Bill Text: NJ A4586 | 2024-2025 | Regular Session | Introduced
Bill Title: Establishes "Minority and Women-Owned Businesses State Contractor Remedies Act."
Spectrum: Partisan Bill (Democrat 6-0)
Status: (Introduced) 2024-09-23 - Reported out of Asm. Comm. with Amendments, and Referred to Assembly Labor Committee [A4586 Detail]
Download: New_Jersey-2024-A4586-Introduced.html
Sponsored by:
Assemblywoman SHAVONDA E. SUMTER
District 35 (Bergen and Passaic)
SYNOPSIS
Establishes "Minority and Women-Owned Businesses State Contractor Remedies Act."
CURRENT VERSION OF TEXT
As introduced.
An Act establishing the "Minority and Women-Owned Businesses State Contractor Remedies Act"; revising various parts of the statutory law and supplementing Title 52 of the Revised Statutes.
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. (New section) Sections 1 through 4 of P.L. , c. (C. ) (pending before the Legislature as this bill) shall be known and may be cited as the "Minority and Women-Owned Businesses State Contractor Remedies Act."
2. (New section) The Legislature finds and declares that:
a. In 1985, the Legislature passed the "Set-Aside Act for Small Businesses, Female Businesses, and Minority Businesses," P.L.1983, c.482 (C.52:32-17 et seq.), requiring that 15 percent of contracts be awarded to small businesses, seven percent to minority businesses, and three percent to women-owned businesses.
b. In 1989, the United States Supreme Court held in City of Richmond v. J.A. Croson Co. ("Croson"), 488 U.S. 469 (1989), that the City of Richmond's subcontractor set-aside program for minority businesses violated the Equal Protection Clause of the Constitution because it did not meet the Court's strict scrutiny standard.
c. Following the Croson decision, Governor Kean suspended portions of the Set-Aside Act because the State had not undertaken a thorough investigation confirming the existence of race and gender discrimination in State procurement.
d. In August 1989, Governor Kean issued Executive Order No. 213 establishing the Governor's Study Commission on Discrimination in Public Work Procurement and Construction Contracts and directed the Study Commission to "investigate the nature and scope of any discriminatory practices" and "prepare an analysis of this information in order to develop probative evidence of any prior to present discrimination."
e. The Study Commission released the State's first disparity study in 1993, with the statistical findings showing a disparity between contract dollars awarded and the availability of minority and women-owned firms available to provide goods and services, and the anecdotal findings showing a history of far-reaching discrimination in which the State passively participated.
f. Governor Florio issued Executive Order No. 84 in 1993 reinstituting the goals in the Set-Aside Act, requiring all State contracting agencies to adopt a set-aside program wherein they would make a good faith effort to award seven percent of public procurement and construction contracts to minority businesses and three percent to women-owned businesses.
g. In 2003, the Set-Aside Act was permanently enjoined in a Consent Decree entered by the federal district court in the matter of GEOD v. State of New Jersey, Civil Action No. 01-2656 (SRC) (D.N.J.), and following entry of the Consent Decree, Governor McGreevey issued Executive Order No. 71 (2003) eliminating set-aside goals for minority and women-owned businesses and instead instituting a race- and gender-neutral small business set-aside program.
h. In 2005, the State released an updated disparity study, and in 2006, Governor Corzine issued Executive Order No. 34, creating the Division of Minority and Women Business Development, tasking it with developing minority and women business utilization goals, based on the 1993 and 2005 disparity studies, and developing and implementing policies and programs aimed at meeting those goals through race-and gender-neutral means.
i. On January 23, 2024, the State released a comprehensive statewide disparity study examining public contracting opportunities for minority and women-owned businesses between 2015 and 2020.
j. Despite decades of a race- and gender-neutral small business set-aside program and other remedial measures, the study found statistically significant disparities in public contracting with minority and women-owned business enterprises including specifically in contracting with businesses owned by Black Americans, Asian Americans, and Hispanic Americans and women for formal prime contracts in construction, professional services, and goods and services and for informal prime contracts across all industries studied.
k. The State has a compelling interest in promoting markets free of discrimination to engage contractors and subcontractors for State contracts of all types, and thus to promote contracting with minority owned and women-owned businesses that are available and qualified to be State contractors and subcontractors.
l. It is the policy of the State to promote markets for all State contracts and subcontracts that are free from discrimination against women and minorities, and to encourage participation of minority and women-owned businesses as well as small businesses in all areas of State contracting.
m. In an effort to reduce barriers to participation by minority and women-owned businesses in State contracting, State agencies and prime contractors should be subject to defined criteria evidencing a good faith effort to increase participation by such businesses.
n. The contracting goals set forth in P.L. , c. (C. ) (pending before the Legislature as this bill) are established consistent with the findings of the New Jersey disparity study released in January of 2024 and are tailored to address the report's findings of significant statistical disparities in the State's contract awards.
3. (New section) As used in P.L. , c. (C. ) (pending before the Legislature as this bill):
"Asian American-owned business" means a business which has its principal place of business in the State, is independently owned and operated, and is a sole proprietorship owned and controlled by an Asian American male; a partnership or joint venture owned and controlled by Asian American males in which at least 51 percent of the ownership interest is held by Asian American males and the management and daily business operations of which are controlled by one or more of the Asian American males who own it; or a corporation or other entity whose management and daily business operations are controlled by one or more Asian American males who own it, and of which at least 51 percent of the legal beneficial ownership is held by one or more Asian American males.
"Black American-owned business" means a business which has its principal place of business in the State, is independently owned and operated, and is a sole proprietorship owned and controlled by a Black American male; a partnership or joint venture owned and controlled by Black American males in which at least 51 percent of the ownership interest is held by Black American males and the management and daily business operations of which are controlled by one or more of the Black American males who own it; or a corporation or other entity whose management and daily business operations are controlled by one or more Black American males who own it, and of which at least 51 percent of the legal beneficial ownership is held by one or more Black American males.
"Chief" means the Chief Diversity Officer established in the Department of the Treasury pursuant to section 1 of P.L.2017, c.95 (C.52:32-18.1).
"Department" means the Department of the Treasury.
"Construction contract" means a contract for erection, reconstruction, demolition, alteration, custom fabrication, repair work, or maintenance work, including painting and decorating, subject to the New Jersey Prevailing Wage Act, done under contract and funded in whole or in part with public funds or on the property or premises owned by the government entity.
"Goods and services contract" means a contract for commodities or services not otherwise defined as professional, architectural, or engineering.
"Hispanic American-owned business" means a business which has its principal place of business in the State, is independently owned and operated, and is a sole proprietorship owned and controlled by a Hispanic American male; a partnership or joint venture owned and controlled by Hispanic American males in which at least 51 percent of the ownership interest is held by Hispanic American males and the management and daily business operations of which are controlled by one or more of the Hispanic American males who own it; or a corporation or other entity whose management and daily business operations are controlled by one or more Hispanic American males who own it, and of which at least 51 percent of the legal beneficial ownership is held by one or more Hispanic American males.
"Minority" means a person who is a:
a. Black American, which means male and female persons having origins with the Black racial groups in Africa;
b. Hispanic American, which means male and female persons of Hispanic descent; or
c. Asian American, which means male and female persons having origins with racial groups in Asia.
"Minority-owned business" means a business which has its principal place of business in the State, is independently owned and operated, and is a sole proprietorship owned and controlled by a minority; a partnership or joint venture owned and controlled by minorities in which at least 51 percent of the ownership interest is held by minorities and the management and daily business operations of which are controlled by one or more of the minorities who own it; or a corporation or other entity whose management and daily business operations are controlled by one or more minorities who own it, and of which at least 51 percent of the legal beneficial ownership is held by one or more minorities.
"Women-owned business" means a business which has its principal place of business in the State, is independently owned and operated, and is a sole proprietorship owned and controlled by a Caucasian woman or minority woman; a partnership or joint venture owned and controlled by Caucasian women, minority women, or any combination thereof, in which at least 51 percent of the ownership is held by women and the management and daily business operations of which are controlled by one or more Caucasian or minority women who own it; or a corporation or other entity whose management and daily business operations are controlled by one or more Caucasian or minority women, or any combination thereof, who own it, and of which at least 51 percent of the legal beneficial ownership is held by Caucasian or minority women.
"Office" means the Office of Diversity and Inclusion.
"Professional services contract" means a contract for services performed by a person authorized and regulated by law to practice a recognized profession that requires advanced knowledge in a field of learning acquired by a prolonged formal course of specialized instruction and study. Professional services are rendered in: the provision of goods, original and creative in a recognized field of artistic endeavor, and extraordinary, non-specifiable services if, after evaluation and assessment, it is determined cannot reasonably be described by written specifications.
"State agency" means any of the principal departments in the Executive Branch of the State Government, and any division, board, bureau, office, commission or other instrumentality within or created by such department and any independent State authority, commission, instrumentality or agency which is authorized by law to award contracts.
4. (New section) a. (1) All State agencies shall establish programs consistent with P.L. , c. (C. ) (pending before the Legislature as this bill) to facilitate the participation of minority-owned businesses and women-owned businesses. All State agencies shall develop a plan for the fiscal year next following the effective date of P.L. , c. (pending before the Legislature as this bill) and for each fiscal year thereafter to encourage minority-owned businesses and women-owned businesses to submit proposals for, and be awarded, contracts in accordance with P.L. , c. (C. ) (pending before the Legislature as this bill) and rules adopted by the State Treasurer pursuant thereto. Annually, within 180 calendar days of the end of each State fiscal year, a State agency shall file with the office, a report containing information requested by the Chief. The office shall receive and analyze these State agency reports and provide feedback to the submitting State agencies, as it deems necessary.
(i) at least 7.2 percent of their construction contracts for Black American-owned businesses, at least 7.44 percent of their construction subcontracts for Black American-owned businesses, at least 6.77 percent of their goods and services contracts for Black American-owned businesses, at least 7.75 percent of their professional services contracts for Black American-owned businesses, and at least 7.81 percent of their professional services subcontracts for Black American-owned businesses;
(ii) at least 5.37 percent of their construction contracts for Asian American-owned businesses, at least 6.87 percent of their construction subcontracts for Asian American-owned businesses, and at least 3.95 percent of their goods and services contracts for Asian American-owned businesses;
(iii) at least 10.14 percent of their construction contracts for Hispanic American-owned businesses, at least 6 percent of their goods and services contracts for Hispanic American-owned businesses, at least 4.05 percent of their professional services contracts for Hispanic American-owned businesses, and at least 7.31 percent of their professional services subcontracts for Hispanic American-owned businesses; and
(iv) at least 24.26 percent of their construction contracts for women-owned businesses, 5.73 percent of the construction subcontracts for women-owned businesses, at least 27.63 percent of their goods and services contracts for women-owned businesses, at least 37.59 percent of their professional services contracts for women-owned businesses; and at least 28.33 percent of their professional services subcontracts for women-owned businesses.
(b) Whenever there exists (i) a persuasive analysis that documents a statistically significant disparity between the availability and utilization of minority-owned businesses or (ii) a persuasive analysis that documents evidence of a statistically significant disparity between the availability and utilization of women-owned businesses, or (iii) an appropriate basis to set a goal for any other group of under-represented businesses, State agencies are authorized and encouraged to implement appropriate adjustments and additions to the goals set forth in subparagraph (a) of this paragraph to implement remedial measures consistent with prevailing law, as appropriate, and encourage the elimination of disparities between the award of contracts to minority and women-owned businesses and the availability of minority and women-owned businesses to perform such contracts. State agency-specific goals adopted pursuant to this subparagraph shall be based on the finding of the most recently completed State-sponsored disparity study analyzing the data of the State agency.
(3) (a) Each State agency shall make a good faith effort to attain the goals established in this section. Each State agency that substantially fails to make a good faith effort to achieve the goals set forth in subsection a. of this section in such agency's contracting shall be required to submit to the Chief, for approval, a remedial action plan to remedy such failure. If it is determined by the Chief that any State agency has failed to act in good faith to implement the remedial action plan, within one year, the Chief shall provide written notice of such a finding, which shall be made publicly available, and shall compel direct implementation of remedial actions, which may include but shall not be limited to:
(i) assuring that sufficient and effective solicitation efforts to minority and women-owned businesses are being made by the State agency;
(ii) dividing contract requirements, when economically feasible, into quantities that will expand the participation of minority and women-owned businesses;
(iii) eliminating extended experience or capitalization requirements, when programmatically and economically feasible, to expand participation by minority and women-owned businesses; and
(iv) other remedial actions determined appropriate by the Chief through rules adopted by the State Treasurer pursuant to the "Administrative Procedure Act" (P.L.1968, c.410 (C.52:14B-1 et seq.).
(b) Upon a finding by the Chief that a State agency has failed to take affirmative measures to implement the remedial plan and to follow any of the remedial actions set forth by the Chief, and in the absence of any objective progress towards the State agency's goals, the Chief may require some or all the State agency's procurement, for a specified period of time, be placed under the direction and control of another agency or agencies.
(4) A State agency's good faith effort to achieve the goals set forth in this section shall be evidenced by documentation showing that the State agency:
(a) considered structuring contracts in a manner to allow underutilized bidders to be able to compete for the State agency's contracts;
(b) conducted periodic opportunities for minority and women-owned businesses to learn of the State agency's general anticipated contract needs prior to advertisement independent of a published bid solicitation and to learn about the State agency's contracting practices and requirements;
(c) conducted periodic outreach to business associations representing minority and women-owned businesses to publicize the State agency's contracting opportunities;
(d) used the State's central certification registry or a similar dataset to identify and notify all listed minority and women-owned businesses in the relevant market of the opportunity to submit a bid for a contract subject to goals for which the respective businesses qualify; and
(e) took other actions determined appropriate by the Chief through rules adopted by the State Treasurer pursuant to the "Administrative Procedure Act" (P.L.1968, c.410 (C.52:14B-1 et seq.).
b. For purposes of attaining the goals set forth in this section, State agencies may establish bid criteria for contracts or portions of contracts that result in a preference being afforded to minority-owned businesses or women-owned businesses, though the State agency may still award the contract to a bidder that is not a minority-owned business or women-owned business. The goals established in subsection a. of this section shall not be required to be attained independently and may be attained through contracts awarded to businesses that qualify as minority-owned businesses or women-owned businesses and may count towards more than one goal.
c. In setting and achieving the goals set forth in this section, a State agency shall:
(1) consult the findings contained within the disparity study evidencing relevant industry-specific disparities in the utilization of minority and women-owned businesses relative to their availability or conduct another disparity study and consult the findings therein;
(2) implement a program that will enable the State agency to evaluate each contract to determine the appropriate goal for participation by minority and women-owned businesses;
(3) consider where practicable, the severability of construction projects and other bundled contracts;
(4) consider compliance with the requirements of any federal law concerning opportunities for minority and women-owned businesses which effectuates the purpose of this section. The State agency shall determine whether the imposition of the requirements of any such law duplicate or conflict with the provisions hereof and if such duplication or conflict exists, the State agency shall waive the applicability of this section to the extent of such duplication or conflict; and
(5) take any other action that the Chief determines to be appropriate in rules adopted by the State Treasurer.
d. (1) Each prime contractor shall make a good faith effort to attain the subcontractor goals established in this section. For purposes of determining a contractor's good faith effort to comply with the subcontracting requirements of this section, the State agency shall consider:
(a) whether the contractor has advertised the opportunity to, or otherwise made minority and women-owned business aware of the opportunity, in such event, (i) whether minority-owned businesses and women-owned businesses exhibited interest in working with the contractor on a particular project by attending, or having attended, a pre-bid conference, if any, scheduled by the State agency awarding the contract; and (ii) whether minority and women-owned businesses, which have been solicited by the contractor, have responded in a timely fashion to the contractor's request to engage minority and women-owned businesses prior to the State agency's bid date;
(b) whether the contractor provided timely written notification of subcontracting opportunities on the contract to appropriate minority and women-owned businesses that appear in the State's central contractor registry which lists businesses certified as eligible to perform contracts under any State program;
(c) whether the contractor can reasonably structure the amount of work to be performed under subcontracts to increase the likelihood of participation by minority and women-owned businesses; and
(d) whether other actions determined appropriate by the Chief through rules adopted by the State Treasurer pursuant to the "Administrative Procedure Act" (P.L.1968, c.410 (C.52:14B-1 et seq.), were taken.
(2) Failure on the part of a contractor to demonstrate a good faith effort may be grounds for the rejection of bids made by that contractor on the contract for which the contractor is required to make a good faith effort to comply with the subcontracting requirements of this section.
5. Section 3 of P.L.1987, c.318 (C.5:10-21.1a) is amended to read as follows:
3. The authority is authorized and directed to establish, prior to initiating any project on or after the effective date of this 1987 amendatory and supplementary act, small business [, minority business and women's business] set-aside contract goals and procedures in accordance with the provisions of the "Set-Aside Act for Small Businesses [, Female Businesses, and Minority Businesses], " P.L. 1983, c. 482 (C.52:32-17 et seq.).
(cf: P.L.1987, c.318, s.3)
6. Section 1 of P.L.1983, c.482 (C.52:32-17) is amended to read as follows:
1. [This act] P.L.1983, c.482 (C.52:32-17 et seq.) shall be known and may be cited as the "Set-Aside Act for Small Businesses [, Female Businesses, and Minority Businesses]."
(cf: P.L.1985, c.384, s.2)
7. Section 2 of P.L.1983, c.482 (C.52:32-18) is amended to read as follows:
2. The Legislature declares that the existence of a strong and healthy free enterprise system is directly related to the well-being and competitive strength of small business [, female business and minority business] concerns and to the opportunity for a small business [, female business and minority business] to have free entry into business, to grow and to expand; and finds that the State must ensure that a fair proportion of the State's total purchases and contracts for construction, property and services is placed with small business [, female business and minority business] concerns.
(cf: P.L.1985, c.384, s.3)
8. Section 3 of P.L.1983, c.482 (C.52:32-19) is amended to read as follows:
3. As used in [this act] P.L.1983, c.482 (C.52:32-17 et seq.):
a. "[Contracting] State agency" means [the] any of the principal departments in the Executive Branch of the State [or] Government, and any division, bureau, office, board, commission, [committee,] or other instrumentality within or created by such department, and any independent State authority, commission, instrumentality, or agency [of the State] which is authorized by law to award contracts.
b. "Chief" means the Chief [of the Office of Small Business Assistance when used in conjunction with the small business and female business set-aside programs, or the Chief of the Office of Minority Business Enterprise when used in conjunction with the minority business set-aside program] Diversity Officer established in the Department of the Treasury pursuant to section 1 of P.L.2017, c.95 (C.52:32-18.1).
c. "Department" means the Department of [Commerce and Economic Development] the Treasury.
d. "Office" means the [Office of Small Business Assistance in the Department of Commerce and Economic Development when used in conjunction with the small business and female business set-aside programs, or the Office of Minority Business Enterprise when used in conjunction with the minority business set-aside program] Office of Diversity and Inclusion.
e. "Small business" means a business which has its principal place of business in the State, is independently owned and operated and meets all other qualifications as may be established in accordance with [P.L. 1981, c. 283 (C. 52:27H-21.1 et seq.)] P.L.1987, c.55 (C.52:27H-21.8).
f. "Small business set-aside contract" means (1) a contract for goods, equipment, construction or services which is designated as a contract with respect to which bids are invited and accepted only from small businesses, or (2) a portion of a contract when that portion has been so designated.
g. ["Minority business" means a business which has its principal place of business in the State, is independently owned and operated and at least 51% of which is owned and controlled by persons who are black, Hispanic, Portuguese, Asian-American, American Indian or Alaskan natives.] (Deleted by amendment, P.L. , c. ) (pending before the Legislature as this bill)
h. ["Minority business set-aside contract" means (1) a contract for goods, equipment, construction or services which is designated as a contract with respect to which bids are invited and accepted only from minority businesses; or (2) a portion of a contract when that portion is so designated.] (Deleted by amendment, P.L. , c. ) (pending before the Legislature as this bill)
i. ["Female business" means a business which has its principal place of business in the State, is independently owned and operated and at least 51% of which is owned and controlled by women.] (Deleted by amendment, P.L. , c. ) (pending before the Legislature as this bill)
j. ["Female business set-aside contract" means (1) a contract for goods, equipment, construction or services which is designated as a contract with respect to which bids are invited and accepted only from female businesses; or (2) a portion of a contract when that portion is so designated.] (Deleted by amendment, P.L. , c. ) (pending before the Legislature as this bill).
(cf: P.L.1985, c.384, s.4)
9. Section 4 of P.L.1983, c.482 (C.52:32-20) is amended to read as follows:
4. a. Notwithstanding the provisions of any State bidding or public contracts laws to the contrary, but subject to any supervening federal statutes or rules, [contracting] State agencies, in consultation with the department, may designate a contract, or a portion thereof, for goods, equipment, construction or services to be awarded by a [contracting] State agency as a small business [, female business or minority business] set-aside contract pursuant to the goals and procedures established by [this 1985 amendatory act] P.L.1983, c.482 (C.52:32-17 et seq.), whenever there is a reasonable expectation that bids may be obtained from at least three qualified small businesses [, female businesses or minority businesses] capable of furnishing the desired goods, equipment, construction or services at a fair and reasonable price. The designation shall be made prior to the advertisement for bids.
b. Where application of the goals and procedures established under [this act] P.L.1983, c.482 (C.52:32-17 et seq.) would jeopardize the State's participation in a program from which the State receives federal funds or other benefits, the [contracting] State agency may, in consultation with the department, withdraw the affected contracts from consideration or calculation.
(cf: P.L.1985, c.384, s.5)
10. Section 5 of P.L.1983, c.482 (C.52:32-21) is amended to read as follows:
5. a. There [are] is established the [goals] goal that [contracting] State agencies award at least [15%] 25 percent of their contracts for small businesses [, at least 7% of their contracts for minority businesses and at least 3% of their contracts for female businesses]. [These goals] This goal may, where appropriate, be attained by the direct designation of prime contracts for a small business [, minority business or female business] or, in the case of a prime contract not directly designated for a small business [, minority business or female business], by requiring that a portion of such a prime contract be subcontracted to a small business [, minority business or female business]. Each [contracting] State agency shall make a good faith effort to attain the goals established in this section.
b. [The goals established in subsection a. of this section shall be attained independently of each other, and any given contract may be counted for purposes of attaining the small business goal, the minority business goal, or the female business goal, but not towards more than one goal. Pursuant to the goals established by this act, a total of at least 25% of the State's procurement contracts shall be awarded to small businesses, minority businesses, and female businesses.] (Deleted by amendment, P.L. , c. ) (pending before the Legislature as this bill)
c. For purposes of attaining [these goals] this goal, [contracting] State agencies shall, when necessary, specifically set aside contracts or portions of contracts for which only small businesses [, minority businesses or female businesses] may bid.
(cf: P.L.1985, c.384, s.6)
11. Section 6 of P.L.1983, c.482 (C.52:32-22) is amended to read as follows:
6. If the department and the [contracting] State agency disagree as to whether a set-aside is appropriate for a contract or a portion of a contract, the dispute shall, within seven days, be submitted to the State Treasurer, or his designee, for final determination.
(cf: P.L.1985, c.384, s.7)
12. Section 7 of P.L.1983, c.482 (C.52:32-23) is amended to read as follows:
7. The advertisement for bids on a set-aside contract shall indicate the invitation to bid as a set-aside. The advertisement shall be made in such [newspaper or newspapers as will best give notice thereof] manner to best give notice to appropriate bidders and shall be sufficiently in advance of the purchase or contract to promote competitive bidding among those businesses for whom the contract is being set aside. The newspaper or newspapers in which the advertisement shall appear shall be selected by the [contracting] State agency in consultation with the office. The advertisement shall designate the time and place at which sealed proposals shall be received and publicly opened and read, the amount of the cash or certified check, if any, which shall accompany each bid and such other items as the [contracting] State agency may deem proper. The advertisement shall be made by that [contracting] State agency pursuant to the procedure set forth in the law governing State contracts, where this act is inconsistent with that law.
(cf: P.L.1985, c.384, s.8)
13. Section 8 of P.L.1983, c.482 (C.52:32-24) is amended to read as follows:
8. a. The department shall establish reasonable regulations appropriate for controlling the designation of prospective small business bidders [, minority business bidders and female business bidders] and shall maintain lists of designated businesses.
b. The department shall establish a procedure whereby businesses may request inclusion on appropriate lists for small businesses [, minority businesses and female businesses].
c. The department shall establish a procedure for annually reviewing the lists and determining whether the businesses on the lists shall continue to be designated as small businesses [, minority businesses and female businesses].
d. The department shall establish a procedure whereby the designation of a business as a small business [, minority business or female business] may be challenged by a third party.
e. Any procedures established pursuant to subsections b., c., and d. of this section shall include notice to the business whose designation is at issue and an opportunity for a hearing at the department. The hearing shall not be considered a contested case under the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.).
(cf: P.L.1985, c.384, s.9)
14. Section 9 of P.L.1983, c.482 (C.52:32-25) is amended to read as follows:
9. When a contract or portion thereof has been designated as a set-aside, invitations for bids shall be confined to businesses designated by the department as appropriate for the set-aside and bids from other bidders shall be rejected; provided, however, if no bids are received from businesses designated by the department as appropriate for the set-aside, then the contract may be awarded to another business. The purchase, contract or expenditure of funds shall be awarded among the businesses, considering formality with specifications and terms, in accordance with the statutes and rules governing purchases by the [contracting] State agency. The award shall be made with reasonable promptness by the [contracting] State agency with written notice to the department.
(cf: P.L.1985, c.384, s.10)
15. Section 10 of P.L.1983, c.482 (C.52:32-26) is amended to read as follows:
10. If the [contracting] State agency determines that the acceptance of the lowest responsible bid on a set-aside contract will result either in the payment of an unreasonable price or in a contract otherwise unacceptable pursuant to the statutes and rules governing purchases by that agency, the [contracting] State agency shall reject all bids and withdraw the designation of the set-aside contract. Bidders shall be notified of the set-aside cancellation, the reasons for the rejection and the State's intent to resolicit bids on an unrestricted basis. The canceled solicitation shall not be counted as a set-aside for the purpose of attaining established set-aside goals. Except in cases of emergency, prior to the final award of the contract, the [contracting] State agency shall provide an opportunity for a hearing on the reasons for the rejection of the set-aside designation. Such hearing may be in-person or on the written record at the discretion of the State agency. This hearing shall not be considered a contested case under the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.).
(cf: P.L.1985, c.384, s.11)
16. Section 11 of P.L.1983, c.482 (C.52:32-27) is amended to read as follows:
11. Each [contracting] State agency shall submit an annual report to the department according to a schedule announced by the department. This report shall include the following information:
a. The total dollar value and number of contracts awarded to small businesses, minority businesses and female businesses, including a separate accounting of any set-aside contracts, and the percentage of the total State procurements by the [contracting] State agency the figure of total dollar value and the number of set-asides reflect;
b. The types and sizes of businesses receiving set-aside awards and the nature of the purchases and contracts; and
c. The efforts made to publicize and promote the program.
The department shall receive and analyze the reports submitted by the [contracting] State agencies and, utilizing these data, submit an annual report to the Governor and the Legislature showing the progress being made toward the objectives and goals of this act during the preceding fiscal year.
(cf: P.L.1985, c.384, s.12)
17. Section 12 of P.L.1983, c.482 (C.52:32-28) is amended to read as follows:
12. Each [contracting] State agency shall annually develop, in consultation with the department, a plan for achieving its small business[, minority business and female business goals] goal.
(cf: P.L.1985, c.384, s.13)
18. Section 14 of P.L.1983, c.482 (C.52:32-30) is amended to read as follows:
14. Where the department determines that a business has been classified as a small business [, minority business or female business] on the basis of false information knowingly supplied by the business and has been awarded a contract to which it would not otherwise have been entitled under [this act] P.L.1983, c.482 (C.52:32-17 et seq.), the department shall:
a. Assess the business any difference between the contract amount and what the State's cost would have been if the contract had not been awarded in accordance with the provisions of [this act] P.L.1983, c.482 (C.52:32-17 et seq.);
b. In addition to the amount due under subsection a., assess the business a penalty in an amount of not more than [10%] 10 percent of the amount of the contract involved;
c. Order the business ineligible to transact any business with the State for a period of not less than three months and not more than 24 months; and
d. Prior to any final determination, assessment or order under this section, afford the business an opportunity for a contested case hearing pursuant to P.L.1968, c.410 (C.52:14B-1 et seq.).
All payments to the State pursuant
to subsection a. of this section shall be deposited in the fund out of which the
contract involved was awarded. All payments to the State pursuant to subsection
b. of this
section shall be deposited in the General State Fund.
(cf: P.L.1985, c.384, s.14)
19. Section 3 of P.L.2023, c.300 (C.52:32-31.17) is amended to read as follows:
3. a. (1) The department shall establish [contracting] State agency procurement goals of at least 30 percent for contracting with qualified business enterprises in the awarding of contracts. These goals may, where appropriate, be attained by the direct designation of prime contracts for qualified business enterprises or by subcontracting, and in accordance with and supported by available data and information. Each [contracting] State agency shall make a good faith effort to attain the goals established in this section.
(2) The department shall develop a process for evaluating and adjusting goals to determine what adjustments are necessary to achieve participation goals.
b. Each [contracting] State agency shall annually develop, in consultation with the department, a plan for achieving its qualified business enterprise goals.
(cf: P.L.2023, c.300, s.3)
20. (New section) Notwithstanding the provisions of the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.) to the contrary, the State Treasurer may adopt, immediately, upon filing with the Office of Administrative Law, such rules and regulations as the State Treasurer deems necessary to implement the provisions of sections of P.L. , c. (C. ) (pending before the Legislature as this bill), which rules and regulations shall be effective for a period not to exceed 365 days after the date of the filing. Before the expiration of the rules and regulations, the State Treasurer shall amend, adopt, or readopt the rules and regulations in accordance with the requirements of the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.).
21. (New section) The provisions of P.L. , c. (C. ) (pending before the Legislature as this bill), shall be severable, and if any of its provisions shall be held to be unconstitutional, the decision of the court shall not affect the validity of the remaining provisions of this act.
22. Section 1 of P.L.1995, c.39 (C.52:32-22.1) and section 4 of P.L.2011, c.147 (C.52:32-52) and are repealed.
23. This act shall take
effect immediately and shall apply to contracts awarded on and after the 181st day
next following the date of enactment.
STATEMENT
This bill establishes the "Minority and Women-Owned Businesses State Contractor Remedies Act," amends the "Set-Aside Act for Small Businesses, Female Businesses, and Minority Businesses," and repeals various sections of the statutory law.
The "Minority and Women-Owned Businesses State Contractor Remedies Act" establishes a new process for determining preference in awarding State agency contracts. State agencies are required to develop a plan for the fiscal year following the effective date of the bill and each fiscal year thereafter to encourage minority and women-owned businesses to submit proposals and encourage the awarding of contracts to those businesses. The bill establishes contract utilization goals for all State agencies based on the New Jersey Disparity Study on the Availability and Utilization of Small, Minority, Women, and Service-Disabled Veteran-Owned Businesses published in January of 2024. The State agency may adjust the percentages based on persuasive analysis that documents a statistically significant disparity between the availability and utilization of minority and women-owned businesses. In an effort to achieve the goals, the agency may establish bid criteria for contracts that result in a preference being afforded to minority and women-owned businesses.
State agencies are required to make a good faith effort to attain the goals set forth in the bill. If the agency fails to make a good faith effort, a remedial action plan will be submitted to the Chief Diversity Officer. If it is determined by the Chief that the agency did not act in good faith to implement the remedial action plan within one year, the Chief may make the remedial action plan public to encourage implementation. If implementation still does not occur, the Chief may require that some or all of the agency's procurement be placed under the direction and control of another agency. Prime contractors are also required to make a good faith effort to attain the subcontractor goals set forth in the bill. Failure by a prime contractor to demonstrate a good faith effort may result in grounds for rejection of bids made by the prime contractor.
The bill amends the "Set-Aside Act for Small Businesses, Female Businesses, and Minority Businesses" to only be applicable to small businesses by removing mentions of female and minority-owned businesses. The bill shifts chief, office, and departmental duties from the Chief of the Office of Small Business Assistance, the Office of Small Business Assistance, and the Department of Commerce and Economic Development to the Chief Diversity Officer, the Office of Diversity and Inclusion, and the Department of the Treasury. The bill changes the set-aside goals for small businesses from 15 percent to 25 percent and removes goals for minority and women-owned businesses.
The bill establishes a goal that State agencies award at least 30 percent of their contracts to socially and economically disadvantaged businesses.
The bill repeals the law establishing compliance calculations for contracting agencies awarding contracts to minority or women-owned businesses, P.L.1995, c.39 (C.52:32-22.1), and repeals the law establishing the goal of giving due consideration to veteran-owned businesses and the requirement that strategies be identified to expand the number of veteran-owned businesses interested in and eligible to benefit from State procurement, P.L.2011, c.147 (C.52:32-52).
