A2578

An Act concerning purchasing requirements for the State, certain State authorities and local government units and amending P.L.1971, c.198 and P.L.1996, c.16.

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

1. Section 12 of P.L.1971, c.198 (C.40A:11-12) is amended to read as follows:

12. a. (1) Any contracting unit under this act may without advertising for bids, or having rejected all bids obtained pursuant to advertising therefor, purchase any goods or services under any contract or contracts for such goods or services entered into on behalf of the State by the Division of Purchase and Property in the Department of the Treasury.

(2) A contracting unit, as defined in section 2 of P.L.1971, c.198 (C.40A:11-2), may without advertising for bids, or having rejected all bids obtained pursuant to advertising therefor, purchase any goods or services at a procurement price that isat least 10 percent below the price of equivalent goods or services under contracts entered into on behalf of the State by the Division of Purchase and Property in the Department of the Treasury, provided the vendor meets all other State contracting standards.

b. A contracting unit may also use, without advertising for bids, or having rejected all bids obtained pursuant to advertising, the Federal Supply Schedules of the General Services Administration or schedules from other federal procurement programs promulgated by the Director of the Division of Purchase and Property in the Department of the Treasury pursuant to section 1 of P.L.1996, c.16 (C.52:34-6.1), subject to the following conditions:

(1) the price of the goods or services being procured is no greater than the price offered to federal agencies;

(2) (Deleted by amendment, P.L.2006, c.10;

(3) the contracting unit receives the benefit of federally mandated price reductions during the term of the contract;

(4) the price of the goods or services being procured is no greater than the price of the same or equivalent goods or services under the State contract, unless the contracting unit determines that because of factors other than price, selection of a vendor from the Federal Supply Schedules or schedules from other federal procurement programs would be more advantageous to the contracting unit;

(5) a copy of the purchase order relating to any such contract, the requisition or request for purchase order, if applicable, and documentation identifying the price of the goods or services under the Federal Supply Schedules or schedules from other federal procurement programs shall be filed with the Director of the Division of Purchase and Property in the Department of the Treasury within five working days of the award of any such contract by the contracting unit.

c. Whenever a purchase is made, the contracting unit shall place its order with the vendor offering the lowest price, including delivery charges, that best meets the requirements of the contracting unit. Prior to placing such an order, the contracting unit shall document with specificity that the goods or services selected best meet the requirements of the contracting unit.

(cf: P.L.2006, c.10, s.4)

2. Section 7 of P.L.1996, c.16 (C.52:34-6.2) is amended to read as follows:

7. a. Notwithstanding the provisions of any other law to the contrary except the provisions of R.S.30:4-95, and as an alternative to the procedures concerning the awarding of public contracts provided in P.L.1954, c.48 (C.52:34-6 et seq.), the Director of the Division of Purchase and Property in the Department of the Treasury may enter into cooperative purchasing agreements with one or more other states, or political subdivisions thereof, for the purchase of goods and services. A cooperative purchasing agreement shall allow the jurisdictions which are parties thereto to standardize and combine their requirements for the purchase of a particular good or service into a single contract solicitation which shall be competitively bid and awarded by one of the jurisdictions on behalf of jurisdictions participating in the contract.

b. (1) The director may elect to purchase goods or services through a contract awarded pursuant to a cooperative purchasing agreement whenever the director determines this to be the most cost-effective method of procurement. Prior to entering into any contract to be awarded or already awarded through a cooperative purchasing agreement, the director shall review and approve the specifications and proposed terms and conditions of the contract. If it is revealed upon such review that the cooperative purchasing agreement is more than 18 months old, then the director shall utilize a competitive bidding process pursuant to Title 52 of the Revised Statutes for the goods or services, and shall contact at least three local vendors by phone, fax, or e-mail, to solicit their participation in the competitive bidding process, provided that the competitive bid selected meets all State contracting standards.

(2) The director may also elect to purchase goods or services through a contract awarded pursuant to a nationally-recognized and accepted cooperative purchasing agreement that has been developed utilizing a competitive bidding process, in which other states participate, whenever the director determines this to be the most cost-effective method of procurement. Prior to entering into any contract to be awarded through a nationally-recognized and accepted cooperative purchasing agreement that has been developed utilizing a competitive bidding process, the director shall review and approve the specifications and proposed terms and conditions of the contract. If it is revealed upon such review that the cooperative purchasing agreement is more than 18 months old, then the director shall utilize a competitive bidding process pursuant to Title 52 of the Revised Statutes for the goods or services, and shall contact at least three local vendors by phone, fax, or e-mail, to solicit their participation in the competitive bidding process, provided that the competitive bid selected meets all State contracting standards.

c. The director may solicit bids and award contracts on behalf of this State and other jurisdictions which are parties to a cooperative purchasing agreement provided that the agreement specifies that each jurisdiction participating in a contract is solely responsible for the payment of the purchase price and cost of purchases made by it under the terms of any contract awarded pursuant to the agreement.

d. The director may promulgate rules and regulations pursuant to the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.), which are necessary to effectuate the purposes of this section.

e. Prior to entering into any contract to be awarded or already awarded through a cooperative purchasing agreement or through a nationally recognized and accepted cooperative purchasing agreement that has been developed utilizing a competitive bidding process, the director shall conduct, and the State Treasurer shall review and approve, an economic impact analysis to determine the impact of entering into the contract through the cooperative purchasing agreement on the economy, employment, and small businesses in this State. The economic impact analysis shall demonstrate that the cost savings outweigh any adverse impact on the economy, employment, and small businesses in this State and that competitive pricing and products cannot be obtained through a competitive process in this State. Notice of the analysis shall be published in the New Jersey Register and posted on the website of the Division of Purchase and Property in the Department of the Treasury for public review no fewer than 30 days before the director enters into a contract through a cooperative purchasing agreement.

(cf: P.L.2005, c.336, s.13)

3. Section 2 of P.L.1996, c.16 (C.52:34-6.3)is amended to read as follows:

2. a. Notwithstanding the provisions of any other law to the contrary, the State authorities authorized to contract independently under various provisions of State law may also use, without advertising for bids, or having rejected all bids obtained pursuant to advertising, the Federal Supply Schedules of the General Services Administration or schedules from other federal procurement programs, promulgated by the Director of the Division of Purchase and Property in the Department of the Treasury pursuant to section 1 of P.L.1996, c.16 (C.52:34-6.1), subject to the following conditions:

(1) the price of the goods or services being procured is no greater than the price offered to federal agencies;

(2) (Deleted by amendment, P.L.2006, c.10);

(3) the authority receives the benefit of federally mandated price reductions during the term of the contract;

(4) the price of the goods or services being procured is no greater than the price of the same or equivalent goods or services under the State contract, unless the authority determines that because of factors other than price, selection of a vendor from the Federal Supply Schedules or schedules from other federal procurement programs would be more advantageous to the authority;

(5) a copy of the purchase order relating to any such contract, the requisition or request for purchase order, if applicable, and documentation identifying the price of the goods or services under the Federal Supply Schedules or schedules from other federal procurement programs shall be filed with the State Treasurer within five working days of the award of any such contract by the authority. The authority shall make available to the State Treasurer upon request any other documents relating to the solicitation and award of the contract.

b. State authorities authorized to contract independently under various provisions of State law may also, without advertising for bids, or having rejected all bids obtained pursuant to advertising, purchase any goods or services at a procurement price that is at least 10 percent below the price of equivalent goods or services under contracts entered into on behalf of the State by the Division of Purchase and Property in the Department of the Treasury, provided that the vendor complies with all State contracting standards. Prior to making a purchase without advertising for bids or after rejecting all bids, pursuant to the authority of this subsection, the State authority shall document with specificity that the goods or services selected best meet the requirements of the State authority.

(cf: P.L.2006, c.10, s.5)

4. This act shall take effect immediately.

STATEMENT

This bill authorizes certain State authorities and local and county governments to purchase goods or services without advertising for bids if the price is below the price for which equivalent goods or services may be purchased under a State contract. Under the bill, a successful bid received by a local unit must be at least 10% below the cost of the item or service under contracts entered into on behalf of the State through the Division of Purchase and Property in the Department of the Treasury, and a vendor who receives a contract pursuant to the bill must meet all State contracting standards.

The bill also modifies the process for purchasing goods or services under a nationally-recognized and accepted cooperative purchasing agreement or a cooperative purchasing agreement entered into with one or more states by requiring the director of the Division of Purchase and Property to utilize a competitive bidding process whenever the cooperative purchasing agreement is more than 18 months old and by requiring the director to contact and solicit bids from at least three local vendors. The bill requires the director to conduct, and publish, an economic impact analysis prior to entering into any contract awarded as a result of a cooperative purchasing agreement.