S1778

An Act requiring the State Treasurer to follow the usual procurement process prior to entering into cooperative purchasing agreements and amending P.L.1996, c.16.

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

1. 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 in the manner provided by this section. 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 and that the State’s commitment under the agreement shall not exceed two years. 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.

(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 and that the State’s commitment under the agreement shall not exceed two years. 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.

(3) Notwithstanding any other law to the contrary, any contracting unit authorized to purchase goods, or to contract for services, may make purchases and contract for services through the use of a nationally-recognized and accepted cooperative purchasing agreement that has been developed utilizing a competitive bidding process by another contracting unit within the State of New Jersey, or within any other state, when available. Prior to making purchases or contracting for services, the contracting unit shall determine that the use of the cooperative purchasing agreement shall result in cost savings after all factors, including charges for service, material, and delivery, have been considered.

(4) Prior to entering into an agreement pursuant to paragraphs (1) or (2) of this subsection, the director shall follow the procedures for the awarding of public contracts provided in P.L.1954, c.48 (C.52:34-6 et seq.), or the procedures in P.L.1983, c.482 (C.52:32-17 et seq.) if the director determines that the contract may appropriately be designated a small business set-aside contract, including procedures for the awarding of multi-source contracts. Upon opening the bids or reviewing the quotation of prices, the director shall make a determination as to whether to award the contract by that method or through a cooperative purchasing agreement and shall award the contract or enter into the cooperative purchasing agreement accordingly. If the director determines to award the contract through a cooperative purchasing agreement, all bids or price quotations previously submitted shall be void. A request for proposal issued pursuant to this paragraph shall clearly state that the director is considering whether to award the contract pursuant to a cooperative purchasing agreement and reserves the right to do so.

(5) The director shall not enter into a cooperative purchasing agreement unless for a continuous period of six months prior thereto the director has posted express written notice on the division’s Internet website that the director is considering making a particular purchase through such an agreement and published that notice at least monthly in a newspaper or newspapers with Statewide circulation.

For purposes of this paragraph, "contracting unit" means any county, municipality, special district, school district, fire district, state college or university, public research university, county college, or any board, commission, committee, authority or agency, which is not a State board, commission, committee, authority or agency, and which has administrative jurisdiction over any district, included or operating in whole or in part, within the territorial boundaries of any county or municipality which exercises functions which are appropriate for the exercise by one or more units of local government, and which has statutory power to make purchases and enter into contracts awarded by a contracting agent for the provision or performance of goods or services.

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.

(cf: P.L.2016, c.50, s.5)

2. This act shall take effect immediately.

STATEMENT

At present, the law authorizes the Director of the Division of Purchase and Property in the Department of the Treasury to purchase goods or services through cooperative purchasing agreements with other states or political subdivisions thereof and through contracts awarded pursuant to a nationally recognized and accepted cooperative agreement that has been developed using a competitive bidding process in which other states participate. In some cases, the use of agreements has caused contracts that were previously awarded to New Jersey businesses to be awarded instead to large national firms and has denied New Jersey businesses the opportunity to bid on these contracts.

This bill would address this situation by providing that prior to entering into such an agreement, the director would follow the usual procedures for the awarding of public contracts or, if the director deems it appropriate, the procedures for the awarding of small business set-aside contracts, including procedures for the awarding of multi-source contracts when appropriate. Upon opening the bids or reviewing the quotation of prices, the director would determine whether awarding the contract by that method would be the most cost-effective method of procurement and in the State’s best interest compared to making the purchase through a cooperative purchasing agreement and will award the contract or enter in to the cooperative purchasing agreement accordingly. If the director determines to award the contract through a cooperative purchasing agreement, all bids or price quotations previously submitted would be void. The bill would also provide that the State’s commitment under a cooperative purchasing agreement would not exceed two years. Therefore, even if the director chooses to use a cooperative purchasing agreement, the process established by the bill would give New Jersey businesses the opportunity to compete for a particular type of procurement every two years.

In addition, the bill provides that the director will not enter into a cooperative purchasing agreement unless for a continuous period of six months the director has posted express written notice on the division’s Internet website that the director is considering making a particular purchase through such an agreement and published that notice at least monthly in a newspaper or newspapers with Statewide circulation.