SENATE BUDGET AND APPROPRIATIONS COMMITTEE

STATEMENT TO

SENATE, No. 612

with Senate committee amendments

STATE OF NEW JERSEY

DATED: FEBRUARY 15, 1996

      The Senate Budget and Appropriations Committee reports favorably Senate Bill No. 612 with committee amendments.

      Senate Bill No. 612, as amended, authorizes the Director of the Division of Purchase and Property in the Department of the Treasury, to enter into cooperative purchasing agreements with other states for the purchase of goods and services. The parties to a cooperative purchasing agreement would be able to standardize and combine their requirements for the purchase of a particular good or service into a single contract solicitation that would be competitively bid and awarded by one of the parties on behalf of the jurisdictions participating in the contract. Participation in any particular contract under the agreement would be voluntary.

      The director may elect to purchase through a contract awarded pursuant to a cooperative purchasing agreement whenever the director determines that this would be the most cost-effective method of procurement. The bill also authorizies the director to solicit bids and award contracts on behalf of this State and other parties to a cooperative purchasing agreement so long as each jurisdiction participating in the contract is responsible for the payment of the purchase price and cost of purchases made by it under the contract.

      According to the sponsor, cooperative purchasing agreements would enable New Jersey to benefit from procurements that are more cost-effective because of volume purchasing, standardized specifications, and increased leverage in the marketplace.

COMMITTEE AMENDMENTS:

      The committee amended the bill to delete sections 1 through 6 which would have authorized the Director of the Division of Purchase and Property in the Department of the Treasury, as well as authorities, State and county colleges, county and municipal governments, and school districts, to use the Federal Supply Schedules administered by the Federal General Services Administration (GSA) to the extent permitted by the "Federal Acquisition Streamlining Act of 1994," Pub.L.No.103-355, signed into law on October 13, 1994. The Legislature's grant of this authority to purchase from the Federal Supply Schedules would have provided an alternative to the current statutory procedures concerning the award of contracts.

      The federal act permits the GSA administrator to authorize the use of the Schedules by State and local governments upon request. Through the GSA program, commonly used supplies and services in varying quantities may be purchased. Using competitive procedures, indefinite delivery contracts will be awarded under the program by GSA to commercial firms to provide supplies and services at stated prices for given periods of time.

      The amendment was requested by the sponsor and supported by the Division of Purchase and Property because the federal regulations have not yet been promulgated and, therefore, the program is not yet in operation. The division anticipates federal regulations to be complete in September of 1996. At that time, new legislation incorporating the purposes of sections 1 through 6 may be introduced.

FISCAL IMPACT

      This bill has not been certified as requiring a fiscal note. However, the State may realize a reduction in expenditures in the long run for certain products and services that may be practically and economically purchased through cooperative purchasing agreements.