S2984

An Act creating a State contract set-aside for businesses owned and operated by spouses of military service members, and supplementing Title 52 of the Revised Statutes.

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

1. This act shall be known and may be cited as the "Set-Aside Act for Businesses Owned by Military Spouses."

2. As used in this act:

"Contracting agency" means the State or any board, commission, committee, authority or agency of the State.

"Department" means the Department of the Treasury.

"Businesses owned by military spouses" means a business which has its principal place of business in the State, is independently owned and operated, and at least 51 percent of which is owned and controlled by persons who are military spouses.

"Businesses owned by military spouses set-aside contract" means 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 military-spouse owned businesses, or a portion of a contract when that portion has been so designated.

“Military spouse" means a resident of this State whose spouse is an active duty member of any branch of the Armed Forces of the United States or a Reserve component thereof.

3. The Department of the Treasury shall administer a military-spouse owned business set-aside program which shall be in addition to any other set-aside program established by law. The department shall require proof of marital status and military service for all appropriate individuals. The proof shall include, but not be limited to, a copy of a marriage certificate and deployment orders issued by the federal government, as appropriate.

4. a. Notwithstanding the provisions of any State bidding or public contracts laws to the contrary, but subject to any superceding federal statutes or rules, contracting 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 agency as a military-spouse owned business set-aside contract pursuant to the goals and procedures established in this act, whenever there is a reasonable expectation that bids may be obtained from at least three qualified military-spouse owned 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. When application of the goals and procedures established under this act would jeopardize the State's participation in a program from which the State receives federal funds or other benefits, the contracting agency may, in consultation with the department, withdraw the affected contracts from consideration or calculation.

5. a. There are established the goals that contracting agencies award at least 3 percent of their contracts to military-spouse owned businesses. These goals may, when appropriate, be attained by the direct designation of prime contracts for these business or, in the case of a prime contract not directly so designated, by requiring that a portion of such a prime contract be subcontracted to a military-spouse owned business. Each contracting agency shall make a good faith effort to attain the goals established in this subsection.

b. For purposes of attaining this goal, contracting agencies shall, when necessary, specifically set aside contracts or portions of contracts for which only these businesses may bid.

c. If the department and the contracting 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 a designee, for final determination.

6. a. Each contracting agency shall annually develop, in consultation with the department, a plan for achieving its military-spouse owned business goals.

b. The department shall consult regularly with representatives of the contracting industry for the purpose of implementing the provisions of this act. These consultations shall take place no less than once every six months.

7. The advertisement for bids on a military-spouse owned business set-aside contract shall indicate the invitation to bid as a set-aside. The advertisement shall be in such newspaper or newspapers as will best give notice thereof to appropriate bidders and shall be sufficiently in advance of the purchase or contract to promote competitive bidding among the businesses for which the contract is being set aside. The newspaper or newspapers in which the advertisement shall appear shall be selected by the contracting agency in consultation with the department. 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 agency may deem proper. The advertisement shall be made by that contracting agency pursuant to the procedure set forth in the law governing State contracts, when this act is inconsistent with that law.

8. a. The department shall establish reasonable regulations appropriate for controlling the designation of prospective military-spouse owned 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 military-spouse owned 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 military-spouse owned businesses.

d. The department shall establish a procedure whereby the designation of a business as a military-spouse owned 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.).

9. When a contract or portion thereof has been designated as a military-spouse owned business 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. The purchase, contract, or expenditure of funds shall be awarded among the businesses, considering conformity with specifications and terms, in accordance with the statutes and rules governing purchases by the contracting agency. The award shall be made with reasonable promptness by the contracting agency with written notice to the department.

10. If the contracting agency determines that the acceptance of the lowest responsible bid on a military-spouse owned business 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 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 agency shall provide an opportunity for a hearing on the reasons for the rejection of the set-aside designation. 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.).

11. Each contracting 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 military-spouse owned businesses, including a separate accounting of any set-aside contracts, and the percentage of the total State procurements by the contracting agency that 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 agencies and, utilizing this data, submit an annual report to the Governor, and the Legislature pursuant to section 2 of P.L.1991, c.164 (C.52:14-19.1), showing the progress being made toward the objectives and goals of this act during the preceding fiscal year.

12. When the department determines that a business has been classified as a military-spouse owned 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, 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;

b. in addition to the amount due under subsection a. of this section, assess the business a penalty in an amount of not more than 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 Fund.

13. This act shall take effect immediately.

STATEMENT

This bill creates a State contract set-aside for businesses owned and operated by spouses of military service members.

Under the bill, "businesses owned by military spouses" means a business which has its principal place of business in the State, is independently owned and operated, and at least 51 percent is owned and controlled by persons who are military spouses. “Military spouse" means a resident of this State whose spouse is an active duty member of any branch of the Armed Forces of the United States or a Reserve component thereof.

The Department of the Treasury will administer the program. The department will require proof of marital status and military service for all appropriate individuals. The proof of status will include, but not be limited to, a copy of a marriage certificate and deployment orders as issued by the federal government.

There are established the goals that contracting agencies award at least 3 percent of their contracts to military-spouse owned businesses. Each contracting agency will annually develop, in consultation with the department, a plan for achieving its military-spouse owned business goals

The department will establish reasonable regulations appropriate for controlling the designation of prospective military-spouse owned business bidders and will maintain lists of designated businesses. The department will also establish a procedure whereby businesses may request inclusion on appropriate lists for military-spouse owned businesses, and a procedure for annually reviewing the lists and determining whether the businesses on the lists should continue to be designated as military-spouse owned businesses.

The department will assess penalties if it determines that a business has been classified as a military-spouse owned business on the basis of false information knowingly supplied by the business, and been awarded a contract to which it would not otherwise have been entitled. Any assessed penalties will be deposited in the General Fund.