SENATE, No. 1932
STATE OF NEW JERSEY
INTRODUCED MARCH 20, 1997
By Senator EWING
An Act concerning certain contracts of the New Jersey Highway Authority and amending P.L.1968, c.459.
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. Section 1 of P.L.1968, c.459 (C.27:12B-5.2) is amended to read as follows:
1. a. The New Jersey Highway 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 operating rules and procedures providing that, except as hereinafter provided, 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 or, after June 30, 1985, the amount determined pursuant to subsection b. of this section unless the authority shall first publicly advertise for bids therefor, and shall award the contract to the lowest responsible bidder; provided, however, that such 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 [Utility Commissioners]Utilities of this State and tariffs and schedules of the charges, made, charged, or exacted by the public utility for any such products to be supplied or services to be rendered are filed with the said board. Contracts for towing and storage services shall be advertised and awarded pursuant to subsection c. of this section.
This subsection 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 require, or the exigency of the authority's service will not admit of such advertisement. In such case the authority shall, by resolution, passed by the affirmative vote of a majority of its members, 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. Commencing January 1, 1985, 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 authority of the adjustment. The adjustment shall become effective on July 1 of each odd-numbered year.
c. The authority shall adopt regulations, pursuant to the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.), to provide open and competitive procedures for awarding contracts for towing and storage services. The regulations shall fix maximum towing and storage fees, subject to regulations promulgated by the Commissioner of Banking and Insurance pursuant to section 60 of P.L.1990, c.8 (C.17:33B-47), and establish objective criteria to be considered in awarding a contract for towing and storage services which shall include, but shall not be limited to, reliability, experience, response time, acceptance of credit cards and prepaid towing contracts, adequate equipment to safely handle a sufficient volume of common vehicle types under a variety of traffic and weather conditions, location of storage and repair facilities, security of vehicles towed or stored, financial return to the authority, and maintenance of adequate liability insurance. Towing and storage fees, set by the authority, shall not be considered in awarding a contract for towing and storage services.
(cf: P.L.1984, c.128, s.3)
2. This act shall take effect immediately and shall apply to contracts entered into on and after the 60th day following the effective date of this act and to renewals of contracts entered into prior to the effective date of this act, which renewals are effectuated after the 60th day following the effective date of this act.
STATEMENT
This bill would require the New Jersey Highway Authority (the authority), which operates the Garden State Parkway, to implement open and competitive procedures and develop objective criteria for awarding contracts for towing and storage services.
In N.E.R.I. Corporation v. New Jersey Highway Authority, 147 N.J. 223 (1996), the New Jersey Supreme Court ruled that authority contracts for towing and storage services must be competitively bid and awarded to the lowest responsible bidder. This standard does not provide the authority with sufficient discretion in awarding contracts, since factors such as equipment, experience, response time and location of facilities are not necessarily addressed under that bidding process. In his dissent, Justice Stein notes that the court's ruling "overrides the Authority's informed judgment and requires that the Authority award towing contracts only to those towers who bid the lowest rates" and that forcing "the Authority to select towers based on price rather than competence" is a result that "can hardly be understood to advance the best interests of Parkway motorists." Justice Stein further notes that the "Local Public Contracts Law," N.J.S.40A:11-5(u), contains an exemption for towing and storage contracts and that it would better serve the public interest to also allow the authority to select towers on the basis of reliability rather than rates.
This bill would establish an exemption from bidding for the authority similar to exemption provided to local contracting units for towing and storage services under the "Local Public Contracts Law," N.J.S.40A:11-5(u), when the contracting unit has set the rates and charges for those services.
The bill would require the authority to adopt regulations, pursuant to the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.), to provide open and competitive procedures for awarding contracts for towing and storage services. The regulations would fix maximum towing and storage fees, subject to regulations promulgated by the Commissioner of Banking and Insurance pursuant to section 60 of P.L.1990, c.8 (C.17:33B-47), and establish objective criteria to be considered in awarding a contract for towing and storage services. The objective criteria would include, but not be limited to, reliability, experience, response time, acceptance of credit cards and prepaid towing contracts, adequate equipment to safely handle a sufficient volume of common vehicle types under a variety of traffic and weather conditions, location of storage and repair facilities, security of vehicles towed or stored, financial return to the authority, and maintenance of adequate liability insurance. As the bill requires the authority to set towing and storage fees, those fees would not be considered in awarding a contract for towing and storage services.
The bill would take effect immediately and would apply to contracts entered into on and after the 60th day following the effective date of the act and to renewals of contracts entered into prior to the effective date of this act which are effectuated after the 60th day following the effective date of the act.
Requires New Jersey Highway Authority to implement open and competitive contracting procedures for contracts for towing and storage services.