Establishes "Minority and Women-Owned Businesses State Contractor Remedies Act."

A1720

ASSEMBLY, No. 1720

STATE OF NEW JERSEY

222nd LEGISLATURE

�

PRE-FILED FOR INTRODUCTION IN THE 2026 SESSION

Sponsored by:

Assemblywoman VERLINA REYNOLDS-JACKSON

District 15 (Hunterdon and Mercer)

Co-Sponsored by:

Assemblywomen Carter, Speight, Tucker, Morales, Assemblymen
Spearman, Miller, Assemblywomen McCoy, Haider and Bagolie

SYNOPSIS

���� Establishes "Minority and Women-Owned Businesses
State Contractor Remedies Act."

CURRENT VERSION OF TEXT

���� Introduced Pending Technical Review by Legislative
Counsel.

��

An Act

establishing the �Minority and Women-Owned Businesses State Contractor Remedies
Act�; amending 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.) (Set-Aside Act), 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.
, 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 Works Procurement and Construction Contracts and directed the 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 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 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 be required to make a good faith effort to award seven percent of
public procurement and construction contracts to minority-owned 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-neutral 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-neutral 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-neutral 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,
Hispanic Americans, and nonminority women for construction, professional services,
and goods and services.

���� 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, State contracting units, 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 narrowly tailored to address the
report�s findings of significant statistical disparities in the State�s
contract awards.

���� 3.��� (New section) As used in
this act, P.L.��� , c.��� (C.������ ) (pending before the Legislature as this
bill):

���� �Chief� means the Chief
Supplier Development Officer of the Office of Supplier Development and Business
Opportunities established in the Department of the Treasury, or a successor.

���� �Department� means the
Department of the Treasury.

���� �Disparity study� means the
2024 State of New Jersey Study on the Availability and Utilization of Small,
Minority, Women, and Service-Disabled Veteran-Owned Businesses.

���� �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.

���� �Electronic database� means
the database in which the department maintains a listing of certified
businesses in the business categories set forth in this act.

���� �Goods and services contract�
means a contract for commodities or services not otherwise defined as
professional, architectural, or engineering.

���� �Minority� means a person as
defined in section 2 of P.L.1986, c.195 (C.52:27H-21.18).

���� �Minority business� means a
business as defined in section 2 of P.L.1986, c.195 (C.52:27H-21.18).

���� �Nonminority� means a person
who identifies themselves as White, not of Hispanic or Latino origin, and not
of any other race.

���� �Office� means the Office of
Supplier Development and Business Opportunities established in the Department
of the Treasury, or its successor.

���� �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, including architects and engineers providing design consultant
services related to construction projects. 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 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 State law to award contracts.

���� �State contracting unit� means
a government entity that contracts for the procurement of goods, services,
professional services, or the construction of public works, either pursuant to
chapter 32, 33, or 34 of Title 52 of the Revised Statutes, the �State College
Contracts Law,� P.L.1986, c.43 (C.18A:64-52 et seq.), P.L.2007, c.137
(C.52:18A-235 et seq.), or any other applicable law.

���� �Woman� or �women� means a
female or females as defined in section 2 of P.L.1986, c.195 (C.52:27H-21.18).

���� �Women�s business� means a
business as defined in section 2 of P.L.1986, c.195 (C.52:27H-21.18).

���� 4.��� (New section) a. (1) All
State agencies and State contracting units shall establish programs consistent
with P.L.��� , c.�� �(C.���� ��) (pending before the Legislature as this bill)
to facilitate the participation of minority businesses, including Black-owned
businesses, Asian American-owned businesses, Hispanic-owned businesses, and
nonminority women-owned businesses.�
All State
agencies
and State contracting units
shall
develop a plan for the fiscal year next following the effective date of P.L.���
, c. ���(C.������� ) (pending before the Legislature as this bill) and for each
fiscal year thereafter to encourage Black-owned businesses, Asian
American-owned businesses, Hispanic-owned businesses, and nonminority 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, State agencies
and
State contracting units
shall file with the office a
report containing information requested by the chief. �The office shall receive
and analyze the State agency and
State contracting unit
reports and provide feedback to the submitting
State

agencies
and State contracting units
, as it deems necessary.

���� (2) (a)
Beginning
on the effective date of P.L.� ��, c.� ��(C.������� ) (pending before the
Legislature as this bill), the goals established by all State agencies and State
contracting units for contract utilization in a State Fiscal Year shall be as
follows; provided, however, that the chief may interpret the disparity study
and further tailor the goals to specific contract price ranges on a bid-by-bid
basis:

���� (i) at least 9.19 percent of
their construction prime contracts for Black-owned businesses, of which 1.98
percent shall be for Black women-owned businesses and 7.20 percent shall be for
Black male-owned businesses;

���� (ii) at least 10.72 percent of
their construction subcontracts for Black-owned businesses, of which 3.28
percent shall be for Black women-owned businesses and 7.44 percent shall be for
Black male-owned businesses;

���� (iii) at least 10.08 percent
of their goods and services contracts for Black-owned businesses, of which 3.31
percent shall be for Black women-owned businesses and 6.77 percent shall be for
Black male-owned businesses;

���� (iv) at least 12.01 percent of
their professional services prime contracts for Black-owned businesses, of
which 4.26 percent shall be for Black women-owned businesses and 7.75 percent
shall be for Black male-owned businesses;

���� (v) at least 11.38 percent of
their professional services subcontracts for Black-owned businesses, of which
3.57 percent shall be for Black women-owned businesses and 7.81 percent shall
be for Black male-owned businesses;

���� (vi) at least 6.43 percent of
their construction prime contracts for Asian American-owned businesses, of
which 1.07 percent shall be for Asian American women-owned businesses and 5.37
percent shall be for Asian American male-owned businesses;

���� (vii) at least 9.32 percent of
their construction subcontracts for Asian American-owned businesses, of which
2.45 percent shall be for Asian American women-owned businesses and 6.87
percent shall be for Asian American male-owned businesses;

���� (viii) at least 5.24 percent
of their goods and services contracts for Asian American-owned businesses, of
which 1.29 percent shall be for Asian American women-owned businesses and 3.95
percent shall be for Asian American male-owned businesses;

���� (ix) at least 11.65 percent of
their construction prime contracts for Hispanic-owned businesses, of which 1.51
percent shall be for Hispanic women-owned businesses and 10.14 percent shall be
for Hispanic male-owned businesses;

���� (x) at least 7.98 percent of
their goods and services contracts for Hispanic-owned businesses, of which 1.98
percent shall be for Hispanic women-owned businesses and 6.00 percent shall be
for Hispanic male-owned businesses;

���� (xi) at least 5.77 percent of
their professional services prime contracts for Hispanic-owned businesses, of
which 1.71 percent shall be for Hispanic women-owned businesses and 4.05
percent shall be for Hispanic male-owned businesses;

���� (xii) at least 9.38 percent of
their professional services subcontracts for Hispanic-owned businesses, of
which 2.06 percent shall be for Hispanic women-owned businesses and 7.31
percent shall be for Hispanic male-owned businesses; and

���� (xiii) at least 19.70 percent
of total construction prime contracts for nonminority women-owned businesses,
at least 22.34 percent of total goods and services contracts for nonminority
women-owned businesses, at least 27.66 percent of total professional services
contracts for nonminority women-owned businesses, and at least 22.70 percent of
total professional services subcontracts for nonminority women-owned
businesses.

���� (b) State agencies and State
contracting units shall implement appropriate adjustments determined by
subsequent statistical analyses of the disparities between the availability of
and the utilization of contracts held by minority businesses and nonminority
women-owned businesses, and additions or adjustments 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 nonminority women-owned
businesses and the availability of minority and nonminority women-owned
businesses to perform such contracts.�

���� (3) (a) Each
State
agency or State contracting unit shall make a
good faith effort to attain the goals established pursuant to this section.�
Each
State
agency or State contracting unit
that substantially fails to make a good faith effort to achieve the goals set
forth in this subsection in such State agency�s or State contracting unit�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 or State contracting unit 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 or State
contracting unit;

���� (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 and in accordance with any applicable 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 or State contracting unit
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
or State contracting unit�s goals, the chief may require some or all the
State
agency�s or State contracting unit�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 or State contracting unit�s good faith effort to achieve the
goals set forth in this section shall be evidenced by documentation showing
that the
State
agency or State contracting
unit:

���� (a) considered structuring
contracts in a manner to allow underutilized bidders to be able to compete for
the
State
agency�s or State contracting unit�s
contracts;

���� (b) offered periodic
opportunities for minority and women-owned businesses to learn of the
State
agency�s or State contracting unit�s general
anticipated contract needs prior to advertisement, independent of a published
bid solicitation, and to learn about the
State
agency�s
or State contracting unit�s contracting practices and requirements;

���� (c) conducted periodic
outreach to business associations representing minority and women-owned
businesses to publicize the
State
agency�s or
State contracting unit�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 and in accordance with any applicable 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 and State contracting units
may establish bid criteria for contracts or portions of contracts that result
in a preference being afforded to minority businesses or women-owned
businesses, though the State agency or State contracting unit may still award
the contract to a bidder that is not a minority 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 businesses and women-owned
businesses that may count towards more than one goal.

���� c. �In setting and achieving
the goals set forth in this section,
State
agencies
and State contracting units 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, with written notice to the chief, conduct another
disparity study and consult the findings therein;

���� (2) implement a program that
will enable the
State
agency or State
contracting unit 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 effectuate the purposes of this section.� The
State
agency or State contracting unit shall
determine whether the imposition of the requirements of any such law duplicates
or conflicts with the provisions hereof and, if such duplication or conflict
exists, the
State
agency or State contracting
unit shall waive the applicability of this section to the extent of such
duplication or conflict;

���� (5)�� submit a report to the chief
upon contract completion, which shall indicate the contract goals, the means by
which the contractor in its bid initially proposed to meet the goals for
subcontracting of the contract or the good faith efforts the contractor
undertook to do so, and the contractor�s performance in continuing to meet the
goals for subcontracting during the term of the contract. �The report shall
also note any significant issues that arose during the contract that may have
resulted in decreased participation as subcontractors by Black-owned
businesses, Black male-owned businesses, Black women-owned businesses, Asian
American-owned businesses, Asian American male-owned businesses, Asian American
women-owned businesses, Hispanic-owned businesses, Hispanic male-owned businesses,
Hispanic women-owned businesses, and nonminority women-owned businesses.� The
State agency or State contracting unit shall review all reports with the chief
to continually refine its contract terms to promote successful implementation
of 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 nonminority women-owned
businesses, as well as small businesses in all areas of State contracting; and

���� (6)�� take any other action
that the chief determines to be appropriate to effectuate rules adopted by the
State Treasurer. �This may include, but shall not be limited to, a provision
providing for appropriate relief should any contractor knowingly and willfully
fail to comply with the goal requirements of this section.

���� 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
or State contracting unit shall consider:

���� (a) whether the contractor has
promoted the subcontracting opportunity to, or otherwise made minority
businesses and nonminority women-owned business aware of the opportunity, in
such event, (i) whether minority businesses and nonminority 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 or State
contracting unit awarding the contract; and (ii) minority businesses and nonminority
women-owned businesses, which have been solicited by the contractor, have
responded in a timely fashion to the contractor�s request to engage minority businesses
and nonminority women-owned businesses prior to the
State

agency�s or State contracting unit�s bid submission deadline;

���� (b) whether the contractor
provided timely written notification of subcontracting opportunities on the contract
to appropriate minority businesses and nonminority women-owned businesses that
appear in the State�s electronic database;

���� (c) whether the contractor can
reasonably structure the amount of work to be performed under subcontracts to
increase the likelihood of participation by minority businesses and nonminority
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.

���� (3) Contractors shall comply
with the goal requirements of this section for the duration of the contract.�
If the contractor removes, adds, or changes a subcontractor, the contractor is
required to comply with the goal requirements of this section to the same as
its original bid or demonstrate that good faith efforts were taken to comply
with the requirements of this section.� Failure on the part of a contractor to
comply or demonstrate a good faith effort during the term of the contract, and
any extensions thereto, will result in the State agency or State contracting
unit advising the chief of the contractor�s noncompliance in the report
required pursuant to paragraph (5) of subsection c. of this section.

���� (4) Upon receiving any such
report from a State agency or State contracting unit alleging that a contractor
failed to meet the requirements of this section or did not make good faith
efforts to comply with those requirements, the chief shall conduct a mandatory
plenary review of the contractor�s efforts to comply with the requirements of
this section and shall determine if any action should be taken against the
contractor.� The State agency or State contracting unit and the contractor
shall comply with the chief�s requests for documents and information to support
the plenary review.� Upon completion of the plenary review, if the chief
determines that the contractor failed to meet or failed to make a good faith
effort to meet the goal requirements of this section, the chief may issue an
order taking appropriate action against the contractor, which may include one
or more of the following:� (a) order the contractor to complete mandatory
training at the contractor�s own expense prior to bidding on any State contract;
(b) bypass the future award of one or more pending contract awards; (c) debar
the contractor from State contracting for a period of time of up to five years;
and (d) mandate such other relief as the chief deems appropriate.

���� 5.� Section 3 of P.L.1987,
c.318 (C.5:10-21.1a) is amended to read as follows:

���� 3. �The
[
authority
]

office

is authorized and directed to establish, prior to initiating any project on or
after the effective date of
[
this
1987 amendatory and supplementary act
]

P.L.1987, c.318 (C.5:10-5 et al.)
, 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
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 State 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
]

Supplier Development Officer of the Office of Supplier Development and
Business Opportunities established in the Department of the Treasury, or a
successor
.

���� 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
]

Supplier
Development and Business Opportunities established in the Department of the
Treasury, or its successor
.

���� 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).

����
k.��� �State contracting
unit� means a government entity that contracts for the procurement of goods,
services, professional services, or the construction of public works, either
pursuant to chapter 32, 33, or 34 of Title 52 of the Revised Statutes, the
"State College Contracts Law," P.L.1986, c.43 (C.18A:64-52 et seq.),
P.L.2007, c.137 (C.52:18A-235 et seq.), or any other applicable law.

(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

and State contracting units
, in consultation with the
[
department
]

chief
,
may designate a contract, or a portion thereof, for goods, equipment, construction
or services to be awarded by a
[
contracting
]

State
agency

or a State contracting unit
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
or State contracting unit
may, in consultation with the
[
department
]

chief
,
withdraw the affected
[
contracts
]

contract

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
and State contracting units
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
and State contracting unit
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
and State contracting units
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
]

chief
and
the
[
contracting
]

State
agency

or State contracting unit
disagree as to whether a
small business

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
]

the State
Treasurer�s
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
]

manner
in which the advertisement shall appear shall be selected by the
[
contracting
]

State
agency

or State contracting unit
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
or State contracting unit
may deem proper. �The advertisement
shall be made by that
[
contracting
]

State

agency
or State contracting unit
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
or State contracting unit
. The award shall be made with
reasonable promptness by the
[
contracting
]

State

agency
or State contracting unit
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
or State contracting unit
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
State
agency

[
, the
]

or State

contracting
[
agency
]

unit, the
State agency or the State contracting unit
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
or State contracting unit
shall provide an opportunity for a
hearing on the reasons for the rejection of the set-aside designation.�
Such
hearing may be in-person, by video conference, or on the written record at the
discretion of the State agency or State contracting unit.
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
and State contracting unit
shall submit an annual report to the
[
department
]

office

according to a schedule announced by the
[
department
]

chief
.
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
or State contracting unit, and
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
]

office

shall receive and analyze the reports submitted by the
[
contracting
]

State

agencies and
State contracting units
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
]

P.L.1983,
c.482 (C.52:32-17 et seq.)
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
and State contracting unit
shall annually develop, in
consultation with the
[
department
]

office
,
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
]

office

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
]

office

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.� (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 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.).

���� 20.� (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.

���� 21.� S
ection
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) are repealed.

���� 22.� 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 and State contracting unit contracts.� State agencies
and State contracting units 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 businesses and nonminority women-owned businesses to submit
proposals and encourage the awarding of contracts to those businesses.�

����� The bill establishes minimum contract utilization
goals for all State agencies and State contracting units based on the New
Jersey Disparity Study on the Availability and Utilization of Small, Minority,
Women, and Service-Disabled Veteran-Owned Businesses, which was published in
January of 2024.� Each State agency and State contracting unit is required to
implement appropriate adjustments determined by subsequent statistical analyses
of the disparities between the availability and utilization of contracts held by
minority businesses and nonminority women-owned businesses.� In an effort to
achieve the goals, the agency or contracting unit may establish bid criteria
for contracts that result in a preference being afforded to minority businesses
and nonminority women-owned businesses.�

����� State agencies and State contracting units are
required to make a good faith effort to attain the goals set forth in the bill.�
If the agency or contracting unit fails to make a good faith effort, a remedial
action plan will be submitted to the Chief Supplier Development Officer of the
Office of Supplier Development and Business Opportunities.� If it is determined
by the chief that the agency or contracting unit 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, and order further
remedial measures. If implementation still does not occur, the chief may
require that some or all of the agency�s or contracting unit�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 the rejection of bids made by the prime contractor.

����� 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 Supplier Development Officer, the Office of Supplier
Development and Business Opportunities, and the Department of the Treasury.

����� The bill also 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 changes the set-aside goal for small businesses from 15
percent to 25 percent, and removes goals for minority and women-owned
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).