S3654

An Act concerning the advertising threshold for State contracts and amending P.L.1954, c.48.

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

1. Section 2 of P.L.1954, c.48 (C.52:34-7) is amended to read as follows:

2. a. Any such purchase, contract or agreement may be made, negotiated, or awarded by the Director of the Division of Purchase and Property or the Director of the Division of [Building] Property Management and Construction, as the case may be, without advertising, in any manner which the director may deem effective to promote full and free competition whenever competition is practicable, if: (1) in the case of purchases for goods or services, the aggregate amount involved does not exceed $150,000 beginning on the effective date of P.L.2021, c.412, $200,000 beginning on January 1, 2023, and $250,000 beginning on January 1, 2024 and thereafter, or the amount determined pursuant to subsection b. of this section, whichever is greater; or (2) (Deleted by amendment, P.L.1985, c.107); or (3) the aggregate amount involved including labor and construction materials does not exceed [$25,000.00] $150,000 or the amount determined pursuant to subsection b. of this section in the case of contracts or agreements for the erection, construction, alteration, or repair of any public building or facility.

When the aggregate amount involved does not exceed the amount specified in paragraph (1) of subsection a. of this section, or the amount specified in paragraph (3) of subsection a. of this section or the amount determined pursuant to subsection b. of this section, the Director of the Division of Purchase and Property or the Director of the Division of [Building] Property Management and Construction may, at the director's discretion, delegate to the appropriate State department or using agency the director's authority to make, negotiate, or award a contract or agreement without advertising.

The Director of the Division of Purchase and Property or the Director of the Division of [Building] Property Management and Construction, as the case may be, shall establish, in accordance with the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.), rules and regulations concerning procedural requirements for the making, negotiating or awarding of purchases, contracts or agreements pursuant to this section, at the director's discretion.

b. The Governor, in consultation with the Department of the Treasury, shall, no later than March 1 of every fifth year beginning in the fifth year after the year in which P.L.1999, c.440 takes effect, adjust the threshold amount set forth in subsection a. of this section, or the threshold amount resulting from any adjustment under this subsection, in direct proportion to the rise or fall of the index rate as that term is defined in section 2 of P.L.1971, c.198 (C.40A:11-2), and shall round the adjustment to the nearest $1,000. The Governor shall, no later than June 1 of every fifth year, notify the Director of the Division of Purchase and Property and the Director of the Division of [Building] Property Management and Construction of the adjustment. The adjustment shall become effective on July 1 of the year in which it is made.

(cf: P.L.2021, c.412, s.2)

2. This act shall take effect immediately.

STATEMENT

This bill increases, from $25,000 to $150,000, the bid advertising threshold on certain State contracts.

This bill would allow smaller construction and repair projects under $150,000 to be informally bid by the using agency without full advertising thereby reducing the time and cost required to complete these smaller projects.

Under current law, any purchase, contract, or agreement may be made, negotiated, or awarded by the Director of the Division of Purchase and Property or the Director of the Division of Property Management and Construction without advertising if the aggregate amount involved including labor and construction materials does not exceed $25,000 or the amount adjusted by the Governor, in consultation with the Department of the Treasury as permitted by current law. This threshold applies to certain contracts or agreements for the erection, construction, alteration or repair of any public building or facility. The most recent adjustment to the amount was made in 2021 and is currently $71,000. This bill increases the bid advertising threshold in the case of purchases of labor and construction materials to $150,000.