S1742

SENATE, No. 1742

STATE OF NEW JERSEY

INTRODUCED DECEMBER 19, 1996

By Senators DiFRANCESCO, LESNIAK, Kyrillos, Adler and Codey

An Act concerning certain public contracts, revising various parts of the statutory law, and supplementing chapter 18A of Title 18A of the New Jersey Statutes, P.L.1986, c.43 (C.18A:64-52 et seq.), P.L.1982, c.189 (C.18A:64A-25.1 et seq.), P.L.1971, c.198 (C.40A:11-1 et seq.), and chapter 32 of Title 52 of the Revised Statutes.

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

1. (New section) a. Except as otherwise provided in this section, when the entire cost of the construction, renovation, alteration, or repair of any building, structure, facility, or other improvement to real property by a board of education will exceed the amount set forth in, or calculated by the Governor pursuant to, N.J.S.18A:18A-3, whichever is applicable, the board of education or its contracting agent shall advertise for and receive, in the manner provided by law, bids for a single overall contract for all construction work and materials required to complete the project. Bidders shall be from a list of bidders qualified and classified by the Division of Building and Construction at the time of the bid due date in accordance with R.S.52:35-1 et seq. unless the board has implemented, pursuant to statutory authorization, its own qualification and classification procedure as approved by the Division of Building and Construction or the Department of Community Affairs.

b. Non-construction items that are part of the project but unrelated to the completion and coordination of the construction work and materials may be included in the overall contract or may be contracted for on a separate basis. The Director of the Division of Building and Construction shall determine which items are considered non-construction and unrelated to completion and coordination of the construction work and materials and therefore are eligible to be bid and contracted for on a separate basis. The determination of the director shall be consistent with customary and historical practices in the construction industry.

c. If the board is permitted by law to include any proprietary items as part of the construction work and materials, these items shall be included in the bid as allowances. A proprietary item is an item which is only available from a single source. An allowance is an amount which shall be established by the board prior to bid to cover the cost of a prescribed item, with the provision that any variation between the amount established and the finally determined cost of the item will be reflected in a change order.

d. Subcontractors for the following categories of work shall be qualified and classified in the same manner as the general contractor: sitework; concrete; historical restoration; masonry; structural steel; plumbing; heating, ventilating, and air conditioning; and electrical.

e. If the cost of any one trade constitutes at least 50% of the estimated total cost of the construction work and materials, this trade may be advertised for bid and contracted for on a separate basis, subject to the approval of the Director of the Division of Building and Construction. Bidders shall be from a list of bidders qualified and classified as set forth in subsection a. of this section.

f. In addition to the exception provided for in subsection e., the director shall have the authority to make other exceptions to the requirement for a single overall contract for construction work and materials if the nature of one or more categories of the work is unique in some manner or form so that a single overall contract would result in the work not being performed by a qualified contractor. In that event the board of education or its contracting agent may advertise for bids for those unique categories of work on a separate basis, or require that subcontractors for those categories of work be separately listed in the bid for the single overall contract; such bidders and subcontractors shall be qualified and classified as set forth in subsection a. of this section.

g. In all cases a contract shall be awarded to the lowest responsible bidder.

2. (New section) a. Except as otherwise provided in this section, when the entire cost of the construction, renovation, alteration, or repair of any building, structure, facility, or other improvement to real property by a State college will exceed the amount set forth in, or calculated by the Governor pursuant to, section 3 of P.L.1986, c.43 (C.18A:64-54), whichever is applicable, the contracting agent shall advertise for and receive, in the manner provided by law, bids for a single overall contract for all construction work and materials required to complete the project. Bidders shall be from a list of bidders qualified and classified by the Division of Building and Construction at the time of the bid due date in accordance with R.S.52:35-1 et seq. unless the State college has implemented, pursuant to statutory authorization, its own qualification and classification procedure as approved by the Division of Building and Construction or the Department of Community Affairs.

c. If the State college is permitted by law to include any proprietary items as part of the construction work and materials, these items shall be included in the bid as allowances. A proprietary item is an item which is only available from a single source. An allowance is an amount which shall be established by the State college prior to bid to cover the cost of a prescribed item, with the provision that any variation between the amount established and the finally determined cost of the item will be reflected in a change order.

f. In addition to the exception provided for in subsection e., the director shall have the authority to make other exceptions to the requirement for a single overall contract for construction work and materials if the nature of one or more categories of the work is unique in some manner or form so that a single overall contract would result in the work not being performed by a qualified contractor. In that event the contracting agent may advertise for bids for those unique categories of work on a separate basis, or require that subcontractors for those categories of work be separately listed in the bid for the single overall contract; such bidders and subcontractors shall be qualified and classified as set forth in subsection a. of this section.

g. In all cases a contract shall be awarded to the lowest responsible bidder.

3. (New section) a. Except as otherwise provided in this section, when the entire cost of the construction, renovation, alteration, or repair of any building, structure, facility, or other improvement to real property by a county college will exceed the amount set forth in, or calculated by the Governor pursuant to, section 3 of P.L.1982, c.189 (C.18A:64A-25.3), whichever is applicable, the contracting agent shall advertise for and receive, in the manner provided by law, bids for a single overall contract for all construction work and materials required to complete the project. Bidders shall be from a list of bidders qualified and classified by the Division of Building and Construction at the time of the bid due date in accordance with R.S.52:35-1 et seq. unless the county college has implemented, pursuant to statutory authorization, its own qualification and classification procedure as approved by the Division of Building and Construction or the Department of Community Affairs.

c. If the county college is permitted by law to include any proprietary items as part of the construction work and materials, these items shall be included in the bid as allowances. A proprietary item is an item which is only available from a single source. An allowance is an amount which shall be established by the county college prior to bid to cover the cost of a prescribed item, with the provision that any variation between the amount established and the finally determined cost of the item will be reflected in a change order.

f. In addition to the exception provided for in subsection e., the director shall have the authority to make other exceptions to the requirement for a single overall contract for construction work and materials if the nature of one or more categories of the work is unique in some manner or form so that a single overall contract would result in the work not being performed by a qualified contractor. In that event the contracting agent may advertise for bids for those unique categories of work on a separate basis, or require that subcontractors for those categories of work be separately listed in the bid for the single overall contract; such bidders and subcontractors shall be qualified and classified as set forth in subsection a. of this section.

g. In all cases a contract shall be awarded to the lowest responsible bidder.

4. N.J.S.18A:72A-5 is amended to read as follows:

18A:72A-5. The authority shall have power:

(a) To adopt bylaws for the regulation of its affairs and the conduct of its business;

(b) To adopt and have an official common seal and alter the same at pleasure;

(d) To sue and be sued in its own name, and plead and be impleaded;

(e) To borrow money and to issue bonds and notes and other obligations of the authority and to provide for the rights of the holders thereof as provided in this chapter;

(f) To acquire, lease as lessee, hold and dispose of real and personal property or any interest therein, in the exercise of its powers and the performance of its duties under this chapter;

(g) To acquire in the name of the authority by purchase or otherwise, on such terms and conditions and in such manner as it may deem proper, or by the exercise of the power of eminent domain, any land or interest therein and other property which it may determine is reasonably necessary for any project, including any lands held by any county, municipality or other governmental subdivision of the State; and to hold and use the same and to sell, convey, lease or otherwise dispose of property so acquired, no longer necessary for the authority's purposes;

(h) To receive and accept, from any federal or other public agency or governmental entity, grants or loans for or in aid of the acquisition or construction of any project, and to receive and accept aid or contributions from any other source, of either money, property, labor or other things of value, to be held, used and applied only for the purposes for which such grants, loans and contributions may be made; (i) To prepare or cause to be prepared plans, specifications, designs and estimates of costs for the construction and equipment of projects for participating colleges under the provisions of this chapter, and from time to time to modify such plans, specifications, designs or estimates;

(j) By contract or contracts or by its own employees to construct, acquire, reconstruct, rehabilitate and improve, and furnish and equip, projects for participating colleges; (1) however, in any contract or contracts undertaken by the authority for the construction, reconstruction, rehabilitation or improvement of any public college project where the cost of such work will exceed $25,000, the contracting agent shall, except as otherwise provided in this subsection, advertise for and receive, in the manner provided by law[: (1) separate bids for the following categories of work;

(a) the plumbing and gas fitting work;

(b) the heating and ventilating systems and equipment;

(d) the structural steel and ornamental iron work;

(e) all other work and materials required for the completion of the project, or

(2) bids for all work and materials required to complete the entire project if awarded as a single contract; or

(3) both (1) and (2) above.

All bids submitted shall set forth the names and license numbers of, and evidence of performance security from, all subcontractors to whom the bidder will subcontract the work described in the foregoing categories (1)(a) through (1)(e).

Contracts shall be awarded to the lowest responsible bidder whose bid, conforming to the invitation for bids, will be the most advantageous to the authority], bids for a single overall contract for all construction work and materials required to complete the project. Bidders shall be from a list of bidders qualified and classified by the Division of Building and Construction at the time of the bid due date in accordance with R.S.52:35-1 et seq. unless the authority has implemented, pursuant to statutory authorization, its own qualification and classification procedure as approved by the Division of Building and Construction or the Department of Community Affairs.

(2) Non-construction items that are part of the project but unrelated to the completion and coordination of the construction work and materials may be included in the overall contract or may be contracted for on a separate basis. The Director of the Division of Building and Construction shall determine which items are considered non-construction and unrelated to completion and coordination of the construction work and materials and therefore are eligible to be bid and contracted for on a separate basis. The determination of the director shall be consistent with customary and historical practices in the construction industry.

(3) If the authority is permitted by law to include any proprietary items as part of the construction work and materials, these items shall be included in the bid as allowances. A proprietary item is an item which is only available from a single source. An allowance is an amount which shall be established by the authority prior to bid to cover the cost of a prescribed item, with the provision that any variation between the amount established and the finally determined cost of the item will be reflected in a change order.

(4) Subcontractors for the following categories of work shall be qualified and classified in the same manner as the general contractor: sitework; concrete; historical restoration; masonry; structural steel; plumbing; heating, ventilating, and air conditioning; and electrical.

(5) If the cost of any one trade constitutes at least 50% of the estimated total cost of the construction work and materials, this trade may be advertised for bid and contracted for on a separate basis, subject to the approval of the Director of the Division of Building and Construction. Bidders shall be from a list of bidders qualified and classified as set forth in paragraph (1) of this subsection.

(6) In addition to the exception provided for in paragraph (5), the director shall have the authority to make other exceptions to the requirement for a single overall contract for construction work and materials if the nature of one or more categories of the work is unique in some manner or form so that a single overall contract would result in the work not being performed by a qualified contractor. In that event the contracting agent may advertise for bids for those unique categories of work on a separate basis, or require that subcontractors for those categories of work be separately listed in the bid for the single overall contract; such bidders and subcontractors shall be qualified and classified as set forth in paragraph (1) of this subsection.

(7) In all cases a contract shall be awarded to the lowest responsible bidder;

(k) To determine the location and character of any project to be undertaken pursuant to the provisions of this chapter, and to construct, reconstruct, maintain, repair, operate, lease, as lessee or lessor, and regulate the same; to enter into contracts for any or all such purposes; to enter into contracts for the management and operation of a project, and to designate a participating college as its agent to determine the location and character of a project undertaken by such participating college under the provisions of this chapter and, as the agent of the authority, to construct, reconstruct, maintain, repair, operate, lease, as lessee or lessor, and regulate the same, and, as agent of the authority, to enter into contracts for any and all such purposes including contracts for the management and operation of such project;

(l) To establish rules and regulations for the use of a project or any portion thereof and to designate a participating college as its agent to establish rules and regulations for the use of a project undertaken by such participating college;

(m) Generally to fix and revise from time to time and to charge and collect rates, rents, fees and other charges for the use of and for the services furnished or to be furnished by a project or any portion thereof and to contract with holders of its bonds and with any other person, party, association, corporation or other body, public or private, in respect thereof;

(n) To enter into any and all agreements or contracts, execute any and all instruments, and do and perform any and all acts or things necessary, convenient or desirable for the purposes of the authority or to carry out any power expressly given in this chapter;

(o) To invest any moneys held in reserve or sinking funds, or any moneys not required for immediate use or disbursement, at the discretion of the authority, in such obligations as are authorized by law for the investment of trust funds in the custody of the State Treasurer; (p) To enter into any lease relating to higher education equipment with a public or private institution of higher education pursuant to the provisions of P.L.1993, c.136 (C.18A:72A-40 et al.).

(cf: P.L.1993,c.136,s.4)

5. (New section) a. Except as otherwise provided in this section, when the entire cost of the construction, renovation, alteration, or repair of any building, structure, facility, or other improvement to real property by any contracting unit will exceed the amount set forth in, or calculated by the Governor pursuant to, section 3 of P.L.1971, c.198 (C.40A:11-3), whichever is applicable, the contracting unit shall advertise for and receive, in the manner provided by law, bids for a single overall contract for all construction work and materials required to complete the project. Bidders shall be from a list of bidders qualified and classified by the Division of Building and Construction at the time of the bid due date in accordance with R.S.52:35-1 et seq. unless the contracting unit has implemented, pursuant to statutory authorization, its own qualification and classification procedure as approved by the Division of Building and Construction or the Department of Community Affairs.

c. If the contracting unit is permitted by law to include any proprietary items as part of the construction work and materials, these items shall be included in the bid as allowances. A proprietary item is an item which is only available from a single source. An allowance is an amount which shall be established by the contracting unit prior to bid to cover the cost of a prescribed item, with the provision that any variation between the amount established and the finally determined cost of the item will be reflected in a change order.

f. In addition to the exception provided for in subsection e., the director shall have the authority to make other exceptions to the requirement for a single overall contract for construction work and materials if the nature of one or more categories of the work is unique in some manner or form so that a single overall contract would result in the work not being performed by a qualified contractor. In that event the contracting unit may advertise for bids for those unique categories of work on a separate basis, or require that subcontractors for those categories of work be separately listed in the bid for the single overall contract; such bidders and subcontractors shall be qualified and classified as set forth in subsection a. of this section.

g. In all cases a contract shall be awarded to the lowest responsible bidder.

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 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] (1) Except as otherwise provided in this subsection, 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.] advertise for and receive, in the manner provided by law, bids for a single overall contract for all construction work and materials required to complete the project. Bidders shall be from a list of bidders qualified and classified by the Division of Building and Construction at the time of the bid due date in accordance with R.S.52:35-1 et seq. unless the authority has implemented, pursuant to statutory authorization, its own qualification and classification procedure as approved by the Division of Building and Construction or the Department of Community Affairs.

(6) In addition to the exception provided for in paragraph (5), the director shall have the authority to make other exceptions to the requirement for a single overall contract for construction work and materials if the nature of one or more categories of the work is unique in some manner or form so that a single overall contract would result in the work not being performed by a qualified contractor. In that event the authority may advertise for bids for those unique categories of work on a separate basis, or require that subcontractors for those categories of work be separately listed in the bid for the single overall contract; such bidders and subcontractors shall be qualified and classified as set forth in paragraph (1) of this subsection.

(7) In all cases a contract shall be awarded to the lowest responsible bidder.

(8) 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. (New section) a. Except as otherwise provided in this section, when the entire cost of the construction, renovation, alteration, or repair by the State of any building, structure, facility, or other improvement to real property will exceed the amount set forth in, or calculated by the Governor pursuant to, section 2 of P.L.1954, c.48 (C.52:34-7), whichever is applicable, the board, body, or person authorized by law to award contracts for such work shall advertise for and receive, in the manner provided by law, bids for a single overall contract for all construction work and materials required to complete the project. Bidders shall be from a list of bidders qualified and classified by the Division of Building and Construction at the time of the bid due date in accordance with R.S.52:35-1 et seq. unless the board, body, or person authorized by law to award contracts has implemented, pursuant to statutory authorization, its own qualification and classification procedure as approved by the Division of Building and Construction or the Department of Community Affairs.

c. If the board, body, or person authorized by law to award contracts is permitted by law to include any proprietary items as part of the construction work and materials, these items shall be included in the bid as allowances. A proprietary item is an item which is only available from a single source. An allowance is an amount which shall be established by the board, body, or person authorized by law to award contracts, prior to bid, to cover the cost of a prescribed item, with the provision that any variation between the amount established and the finally determined cost of the item will be reflected in a change order.

f. In addition to the exception provided for in subsection e., the director shall have the authority to make other exceptions to the requirement for a single overall contract for construction work and materials if the nature of one or more categories of the work is unique in some manner or form so that a single overall contract would result in the work not being performed by a qualified contractor. In that event the board, body, or person authorized by law to award contracts may advertise for bids for those unique categories of work on a separate basis, or require that subcontractors for those categories of work be separately listed in the bid for the single overall contract; such bidders and subcontractors shall be qualified and classified as set forth in subsection a. of this section.

g. In all cases a contract shall be awarded to the lowest responsible bidder.

8. The following are repealed:

N.J.S.18A:18A-18;

section 2 of P.L.1992, c.61 (C.18A:64-76.1);

section 25 of P.L.1982, c.189 (C.18A:64A-25.25);

section 16 of P.L.1971, c.198 (C.40A:11-16); and

R.S.52:32-2.

9. This act shall take effect immediately.

STATEMENT

This bill concerns public contracts for the construction, renovation, alteration, or repair of public buildings by the State, the New Jersey Building Authority, the New Jersey Educational Facilities Authority, State and county colleges, local governments, and school boards.

Current law permits, or in the case of school boards, the State, and the New Jersey Building Authority requires, separate bids on five categories of work (plumbing and gas fitting work; heating and ventilating systems and equipment; electrical work; structural steel and ornamental iron work; and the remaining work and materials required for completion of a project) as well as bids on all the work and materials required. Current law also requires that: (1) if the work on the five categories is going to be subcontracted, the names of all subcontractors must be included in the bids; (2) if bids are received for the five separate categories and the sum total is less than the amounts bid for all the work, separate contracts shall be awarded, and if the reverse is the case, a single overall contract shall be awarded; and (3) if a single overall contract is awarded, the public entity (except in two cases) shall pay the subcontractors directly.

This bill replaces this mode of operation with the requirements: (1) that bids be received for a single overall contract for all construction work and materials required to complete the project; and (2) that, whatever the public entity awarding the contract, the bidders must be from a list of bidders qualified and classified by the Division of Building and Construction unless the entity has implemented, pursuant to statutory authorization, its own qualification and classification procedure as approved by the Division of Building and Construction or the Department of Community Affairs. Non-construction items that are part of the project but unrelated to the completion and coordination of the construction work and materials may be included in the overall contract or may be contracted for on a separate basis; the Director of the Division of Building and Construction shall determine which items are considered non-construction and unrelated to the completion and coordination of the construction work and materials and therefore are eligible to be bid and contracted for on a separate basis (the determination shall be consistent with customary and historical practices in the construction industry). If an entity is permitted by law to include any proprietary items as part of the construction work and materials, these items shall be included in the bid as allowances (a "proprietary item " and an "allowance" are defined in the bill). Subcontractors for the following categories of work shall be qualified and classified in the same manner as the general contractor: sitework; concrete; historical restoration; masonry; structural steel; plumbing; heating, ventilating, and air conditioning; and electrical.

Some exceptions to the single overall contract requirement are permitted. If the cost of any one trade constitutes at least 50% of the estimated total cost of the construction work and materials, this trade may be advertised for bid and contracted for on a separate basis, subject to the approval of the Director of the Division of Building and Construction. In addition, the director shall have the authority to make exceptions to the requirement for a single overall contract for construction work and materials if the nature of one or more categories of the work is unique in some manner or form so that a single overall contract would result in the work not being performed by a qualified contractor. In that event the contracting agent or entity may advertise for bids for those unique categories of work on a separate basis, or require that subcontractors for those categories of work be separately listed in the bid for the single overall contract. In all these cases the bidders or subcontractors shall be qualified and classified in the same manner as for a general contractor.

As is the case in current law, a contract shall be awarded to the lowest responsible bidder.

Requires awarding of single overall contract for construction work on public buildings, with certain exceptions when duly authorized.