 of P.L.1971, c.198 (C.40A:11-13) is amended to read as follows:

13. Specifications. Any specifications for an acquisition under this act, whether by purchase, contract or agreement, shall be drafted in a manner to encourage free, open and competitive bidding. In particular, no specifications under this act may:

(a) Require any standard, restriction, condition or limitation not directly related to the purpose, function or activity for which the purchase, contract or agreement is made; or

(b) Require that any bidder be a resident of, or that his place of business be located in, the county or municipality in which the purchase will be made or the contract or agreement performed, unless the physical proximity of the bidder is requisite to the efficient and economical purchase or performance of the contract or agreement; except that no specification for a contract for the collection and disposal of municipal solid waste shall require any bidder to be a resident of, or that his place of business be located in, the county or municipality in which the contract will be performed; or

(d) Require, with regard to any purchase, contract or agreement, the furnishing of any "brand name," but may in all cases require "brand name or equivalent[,]" provided that at least three comparable suppliers or manufacturers are named for each category of materials listed in the specifications, except that if the materials to be supplied or purchased are patented or copyrighted or are available only from a single source, such materials or supplies may be purchased by specification in any case in which the ordinance or resolution authorizing the purchase, contract, sale or agreement so indicates[, and]; the special need for such patented [or], copyrighted or single-source materials or supplies is directly related to the performance, completion or undertaking of the purpose for which the purchase, contract or agreement is made; in the case of materials specified as being available only from a single source, the specification thereof includes a full description of those materials and an explanation of how their use is directly related to such performance, completion or undertaking, which specification shall be void upon demonstration by a bidder that materials which meet that description are available from at least one alternative source; and a copy of the resolution is included in the specifications; or

(e) Fail to include any option for renewal, extension, or release which the contracting unit may intend to exercise or require; or any terms and conditions necessary for the performance of any extra work; or fail to disclose any matter necessary to the substantial performance of the contract or agreement.

Any specification adopted by the governing body, which knowingly excludes prospective bidders by reason of the impossibility of performance, bidding or qualification by any but one bidder, except as provided herein, or which does not name at least three comparable suppliers or manufacturers for each category of materials listed in the specifications in any case in which "brand name or equivalent" is required shall be null and void and of no effect and subject purchase, contract or agreement shall be readvertised, and the original purchase, contract or agreement shall be set aside by the governing body.

Any specification adopted by the governing body for a contract for the collection and disposal of municipal solid waste shall conform to the uniform bid specifications for municipal solid waste collection contracts established pursuant to section 22 of P.L.1991, c.381 (C.48:13A-7.22).

(cf: P.L.1991, c.381, s.48)

5. This act shall take effect immediately.

STATEMENT

This bill would amend the several statutes governing the awarding of public contracts by school districts, by State colleges, by county colleges, and by counties, municipalities and certain other local public contracting units. In particular, the bill addresses a provision in each of those statutes concerning specification in such contracts of "brand name or equivalent" materials.

Under current law, the inclusion in a public contract for goods or services of any requirement for the furnishing of a particular brand name of materials is generally prohibited; specification of "brand name or equivalent" materials is, however, permitted. Materials and supplies which are patented or copyrighted may be purchased by specification only if the ordinance or resolution authorizing the contract so indicates and the special need therefor is directly related to the purpose for which the contract is to be made.

Under this bill:

(1) Whenever the specifications for a contract require "brand name or equivalent" materials, those specifications shall name at least three comparable suppliers or manufacturers for each category of materials so specified. (This provision is patterned after guidelines used by the Department of the Treasury's Division of Building and Construction in the awarding of State construction contracts.) Any specification which does not include such identification of comparable sources for each category of materials for which "brand name or equivalent" is required shall be void, the original contract shall be set aside, and the subject matter shall be readvertised.

(2) In the case of the purchase of patented, copyrighted or single-source materials, the bill provides that, in addition to meeting the current requirements, the contracting agency shall include in the specifications a copy of the resolution indicating authorization for that purchase. A specification of "single-source" materials would have to include a full description of those materials and an explanation of how their use is directly related to the performance or purpose of the contract. If a bidder could demonstrate that materials which meet that description are available from at least one alternative source, then the single-source specification would be void.

Provides that specifications for certain public contracts must name at least three comparable suppliers or manufacturers.