Creates State contract set-aside program for businesses owned and operated by persons with disabilities.

A2175

ASSEMBLY, No. 2175

STATE OF NEW JERSEY

222nd LEGISLATURE

�

PRE-FILED FOR INTRODUCTION IN THE 2026 SESSION

Sponsored by:

Assemblywoman SHANIQUE SPEIGHT

District 29 (Essex and Hudson)

Co-Sponsored by:

Assemblymen Verrelli and DeAngelo

SYNOPSIS

���� Creates State contract set-aside program for
businesses owned and operated by persons with disabilities.

CURRENT VERSION OF TEXT

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

��

An Act

concerning the designation of certain State
purchase and construction contracts as set-asides for businesses owned and
operated by persons with disabilities 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 Disability-Owned Business
Enterprises."

���� 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.

���� �Disability� means a physical
or mental disability that substantially impairs a major life activity.

���� �Disability-owned business
enterprise� 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 with disabilities, and is certified by
nonprofit organizations focused on business disability
inclusion
, including Disability:IN, as a disability-owned business
enterprise.

���� �Disability-owned business
enterprise 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.

���� 3.��� The Department of the
Treasury shall administer a disability-owned business enterprise set-aside
program which shall be in addition to any other set-aside program established
by law.� The department shall require proof of disability status for all appropriate
individuals.

���� 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 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 disability-owned business enterprise 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
disability-owned business enterprises 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 three percent of
their contracts to disability-owned business enterprises.� These goals may,
when appropriate, be attained by the direct designation of prime contracts for
these businesses 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 disability-owned business enterprise.� 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.

���� 6.��� 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 his designee, for final determination.

���� 7.��� The advertisement for
bids on a disability-owned business enterprise 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 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 disability-owned business enterprise bidders and shall maintain
lists of designated businesses.

���� b.��� The department shall
establish a procedure whereby businesses may request inclusion on appropriate
lists for disability-owned business enterprises.

���� 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 disability-owned
business enterprises.

���� d.��� The department shall
establish a procedure whereby the designation of a business as a
disability-owned business enterprise 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 disability-owned business enterprise
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
disability-owned business enterprise 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 disability-owned business enterprises,
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
these data, submit an annual report to the Governor, and pursuant to section 2
of P.L.1991, c.164 (C.52:14-19.1), the Legislature, showing the progress being
made toward the objectives and goals of this act during the preceding fiscal
year.

���� 12.� Each contracting agency
shall annually develop, in consultation with the department, a plan for
achieving its disability-owned business enterprise goals.

���� 13.� 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.

���� 14.� When the department
determines that a business has been classified as a disability-owned business
enterprise 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., 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.

���� 15.� Whenever any obligation
is imposed by law upon a contracting agency to set aside a percentage of State
contracts awarded by that agency for disability-owned business enterprises,
compliance with that requirement shall be calculated based, according to objective
and verifiable standards as promulgated pursuant to administrative regulation,
upon the dollar value of payments actually made each year to, and received by,
disability-owned business enterprises pursuant to State contracts awarded by
that agency, or subcontracts thereto, compared to the total of all payments
made to, and received by, all parties awarded State contracts by that agency.

���� Compliance with any such
set-aside requirement shall not be calculated using statements made by bidders
with respect to the portion of a contract which the bidder intends to
subcontract to disability-owned business enterprises.

���� 16.� The Department of the
Treasury shall develop such other regulations as may be necessary to interpret
and implement all provisions of this act, including rules governing the
determination of which type or class of contract is covered by this act.

���� 17.� This act shall take
effect immediately.

STATEMENT

���� This bill creates a State
contract set-aside program for businesses owned and operated by persons with
disabilities.

���� This bill would add a new three
percent set-aside program for disability-owned business enterprises which is in
addition to other State set-aside programs.� The three percent set-aside would
represent three percent of all contracts awarded by contracting agencies.

���� �Disability-owned business
enterprise� would be defined to mean 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 with disabilities and is
certified by nonprofit organizations focused on business disability inclusion,
including Disability:IN, as a disability-owned business enterprise. �Disability-owned
business enterprise is a commonly used term by several non-profit organizations
focused on business disability inclusion, such as Disability:IN, to recognize
such businesses.� The term �disability� would be defined to mean a physical or
mental disability that substantially impairs a major life activity.