Institutes State contract set-aside program for union business enterprises.

S3384

SENATE, No. 3384

STATE OF NEW JERSEY

222nd LEGISLATURE

�

INTRODUCED FEBRUARY 9, 2026

Sponsored by:

Senator� PAUL A. SARLO

District 36 (Bergen and Passaic)

Co-Sponsored by:

Senators Diegnan and McKnight

SYNOPSIS

���� Institutes State contract set-aside program for union
business enterprises.

CURRENT VERSION OF TEXT

���� As introduced.

��

An Act
concerning the designation of certain State purchase
and construction contracts as set-asides for businesses with a union workforce
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 Union
Business Enterprises."

���� 2.�
As used in this act, P.L.��� , c.��� (C.������� ) (pending
before the Legislature as this bill):

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

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

���� �Union� means any organization which exists and is
constituted for the purpose, in whole or in part, of collective bargaining, or
of dealing with employers concerning grievances, terms or conditions of
employment, or of other mutual aid or protection in connection with employment.

���� �Union business enterprise� means any business enterprise,
including a sole proprietorship, partnership, or corporation, that has a union
workforce, has its principal place of business in the State, hires apprentices,
and makes a good faith effort to hire and maintain a diverse workforce, with
documentation of such effort.

���� �Union business enterprise 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 union
business enterprises, or a portion of a contract when that portion has been so
designated.

���� 3.� The Department of the
Treasury shall administer a union business enterprise set-aside program which
shall be in addition to any other set-aside program established by law.� The department
shall require proof that the business meets the requirements of a union
business enterprise as defined in section 2 of this act,
P.L. , c. (C. ) (pending
before the Legislature as this bill)
.

���� 4.� a.� Notwithstanding the
provisions of any State bidding or public contracts laws to the contrary, but
subject to any superseding federal statutes or rules, contracting agencies may,
in consultation with the department, designate a contract, or a portion
thereof, for goods, equipment, construction, or services to be awarded by a
contracting agency as a union business enterprise set-aside contract pursuant
to the goals and procedures established in this act,
P.L. , c. (C. ) (pending
before the Legislature as this bill)
, whenever there is a reasonable
expectation that bids may be obtained from at least three qualified union
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 is established
the goal that contracting agencies award at least 22 percent of their contracts
to union business enterprises.� This goal 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 union business enterprise.� Each
contracting agency shall make a good faith effort to attain the goal
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 be submitted, within
seven days, 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 union business enterprise goal.

���� b.� The department shall
consult regularly with representatives of the contracting industry for the
purpose of implementing the provisions of this act,
P.L.��� , c.��� (C.������� ) (pending before the Legislature
as this bill)
.� These consultations shall take place no less than once
every six months.

���� 7.� The advertisement for bids
on a union 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 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,
P.L.��� , c.��� (C.������� ) (pending before the Legislature as
this bill),
is inconsistent with that law.

���� 8.� a.� The department shall
establish reasonable regulations appropriate for controlling the designation of
prospective union 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 union 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 union business
enterprises.

���� d.� The department shall
establish a procedure whereby the designation of a business as a union 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 union 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 union
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 the established set-aside goal. �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:

���� a.� the total dollar value and
number of contracts awarded to union 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
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,
P.L. , c. (C. ) (pending
before the Legislature as this bill),
during the preceding fiscal year.

���� 12.� When the department
determines that a business has been classified as a union 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,
P.L.��� , c.���
(C.������� ) (pending before the Legislature as this bill),
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 the �Administrative
Procedure Act,� 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 program for union business enterprises.

���� Under the bill, "union
business enterprise" means any business enterprise, including a sole
proprietorship, partnership, or corporation, that has a union workforce, has
its principal place of business in the State, hires apprentices, and makes a
good faith effort to hire and maintain a diverse workforce, with documentation
of such effort.� �Union" means any organization which exists and is
constituted for the purpose, in whole or in part, of collective bargaining, or
of dealing with employers concerning grievances, terms or conditions of
employment, or of other mutual aid or protection in connection with employment.

���� The Department of the Treasury
will administer the program.� The department will require proof that the business
meets the requirements of a union business enterprise.

���� The bill establishes the goal
that contracting agencies award at least 22 percent of their contracts to union
business enterprises.� Each contracting agency will annually develop, in
consultation with the department, a plan for achieving its union business
enterprise set-aside goal.

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

���� The department will assess
penalties if it determines that a business has been classified as a union
business enterprise 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.