Bill Text: NJ A1947 | 2016-2017 | Regular Session | Introduced
Bill Title: Exempts local public contracts with start-up manufacturers that invest in redevelopment areas from bidding requirements.
Spectrum: Partisan Bill (Democrat 2-0)
Status: (Introduced - Dead) 2016-10-06 - Reported out of Assembly Committee, 2nd Reading [A1947 Detail]
Download: New_Jersey-2016-A1947-Introduced.html
STATE OF NEW JERSEY
217th LEGISLATURE
PRE-FILED FOR INTRODUCTION IN THE 2016 SESSION
Sponsored by:
Assemblyman CRAIG J. COUGHLIN
District 19 (Middlesex)
SYNOPSIS
Exempts local public contracts with start-up manufacturers that invest in redevelopment areas from bidding requirements.
CURRENT VERSION OF TEXT
Introduced Pending Technical Review by Legislative Counsel.
An Act concerning local public contracts with new manufacturers that invest in redevelopment areas and supplementing and amending P.L.1971, c.198.
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. (New section) The Legislature finds and declares:
a. Despite longstanding enactments that have empowered local units to ameliorate communities beset with deteriorating physical conditions, economic stagnation or decline, and a lack of proper development, many communities continue to struggle with these conditions, particularly in the most urbanized parts of the State, which are close to major transportation networks.
b. While the public bidding requirements of the "Local Public Contracts Law," P.L.1971, c.198 (C.40A:11-1 et seq.) are intended to obtain the lowest priced contracts for the benefit of the taxpayers, it may be more beneficial for a local unit to encourage business investment in struggling communities by foregoing public bidding and awarding contracts to new, small manufacturers that invest in such areas, even though the costs may be slightly higher than what is available through the public bidding process.
c. It is appropriate for the Legislature to define strict and limited circumstances under which a local unit may award contracts to new manufacturers with growth potential that will make a substantial investment in struggling parts of the local unit, without regard to public bidding requirements, in order to support the manufacturers' investment in the community, which would bring much needed neighborhood revitalization, employment opportunities, and tax revenues, and would also benefit the environment by bringing production closer to purchasers and major transportation networks.
2. Section 5 of P.L.1971, c.198 (C.40A:11-5) is amended to read as follows:
5. Any contract the amount of which exceeds the bid threshold, may be negotiated and awarded by the governing body without public advertising for bids and bidding therefor and shall be awarded by resolution of the governing body if:
(1) The subject matter thereof consists of:
(a) (i) Professional services. The governing body shall in each instance state supporting reasons for its action in the resolution awarding each contract and shall forthwith cause to be printed once, in the official newspaper, a brief notice stating the nature, duration, service and amount of the contract, and that the resolution and contract are on file and available for public inspection in the office of the clerk of the county or municipality, or, in the case of a contracting unit created by more than one county or municipality, of the counties or municipalities creating such contracting unit; or (ii) Extraordinary unspecifiable services. The application of this exception shall be construed narrowly in favor of open competitive bidding, whenever possible, and the Division of Local Government Services is authorized to adopt and promulgate rules and regulations after consultation with the Commissioner of Education limiting the use of this exception in accordance with the intention herein expressed. The governing body shall in each instance state supporting reasons for its action in the resolution awarding each contract and shall forthwith cause to be printed, in the manner set forth in subsection (1) (a) (i) of this section, a brief notice of the award of such contract;
(b) The doing of any work by employees of the contracting unit;
(c) The printing of legal briefs, records and appendices to be used in any legal proceeding in which the contracting unit may be a party;
(d) The furnishing of a tax map or maps for the contracting unit;
(e) The purchase of perishable foods as a subsistence supply;
(f) The supplying of any product or the rendering of any service by a public utility, which is subject to the jurisdiction of the Board of Public Utilities or the Federal Energy Regulatory Commission or its successor, in accordance with tariffs and schedules of charges made, charged or exacted, filed with the board or commission;
(g) The acquisition, subject to prior approval of the Attorney General, of special equipment for confidential investigation;
(h) The printing of bonds and documents necessary to the issuance and sale thereof by a contracting unit;
(i) Equipment repair service if in the nature of an extraordinary unspecifiable service and necessary parts furnished in connection with such service, which exception shall be in accordance with the requirements for extraordinary unspecifiable services;
(j) The publishing of legal notices in newspapers as required by law;
(k) The acquisition of artifacts or other items of unique intrinsic, artistic or historical character;
(l) Those goods and services necessary or required to prepare and conduct an election;
(m) Insurance, including the purchase of insurance coverage and consultant services, which exception shall be in accordance with the requirements for extraordinary unspecifiable services;
(n) The doing of any work by handicapped persons employed by a sheltered workshop;
(o) The provision of any goods or services including those of a commercial nature, attendant upon the operation of a restaurant by any nonprofit, duly incorporated, historical society at or on any historical preservation site;
(p) (Deleted by amendment, P.L.1999, c.440.)
(q) Library and educational goods and services;
(r) (Deleted by amendment, P.L.2005, c.212).
(s) The marketing of recyclable materials recovered through a recycling program, or the marketing of any product intentionally produced or derived from solid waste received at a resource recovery facility or recovered through a resource recovery program, including, but not limited to, refuse-derived fuel, compost materials, methane gas, and other similar products;
(t) (Deleted by amendment, P.L.1999, c.440.)
(u) Contracting unit towing and storage contracts, provided that all such contracts shall be pursuant to reasonable non-exclusionary and non-discriminatory terms and conditions, which may include the provision of such services on a rotating basis, at the rates and charges set by the municipality pursuant to section 1 of P.L.1979, c.101 (C.40:48-2.49). All contracting unit towing and storage contracts for services to be provided at rates and charges other than those established pursuant to the terms of this paragraph shall only be awarded to the lowest responsible bidder in accordance with the provisions of the "Local Public Contracts Law" and without regard for the value of the contract therefor;
(v) The purchase of steam or electricity from, or the rendering of services directly related to the purchase of such steam or electricity from a qualifying small power production facility or a qualifying cogeneration facility as defined pursuant to 16 U.S.C.s.796;
(w) The purchase of electricity or administrative or dispatching services directly related to the transmission of such purchased electricity by a contracting unit engaged in the generation of electricity;
(x) The printing of municipal ordinances or other services necessarily incurred in connection with the revision and codification of municipal ordinances;
(y) An agreement for the purchase of an equitable interest in a water supply facility or for the provision of water supply services entered into pursuant to section 2 of P.L.1993, c.381 (C.58:28-2), or an agreement entered into pursuant to P.L.1989, c.109 (N.J.S.40A:31-1 et al.), so long as such agreement is entered into no later than six months after the effective date of P.L.1993, c.381;
(z) A contract for the provision of water supply services entered into pursuant to P.L.1995, c.101 (C.58:26-19 et al.);
(aa) The cooperative marketing of recyclable materials recovered through a recycling program;
(bb) A contract for the provision of wastewater treatment services entered into pursuant to P.L.1995, c.216
(C.58:27-19 et al.);
(cc) Expenses for travel and conferences;
(dd) The provision or performance of goods or services for the support or maintenance of proprietary computer hardware and software, except that this provision shall not be utilized to acquire or upgrade non-proprietary hardware or to acquire or update non-proprietary software;
(ee) The management or operation of an airport owned by the contracting unit pursuant to R.S.40:8-1 et seq.;
(ff) Purchases of goods and services at rates set by the Universal Service Fund administered by the Federal Communications Commission;
(gg) A contract for the provision of water supply services or wastewater treatment services entered into pursuant to section 2 of P.L.2002, c.47 (C.40A:11-5.1), or the designing, financing, construction, operation, or maintenance, or any combination thereof, of a water supply facility as defined in subsection (16) of section 15 of P.L.1971, c.198 (C.40A:11-15) or a wastewater treatment system as defined in subsection (19) of section 15 of P.L.1971, c.198 (C.40A:11-15), or any component part or parts thereof, including a water filtration system as defined in subsection (16) of section 15 of P.L.1971, c.198 (C.40A:11-15);
(hh) The purchase of electricity generated from a power production facility that is fueled by methane gas extracted from a landfill in the county of the contracting unit.
(2) It is to be made or entered into with the United States of America, the State of New Jersey, county or municipality or any board, body, officer, agency or authority thereof or any other state or subdivision thereof.
(3) Bids have been advertised pursuant to section 4 of P.L.1971, c.198 (C.40A:11-4) on two occasions and (a) no bids have been received on both occasions in response to the advertisement, or (b) the governing body has rejected such bids on two occasions because it has determined that they are not reasonable as to price, on the basis of cost estimates prepared for or by the contracting agent prior to the advertising therefor, or have not been independently arrived at in open competition, or (c) on one occasion no bids were received pursuant to (a) and on one occasion all bids were rejected pursuant to (b), in whatever sequence; any such contract may then be negotiated and may be awarded upon adoption of a resolution by a two-thirds affirmative vote of the authorized membership of the governing body authorizing such contract; provided, however, that:
(i) A reasonable effort is first made by the contracting agent to determine that the same or equivalent goods or services, at a cost which is lower than the negotiated price, are not available from an agency or authority of the United States, the State of New Jersey or of the county in which the contracting unit is located, or any municipality in close proximity to the contracting unit;
(ii) The terms, conditions, restrictions and specifications set forth in the negotiated contract are not substantially different from those which were the subject of competitive bidding pursuant to section 4 of P.L.1971, c.198 (C.40A:11-4); and
(iii) Any minor amendment or modification of any of the terms, conditions, restrictions and specifications, which were the subject of competitive bidding pursuant to section 4 of P.L.1971, c.198 (C.40A:11-4), shall be stated in the resolution awarding such contract; provided further, however, that if on the second occasion the bids received are rejected as unreasonable as to price, the contracting agent shall notify each responsible bidder submitting bids on the second occasion of its intention to negotiate, and afford each bidder a reasonable opportunity to negotiate, but the governing body shall not award such contract unless the negotiated price is lower than the lowest rejected bid price submitted on the second occasion by a responsible bidder, is the lowest negotiated price offered by any responsible vendor, and is a reasonable price for such goods or services.
Whenever a contracting unit shall determine that a bid was not arrived at independently in open competition pursuant to subsection (3) of this section it shall thereupon notify the county prosecutor of the county in which the contracting unit is located and the Attorney General of the facts upon which its determination is based, and when appropriate, it may institute appropriate proceedings in any State or federal court of competent jurisdiction for a violation of any State or federal antitrust law or laws relating to the unlawful restraint of trade.
(4) The contracting unit has solicited and received at least three quotations on materials, supplies or equipment for which a State contract has been issued pursuant to section 12 of P.L.1971, c.198 (C.40A:11-12), and the lowest responsible quotation is at least 10% less than the price the contracting unit would be charged for the identical materials, supplies or equipment, in the same quantities, under the State contract. Any such contract entered into pursuant to this subsection may be awarded only upon adoption of a resolution by the affirmative vote of two-thirds of the full membership of the governing body of the contracting unit at a meeting thereof authorizing such a contract. A copy of the purchase order relating to any such contract, the requisition for purchase order, if applicable, and documentation identifying the price of the materials, supplies or equipment under the State contract and the State contract number shall be filed with the director within five working days of the award of any such contract by the contracting unit. The director shall notify the contracting unit of receipt of the material and shall make the material available to the State Treasurer. The contracting unit shall make available to the director upon request any other documents relating to the solicitation and award of the contract, including, but not limited to, quotations, requests for quotations, and resolutions. The director periodically shall review material submitted by contracting units to determine the impact of such contracts on local contracting and shall consult with the State Treasurer on the impact of such contracts on the State procurement process. The director may, after consultation with the State Treasurer, adopt rules in accordance with the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.) to limit the use of this subsection, after considering the impact of contracts awarded under this subsection on State and local contracting, or after considering the extent to which the award of contracts pursuant to this subsection is consistent with and in furtherance of the purposes of the public contracting laws.
(5) Notwithstanding any provision of law, rule or regulation to the contrary, the subject matter consists of the combined collection and marketing, or the cooperative combined collection and marketing of recycled material recovered through a recycling program, or any product intentionally produced or derived from solid waste received at a resource recovery facility or recovered through a resource recovery program including, but not limited to, refuse-derived fuel, compost materials, methane gas, and other similar products, provided that in lieu of engaging in such public advertising for bids and the bidding therefor, the contracting unit shall, prior to commencing the procurement process, submit for approval to the Director of the Division of Local Government Services, a written detailed description of the process to be followed in securing said services. Within 30 days after receipt of the written description the director shall, if the director finds that the process provides for fair competition and integrity in the negotiation process, approve, in writing, the description submitted by the contracting unit. If the director finds that the process does not provide for fair competition and integrity in the negotiation process, the director shall advise the contracting unit of the deficiencies that must be remedied. If the director fails to respond in writing to the contracting unit within 30 days, the procurement process as described shall be deemed approved. As used in this section, "collection" means the physical removal of recyclable materials from curbside or any other location selected by the contracting unit.
(6) Notwithstanding any provision of law, rule or regulation to the contrary, the contract is for the provision of electricity by a contracting unit engaged in the distribution of electricity for retail sale, or for the provision of administrative or dispatching services related to the transmission of such electricity, provided that in lieu of engaging in public advertising for bids and the bidding therefor, the contracting unit shall, prior to commencing the procurement process, submit for approval to the Director of the Division of Local Government Services, a written detailed description of the process to be followed in securing such services. Such process shall be designed in a way that is appropriate to and commensurate with industry practices, and the integrity of the government contracting process. Within 30 days after receipt of the written description, the director shall, if the director finds that the process provides for fair competition and integrity in the negotiation process, approve, in writing, the description submitted by the contracting unit. If the director finds that the process does not provide for fair competition and integrity in the negotiation process, the director shall advise the contracting unit of the deficiencies that must be remedied. If the director fails to respond in writing to the contracting unit within 30 days, the procurement process, as submitted to the director pursuant to this section, shall be deemed approved.
(7) It is to be made or entered into with a qualifying manufacturer and the purchase price is no greater than 15 percent over the fair market value for equivalent purchases. A manufacturer shall be deemed a qualifying manufacturer for the purposes of this subsection if the following requirements are satisfied:
(a) the manufacturer has been in existence for 5 years or less, has its principal place of business in the State, is independently owned and operated, and employs fewer than 100 full-time employees;
(b) the manufacturer and its manufacturing facility are located in an area within the local unit that has been determined to be in need of redevelopment, pursuant to the "Local Redevelopment and Housing Law," P.L.1992, c.79 (C.40A:12A-1 et al.);
(c) the manufacturing facility is either newly constructed or substantially refurbished;
(d) the manufacturer was not a previous owner or tenant of the manufacturing facility;
(e) the manufacturer invests at least $1 million in the manufacturing facility; and
(f)the manufacturer has not received contracts negotiated and awarded by the governing body without public advertising for bids and bidding pursuant to this subsection over a 10-year period.
(cf: P.L.2005, c.296, s.1)
3. This act shall take effect immediately.
STATEMENT
This bill would permit local units to award public contracts to start-up manufacturers that make investments in struggling parts of the local unit without public advertising for bids and bidding, which is generally required under current law.
Many communities in the State continue to struggle with deteriorating physical conditions, economic stagnation or decline, and a lack of proper development. These communities are generally located in the most urbanized parts of the State, which are close to major transportation networks. This bill would provide local units with another tool to attract business investment in such hard-hit areas in order to help turn more communities around through neighborhood revitalization, job creation, and additional tax revenues. The bill's provisions are limited to new, small manufacturers in order to attract businesses with significant growth potential in a struggling sector of the economy. The bill would also provide environmental benefits through greater transportation efficiencies that would be realized from encouraging manufacturers to move closer to purchasers and major transportation networks.
For a contract to be awarded without public bidding under the bill, (1) a manufacturer would have to be a start-up business; (2) a manufacturer's offices and manufacturing facility would have to be located in an area within the local unit determined to be in need of redevelopment pursuant to the "Local Redevelopment and Housing Law," P.L.1992, c.79 (C.40A:12A-1 et al.); (3) the manufacturing facility would have to be either newly constructed or substantially refurbished; (4) the manufacturer may not have been a previous owner or tenant of the manufacturing facility; (5) the manufacturer would have to invest at least $1 million in the manufacturing facility; (6) the manufacturer may not have already been awarded 10 years' worth of such contracts without public bidding; and (7) the purchase price would have to be less than 15 percent over the fair market value for equivalent purchases.
