Requires boards of education, municipalities, counties, and certain other local contracting units to determine and utilize cost-saving practices when procuring goods and services.

S3525

SENATE, No. 3525

STATE OF NEW JERSEY

222nd LEGISLATURE

�

INTRODUCED FEBRUARY 19, 2026

Sponsored by:

Senator� JAMES BEACH

District 6 (Burlington and Camden)

SYNOPSIS

���� Requires boards of education, municipalities,
counties, and certain other local contracting units to determine and utilize
cost-saving practices when procuring goods and services.

�

CURRENT VERSION OF TEXT

���� As introduced.

��

An Act
concerning cooperative purchasing by certain
contracting units, amending N.J.S.18A:18A-1 et seq., P.L.1971, c.198, and P.L.1999,
c.440, and supplementing chapter 27D of Title 52 of the Revised Statutes.

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

���� 1.��� N.J.S.18A:18A-2 is
amended to read as follows:

���� 18A:18A-2.� As used in this
chapter, unless the context otherwise indicates:

���� a.���� "Board of
education" means and includes the board of education of any local school
district, consolidated school district, regional school district, county
vocational school and any other board of education or other similar body other
than the State Board of Education, the
[
Commission
on
]

Secretary
of
Higher Education or the Presidents' Council, established and operating
under the provisions of Title 18A of the New Jersey Statutes and having
authority to make purchases and to enter into contracts for the provision or
performance of goods or services.� The term "board of education" also
shall include the board of trustees of a charter school established under
P.L.1995, c.426 (C.18A:36A-1 et seq.).

���� b.��� "Purchasing
agent" means the secretary, business administrator
,
or the business
manager of the board of education duly assigned the authority, responsibility
and accountability for the purchasing activity of the board of education and
having the power to prepare advertisements, to advertise for and receive bids
and to award contracts as permitted by this chapter, but if there
[
be
]

is
no
secretary, business administrator or business manager, such officer, committees
or employees to whom such power has been delegated by the board of education.

���� c.���� (Deleted by amendment,
P.L.1999, c.440
[
.
]
)

���� d.��� "District"
means and includes any local school district, consolidated school district,
regional school district, county vocational school and any other board of
education or other similar body other than the State board, established under
the provisions of Title 18A of the New Jersey Statutes.

���� e.���� (Deleted by amendment,
P.L.1999, c.440
[
.
]
)

���� f.���� (Deleted by amendment,
P.L.1999, c.440
[
.
]
)

���� g.��� "Extraordinary
unspecifiable services" means services which are specialized and
qualitative in nature requiring expertise, extensive training
,
and
proven reputation in the field of endeavor.

���� h.��� "Professional
services" means services rendered or performed by a person authorized by
law to practice a recognized profession and whose practice is regulated by law
and the performance of which services requires knowledge of an advanced type in
a field of learning acquired by a prolonged formal course of specialized
instruction and study as distinguished from general academic instruction or
apprenticeship and training.� Professional services may also mean services
rendered in the provision or performance of goods or services that are original
and creative in character in a recognized field of artistic endeavor.

���� i.���� (Deleted by amendment,
P.L.1999, c.440
[
.
]
)

���� j.���� "Purchases"
means transactions, for a valuable consideration, creating or acquiring an
interest in goods, services
,
and property, except real property or any
interest therein.

���� k.��� "Work" means
any task, program, undertaking, or activity, related to any development,
redevelopment, construction
,
or reconstruction performed or provided
pursuant to a contract with a board of education.

���� l.���� "Aggregate"
means the sums expended or to be expended for the provision or performance of
any goods or services in connection with the same immediate purpose or task, or
the furnishing of similar goods or services, during the same contract year
through a contract awarded by a purchasing agent.

���� m.�� "Bid threshold"
means the dollar amount set in N.J.S.18A:18A-3, above which a board of
education shall advertise for and receive sealed bids in accordance with
procedures set forth in N.J.S.18A:18A-1 et seq.

���� n.��� "Contract"
means any agreement, including but not limited to a purchase order or a formal
agreement, which is a legally binding relationship enforceable by law, between
a vendor who agrees to provide or perform goods or services and a board of education
which agrees to compensate a vendor, as defined by and subject to the terms and
conditions of the agreement.� A contract also may include an arrangement
whereby a vendor compensates a board of education for the vendor's right to
perform a service, such as, but not limited to, operating a concession.

���� o.��� "Contract
year" means the period of 12 consecutive months following the award of a
contract.

���� p.��� "Competitive
contracting" means the method described in sections 45 through 49 of
P.L.1999, c.440 (C.18A:18A-4.1 through C.18A:18A-4.5) of contracting for
specialized goods and services in which formal proposals are solicited from
vendors; formal proposals are evaluated by the purchasing agent or counsel or
school business administrator; and the board of education awards a contract to
a vendor or vendors from among the formal proposals received.

���� q.��� "Goods and
services" or "goods or services" means any work, labor,
commodities, equipment, materials, or supplies of any tangible or intangible
nature, except real property or any interest therein, provided or performed
through a contract awarded by a purchasing agent, including goods and property
subject to N.J.S.12A:2-101 et seq.

���� r.���� "Library and
educational goods and services" means textbooks, copyrighted materials,
student produced publications
,
and services incidental thereto,
including but not limited to books, periodicals, newspapers, documents,
pamphlets, photographs, reproductions, microfilms, pictorial or graphic works,
musical scores, maps, charts, globes, sound recordings, slides, films,
filmstrips, video and magnetic tapes, other printed or published matter and
audiovisual and other materials of a similar nature, necessary binding or
rebinding of library materials, and specialized computer software used as a
supplement or in lieu of textbooks or reference material.

���� s.���� "Lowest
price" means the least possible amount that meets all requirements of the
request of a purchasing agent.

���� t.���� "Lowest
responsible bidder or vendor" means the bidder or vendor:� (1) whose
response to a request for bids offers the lowest price and is responsive; and
(2) who is responsible.

���� u.��� "Official
newspaper" means any newspaper designated by the board of education
pursuant to R.S.35:1-1 et seq.

���� v.��� "Purchase
order" means a document issued by the purchasing agent authorizing a
purchase transaction with a vendor to provide or perform goods or services to
the board of education, which, when fulfilled in accordance with the terms and
conditions of a request of a purchasing agent and other provisions and
procedures that may be established by the board of education, will result in
payment by the board of education.

���� w.�� "Quotation"
means the response to a formal or informal request made by a purchasing agent
to a vendor for provision or performance of goods or services, when the
aggregate cost is less than the bid threshold.� Quotations may be in writing,
or taken verbally if a record is kept by the purchasing agent.

���� x.��� "Responsible"
means able to complete the contract in accordance with its requirements,
including but not limited to requirements pertaining to experience, moral
integrity, operating capacity, financial capacity, credit, and workforce,
equipment, and facilities availability.

���� y.��� "Responsive"
means conforming in all material respects to the terms and conditions,
specifications, legal requirements, and other provisions of the request.

���� z.���� "Public
works" means building, altering, repairing, improving or demolishing any
public structure or facility constructed or acquired by a board of education to
house school district functions or provide water, waste disposal, power,
transportation
,
and other public infrastructures.

���� aa.�� "Concession"
means the granting of a license or right to act for or on behalf of the board
of education, or to provide a service requiring the approval or endorsement of
the board of education, and which may or may not involve a payment or exchange,
or provision of services by or to the board of education, provided that the
term concession shall not include vending machines.

���� bb.� "Index rate"
means the rate of annual percentage increase, rounded to the nearest
half-percent, in the Implicit Price Deflator for State and Local Government
Purchases of Goods and Services, computed and published quarterly by the United
States Department of Commerce, Bureau of Economic Analysis.

���� cc.�� "Proprietary"
means goods or services of a specialized nature, that may be made or marketed
by a person or persons having the exclusive right to make or sell them, when
the need for such goods or services has been certified in writing by the board
of education to be necessary for the conduct of its affairs.

���� dd.� "Service or
services" means the performance of work, or the furnishing of labor, time,
or effort, or any combination thereof, not involving or connected to the
delivery or ownership of a specified end product or goods or a manufacturing
process.� Service or services may also include an arrangement in which a vendor
compensates the board of education for the vendor's right to operate a
concession.

����
ee.�� "Cooperative
purchasing system" means a cooperative pricing system, joint purchasing
system, commodity resale system, county cooperative contract purchasing system,
or regional cooperative pricing system in which a board of education, or in
which two or more boards of education, enter into a contract for the
procurement of goods or services.

(cf: P.L.1999, c.440, s.50)

���� 2.��� N.J.S.18A:18A-3 is
amended to read as follows:���

���� 18A:18A-3. a. (1) When the
cost or price of a contract, in the aggregate, does not exceed in a contract
year the total sum of $17,500, a board of education may authorize a purchasing
agent to award the contract without public advertising for bids and bidding
therefor. The board of education may adopt a resolution to set a lower
threshold for the receipt of public bids or the solicitation of competitive
quotations.

���� (2) Notwithstanding the
provisions of any other law, rule, or regulation to the contrary, a contract
having an anticipated value in excess of $17,500, but below the applicable
public bidding threshold, is not required to be awarded by a board of education
and may be awarded by a purchasing agent if the purchasing agent possesses a
qualified purchasing agent certificate pursuant to subsection b. of section 9
of P.L.1971, c.198 (C.40A:11-9).

���� (3) If the purchasing agent
possesses a qualified purchasing agent certificate pursuant to subsection b. of
section 9 of P.L.1971, c.198 (C.40A:11-9), the board of education may establish
that the bid threshold may be up to $25,000, or the amount determined by the
Governor pursuant to subsection b. of this section.

���� (4) The authorization may be
granted for each contract or by a general delegation of the power to negotiate
and award the contracts pursuant to this section.

���� b.��� Commencing in the fifth
year after the year in which P.L.1999, c.440
(C.40A:11-4.1 et al.)
takes
effect, and every five years thereafter, the Governor, in consultation with the
Department of the Treasury, shall adjust the threshold amount and the higher
threshold amount which the board of education is permitted to establish as 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 of the
index rate as that term is defined in N.J.S.18A:18A-2, and shall round the
adjustment to the nearest $1,000.� The Governor shall notify all local school
districts of the adjustment no later than June 1 of every fifth year.� The
adjustment shall become effective on July 1 of the year in which it is made.

����
c.���� Prior to entering
into a contract for the procurement of any goods or services, the board of
education shall ensure that the contractor and any subcontractors are compliant
with existing State and federal laws, rules, and regulations concerning:

����
(1)�� the
antidiscrimination provisions of R.S.10:2-1 through R.S.10:2-4;

����
(2)�� the "Law Against
Discrimination," P.L.1945, c.169 (C.10:5-1 et seq.);

����
(3)�� the
antidiscrimination, equal employment opportunity, and affirmative action
provisions applicable pursuant to P.L.1975, c.127� (C.10:5-31 et seq.);

����
(4)�� business registration
requirements as described pursuant to P.L.2001, c.134 (C.52:32-44 et al.);

����
(5) the contribution
restriction provisions pursuant to P.L.2005, c.51 (C.19:44A-20.13 et seq.);

����
(6)�� prevailing wage
requirements pursuant to P.L.1963, c.150 (C.34:11-56.25 et seq.);

����
(7)�� the provisions of the
"Sales and Use Tax Act," P.L.1966, c.30 (C.54:32B-1 et seq.);

����
(8)�� the American goods
sourcing provisions of section 18 of P.L.1971, c.198 (C.40A:11-18);

����
(9)�� valid classification
in a trade as issued by the Division of Property Management and Construction in
the Department of Treasury;

����
(10) submission of a sworn
contractor certification pursuant to section 63 of P.L.2000, c.72
(C.18A:7G-37);

����
(11) compliance by local
government officers and employees pursuant to section 5 of P.L.1991, c.29
(C.40A:9-22.5);

����
(12) the disclosure of
investment activities in Iran pursuant to P.L.2012, c.25 (C.52:32-55 et al.);
and

����
(13) provisions concerning
the prohibited activities in Belarus and Russia pursuant to section 7 of P.L.2022,
c.3 (C.52:32-60.2).�
�

����
d.
��� Any contract made
pursuant to this section may be awarded for a period of up to 24 consecutive
months, except that contracts for professional services pursuant to paragraph
(1) of subsection a. of N.J.S.18A:18A-5 may be awarded for a period not
exceeding 12 consecutive months.

(cf: P.L.2023, c.252, s.5)

���� 3.��� N.J.S.18A:18A-4 is
amended to read as follows:

���� 18A:18A-4.� a.� Every contract
for the provision or performance of any goods or services, the cost of which in
the aggregate exceeds the bid threshold, shall be awarded only by resolution of
the board of education to the lowest responsible bidder after public
advertising for bids and bidding therefor, except as is provided otherwise in
this chapter or specifically by any other law.

���� The board of education may, by
resolution approved by a majority of the board of education and subject to
subsections b. and c. of this section, disqualify a bidder who would otherwise
be determined to be the lowest responsible bidder, if the board of education
finds that:

���� (1)�� any board of education
has had prior negative experience with the bidder within the past 10 years, as
reported in a contractor evaluation submitted pursuant to N.J.S. 18A:18A-15; or

���� (2)�� in the case of a
contract for a school facilities project as defined in section 3 of P.L.2000,
c.72 (C.18A:7G-3), there has been at least one instance of prior negative
experience with the bidder by any board of education, or by the New Jersey
Economic Development Authority or the New Jersey Schools Development Authority,
or any combination thereof, as reported in a contractor evaluation submitted
pursuant to N.J.S.18A:18A-15, a school facilities project performance
evaluation, or in a mandatory uniform performance evaluation conducted pursuant
to section 62 of P.L.2000, c.72 (C.18A:7G-36), as appropriate.

���� b.��� As used in this section,
"prior negative experience" means any of the following:

���� (1)�� the bidder has been
found, through either court adjudication, arbitration, mediation, or other
contractually stipulated alternate dispute resolution mechanism, to have:
failed to provide or perform goods or services; or failed to complete the
contract in a timely manner; or otherwise performed unsatisfactorily under a
prior contract with a board of education or, in the case of a school facilities
project, with the New Jersey Economic Development Authority or the New Jersey
Schools Development Authority;

���� (2)�� the bidder defaulted on
a contract, thereby requiring a board of education or, in the case of a school
facilities project, the New Jersey Economic Development Authority or the New
Jersey Schools Development Authority, to utilize the services of another contractor
to provide the goods or perform the services or to correct or complete the
contract;

���� (3)�� the bidder defaulted on
a contract, thereby requiring a board of education or, in the case of a school
facilities project, the New Jersey Economic Development Authority or the New
Jersey Schools Development Authority, to look to the bidder's surety for completion
of the contract or tender of the costs of completion;

���� (4)�� the bidder is debarred
or suspended from contracting with any of the agencies or departments of the
executive branch of the State of New Jersey at the time of the contract award,
whether or not the action was based on experience with a board of education or,
in the case of a school facilities project, with the New Jersey Economic
Development Authority or the New Jersey Schools Development Authority;

���� (5)�� the bidder's
prequalification to bid on a school facilities project, which prequalification
was granted pursuant to the process established by the development authority
under section 59 of P.L.2000, c.72 (C.18A:7G-33), has been revoked by the New
Jersey Schools Development Authority;

���� (6)�� the bidder has been
suspended from contracting or engaging in work or services on a school
facilities project; or

���� (7)�� the bidder's
prequalification to submit bids on a school facilities project has been revoked
pursuant to subsection b. of section 61 of P.L.2000, c.72 (C.18A:7G-35) or
subsection b. of section 62 of P.L.2000, c.72 (C.18A:7G-36).

���� c.���� The following
conditions apply if the board of education is contemplating a disqualification
based on prior negative experience:

���� (1)�� The existence of any of
the indicators of prior negative experience set forth in this section shall not
require that a bidder be disqualified.� In each instance, the decision to
disqualify shall be made within the discretion of the board of education and
shall be rendered in the best interests of the board of education.

���� (2)�� All mitigating factors
shall be considered in determining the seriousness of the prior negative
experience and in deciding whether disqualification is warranted.

���� (3)�� The bidder shall be
furnished by the board of education with a written notice (a) stating that a
disqualification is being considered; (b) setting forth the reason for the
disqualification; and (c) indicating that the bidder shall be accorded an
opportunity for a hearing before the board of education if the bidder so
requests within a stated period of time.� At the hearing, the bidder shall show
good cause why the bidder should not be disqualified by presenting documents
and testimony.� If the board of education determines that good cause has not
been shown by the bidder, it may vote to find the bidder lacking in
responsibility and, thus, disqualified.

���� (4)�� Disqualification shall
be for a reasonable, defined period of time which shall not exceed five years.

���� (5)�� A disqualification,
other than a disqualification pursuant to which a board of education is
prohibited by law from entering into a contract with a bidder, may be voided or
the period thereof may be reduced, in the discretion of the board of education,
upon the submission of a good faith application under oath, supported by
documentary evidence, setting forth substantial and appropriate grounds for the
granting of relief, such as reversal of a judgment, or actual change of
ownership, management or control of the bidder.

���� (6)�� An opportunity for a
hearing need not be offered to a bidder whose disqualification is based on its
suspension or debarment by an agency or department of the executive branch of
the State of New Jersey.� The term of such a disqualification shall be concurrent
with the term of the suspension or debarment by the State agency or department.

���� d.��� The purchase of text
books and materials that exceed the bid threshold and are approved by a board
of education pursuant to N.J.S.18A:34-1 shall not require the further adoption
of a resolution for purchase.

����
e.���� Notwithstanding the
provisions of this section to the contrary, prior to the procurement of any
goods or services pursuant to this section, the purchasing agent shall
determine if entering into a cooperative purchasing system, as defined in
subsection ee. of N.J.S.18A:18A-2, for the procurement of the goods or services
will result in cost savings.� A cost savings analysis prescribed by the
Division of Local Government Services in the Department of Community Affairs
pursuant to section 10 of P.L.��� , c.��� (C.������� ) (pending before the Legislature
as this bill) shall include, but not be limited to, factors such as charges for
service, materials, delivery, soft costs, costs of acquisition, and other costs
of traditional bidding such as cost overruns, protest, rework, and change
orders.� If the purchasing agent determines that entering into a cooperative
purchasing system for the procurement of goods or services will result in cost
savings, the board of education shall utilize a cooperative purchasing system.�

����
f.���� Prior to entering
into a contract for the procurement of any goods or services, the board of
education shall ensure that the contractor and any subcontractors are compliant
with existing State and federal laws, rules, and regulations as enumerated in
subsection c. of N.J.S.18A:18A-3.

(cf: P.L.2023, c.311, s.22)

���� 4.��� Section 45 of P.L.1999,
c.440 (C.18A:18A-4.1) is amended to read as follows:

���� 45.� Notwithstanding the
provisions of any law, rule or regulation to the contrary, competitive
contracting may be used by boards of education in lieu of public bidding for
procurement of specialized goods and services the price of which exceeds the
bid threshold, for the following purposes:

���� a.���� The purchase or
licensing of proprietary computer software designed for board of education
purposes, which may include hardware intended for use with the proprietary
software.� This subsection shall not be utilized for the purpose of acquiring
general purpose computer hardware or software;

���� b.��� The hiring of a
for-profit entity or a not-for-profit entity incorporated under Title 15A of
the New Jersey Statutes for the purpose of:

���� (1)�� the operation,
management or administration of recreation or social service facilities or
programs; or

���� (2)�� the operation,
management or administration of data processing services;

���� c.���� Services performed by
an organization engaged in providing energy conservation education and training
services to train employees of a board of education to reduce consumption of
energy;

���� d.��� Telecommunications
transmission or switching services that are not part of a tariff or schedule of
charges filed with the Board of Public Utilities;

���� e.���� The purchase of
specialized machinery or equipment of a technical nature, or servicing thereof,
which will not reasonably permit the drawing of specifications;

���� f.���� Food services provided
by food service management companies when not part of programs administered by
the New Jersey Department of Agriculture, Bureau of Child Nutrition Programs;

���� g.��� Driver education courses
provided by licensed driver education schools;

���� h.��� At the option of the
board of education, any good or service that is exempt from bidding pursuant to
N.J.S.18A:18A-5;

���� i.���� Laboratory testing
services;

���� j.���� Concessions;

���� k.��� The operation,
management or administration of other services, with the approval of the
Division of Local Government Services in the Department of Community Affairs.

���� Any purpose included herein
shall not be considered by a board of education as an extraordinary
unspecifiable service pursuant to paragraph (2) of subsection a. of
N.J.S.18A:18A-5.

����
l.���� Notwithstanding the
provisions of this section to the contrary, prior to the procurement of any
goods or services pursuant to this section, the purchasing agent shall
determine if entering into a cooperative purchasing system, as defined in
subsection ee. of N.J.S.18A:18A-2, for the procurement of the goods or services
will result in cost savings.� A cost savings analysis prescribed by the
Division of Local Government Services in the Department of Community Affairs
pursuant to section 10 of P.L.�� �, c.��� (C.������� ) (pending before the
Legislature as this bill) shall include, but not be limited to, factors such as
charges for service, materials, delivery, soft costs, costs of acquisition, and
other costs of traditional bidding such as cost overruns, protest, rework, and
change orders.� If the purchasing agent determines that entering into a
cooperative purchasing system for the procurement of goods or services will
result in cost savings, the board of education shall utilize a cooperative
purchasing system.�

����
m.�� Prior to entering into
a contract for the procurement of any goods or services, the board of education
shall ensure that the contractor and any subcontractors are compliant with
existing State and federal laws, rules, and regulations as enumerated in
subsection c. of N.J.S.18A:18A-3.

(cf: P.L.2009, c.4, s.2)

���� 5.��� N.J.S.18A:18A-11 is
amended to read as follows:

���� 18A:18A-11.� a.� The boards of
education of two or more districts may provide jointly by agreement for the
provision and performance of goods and services for their respective districts,
or one or more boards of education may provide for such provision or
performance of goods or services by joint agreement with the governing body of
any municipality or county.

���� Any joint purchasing agreement
between the boards of education of two or more school districts may include, as
additional participating bodies, nonpublic schools located within the
municipalities that comprise those school districts.

���� b.��� As used in this section,
"nonpublic school" means an elementary or secondary school within the
State, other than a public school, offering education for grades kindergarten
through 12, or any combination of them, wherein any child may legally fulfill
compulsory school attendance requirements and which complies with the
requirements of Title VI of the Civil Rights Act of 1964, Pub.L.88-352 (42
U.S.C. s.2000d et seq.).

����
c.���� Notwithstanding the
provisions of this section to the contrary, prior to the procurement of any
goods or services pursuant to this section, the purchasing agent shall
determine if entering into a cooperative purchasing system, as defined in
subsection ee. of N.J.S.18A:18A-2, for the procurement of the goods or services
will result in cost savings. �A cost savings analysis prescribed by the
Division of Local Government Services in the Department of Community Affairs
pursuant to section 10 of P.L.��� , c.��� (C.������� ) (pending before the
Legislature as this bill) shall include, but not be limited to, factors such as
charges for service, materials, delivery, soft costs, costs of acquisition, and
other costs of traditional bidding such as cost overruns, protest, rework, and
change orders.� If the purchasing agent determines that entering into a
cooperative purchasing system for the procurement of goods or services will
result in cost savings, the board of education shall utilize a cooperative
purchasing system.�

����
d.��� Prior to entering
into a contract for the procurement of any goods or services, the board of
education shall ensure that the contractor and any subcontractors are compliant
with existing State and federal laws, rules, and regulations as enumerated in
subsection c. of N.J.S.18A:18A-3.

(cf: P.L.2013, c.262, s.1)

���� 6.��� Section 2 of P.L.1971,
c.198 (C.40A:11-2) is amended to read as follows:

���� 2.��� As used herein the
following words have the following definitions, unless the context otherwise
indicates:

���� (1)�� "Contracting
unit" means:

���� (a)�� Any county;
[
or
]

���� (b)�� Any municipality; or

���� (c)�� Any board, commission,
committee, authority or agency, which is not a State board, commission,
committee, authority, except as provided pursuant to P.L.2013, c.4, or agency,
and which has administrative jurisdiction over any district other than a school
district, project, or facility, included or operating in whole or in part,
within the territorial boundaries of any county or municipality which exercises
functions which are appropriate for the exercise by one or more units of local
government, including functions exercised in relation to the administration and
oversight of a tourism district located in a municipality in which authorized
casino gaming occurs, and which has statutory power to make purchases and enter
into contracts awarded by a contracting agent for the provision or performance
of goods or services.

���� The term shall not include a
private firm that has entered into a contract with a public entity for the
provision of water supply services pursuant to P.L.1995, c.101 (C.58:26-19 et
al.).

���� "Contracting unit"
shall not include a private firm or public authority that has entered into a
contract with a public entity for the provision of wastewater treatment
services pursuant to P.L.1995, c.216 (C.58:27-19 et al.).

���� "Contracting unit"
shall not include a duly incorporated nonprofit association that has entered
into a contract with the governing body of a city of the first class for the
provision of water supply services or wastewater treatment services pursuant to
section 2 of P.L.2002, c.47 (C.40A:11-5.1).

���� "Contracting unit"
shall not include an entity that has entered into a contract for management and
operation services with a local hospital authority established pursuant to
P.L.2006, c.46

(C.30:9-23.15 et al.).

���� (2)�� "Governing
body" means:

���� (a)�� The governing body of
the county, when the purchase is to be made or the contract or agreement is to
be entered into by, or on behalf of, a county;
[
or
]

���� (b)�� The governing body of
the municipality, when the purchase is to be made or the contract or agreement
is to be entered into by, or on behalf of, a municipality; or

���� (c)�� Any board, commission,
committee, authority or agency of the character described in subsection (1) (c)
of this section.

���� (3)�� "Contracting
agent" means the governing body of a contracting unit, or appointed
membership of a State authority authorized to enter into a cooperative
purchasing agreement pursuant to P.L.2013, c.4, or its authorized designee,
which has the power to prepare the advertisements, to advertise for and receive
bids and, as permitted by
[
this
act,
]

the
"Local Public Contracts Law," P.L.1971, c.198 (C.40A:11-1 et seq.),

to make awards for the contracting unit in connection with purchases, contracts
or agreements.

���� (4)�� "Purchase"
means a transaction, for a valuable consideration, creating or acquiring an
interest in goods, services and property, except real property or any interest
therein.

���� (5)�� (Deleted by amendment,
P.L.1999, c.440
[
.
]
)

���� (6)�� "Professional
services" means services rendered or performed by a person authorized by
law to practice a recognized profession, whose practice is regulated by law,
and the performance of which services requires knowledge of an advanced type in
a field of learning acquired by a prolonged formal course of specialized
instruction and study as distinguished from general academic instruction or
apprenticeship and training.� Professional services may also mean services
rendered in the provision or performance of goods or services that are original
and creative in character in a recognized field of artistic endeavor.

���� (7)�� "Extraordinary
unspecifiable services" means services which are specialized and
qualitative in nature requiring expertise, extensive training and proven
reputation in the field of endeavor.

���� (8)�� (Deleted by amendment,
P.L.1999, c.440
[
.
]
)

���� (9)�� "Work"
includes services and any other activity of a tangible or intangible nature
performed or assumed pursuant to a contract or agreement with a contracting
unit.

���� (10) "Homemaker--home
health services" means at home personal care and home management provided
to an individual or members of the individual's family who reside with the
individual, or both, necessitated by the individual's illness or incapacity.
"Homemaker--home health services" includes, but is not limited to,
the services of a trained homemaker.

���� (11) "Recyclable
material" means those materials which would otherwise become municipal
solid waste, and which may be collected, separated or processed and returned to
the economic mainstream in the form of raw materials or products.

���� (12) "Recycling"
means any process by which materials which would otherwise become solid waste
are collected, separated or processed and returned to the economic mainstream
in the form of raw materials or products.

���� (13) "Marketing"
means the sale, disposition, assignment, or placement of designated recyclable
materials with, or the granting of a concession to, a reseller, processor,
materials recovery facility, or end-user of recyclable material, in accordance
with a district solid waste management plan adopted pursuant to P.L.1970, c.39
(C.13:1E-1 et seq.) and shall not include the collection of such recyclable
material when collected through a system of routes by local government unit
employees or under a contract administered by a local government unit.

���� (14) "Municipal solid
waste" means, as appropriate to the circumstances, all residential,
commercial
,
and institutional solid waste generated within the
boundaries of a municipality; or the formal collection of such solid wastes or
recyclable material in any combination thereof when collected through a system
of routes by local government unit employees or under a contract administered
by a local government unit.

���� (15) "Distribution"
(when used in relation to electricity) means the process of conveying
electricity from a contracting unit that is a generator of electricity or a
wholesale purchaser of electricity to retail customers or other end users of electricity.

���� (16) "Transmission"
(when used in relation to electricity) means the conveyance of electricity from
its point of generation to a contracting unit that purchases it on a wholesale
basis for resale.

���� (17) "Disposition"
means the transportation, placement, reuse, sale, donation, transfer
,
or
temporary storage of recyclable materials for all possible uses except for
disposal as municipal solid waste.

���� (18) "Cooperative
marketing" means the joint marketing by two or more contracting units of
the source separated recyclable materials designated in a district recycling
plan required pursuant to section 3 of P.L.1987, c.102 (C.13:1E-99.13) pursuant
to a written cooperative agreement entered into by the participating
contracting units thereof.

���� (19) "Aggregate"
means the sums expended or to be expended for the provision or performance of
any goods or services in connection with the same immediate purpose or task, or
the furnishing of similar goods or services, during the same contract year
through a contract awarded by a contracting agent.

���� (20) "Bid threshold"
means the dollar amount set in section 3 of P.L.1971, c.198 (C.40A:11-3), above
which a contracting unit shall advertise for and receive sealed bids in
accordance with procedures set forth in P.L.1999, c.440 (C.40A:11-4.1 et al.).

���� (21) "Contract"
means any agreement, including but not limited to a purchase order or a formal
agreement, which is a legally binding relationship enforceable by law, between
a vendor who agrees to provide or perform goods or services and a contracting
unit which agrees to compensate a vendor, as defined by and subject to the
terms and conditions of the agreement.� A contract also may include an
arrangement whereby a vendor compensates a contracting unit for the vendor's
right to perform a service, such as, but not limited to, operating a
concession.

���� (22) "Contract year"
means the period of 12 consecutive months following the award of a contract.

���� (23) "Competitive
contracting" means the method described in sections 1 through 5 of
P.L.1999, c.440 (C.40A:11-4.1
[
thru
]

through C.
40A:11-4.5)
of contracting for specialized goods and services in which formal proposals are
solicited from vendors; formal proposals are evaluated by the purchasing agent
or counsel or administrator; and the governing body awards a contract to a
vendor or vendors from among the formal proposals received.

���� (24) "Goods and
services" or "goods or services" means any work, labor,
commodities, equipment, materials, or supplies of any tangible or intangible
nature, except real property or any interest therein, provided or performed
through a contract awarded by a contracting agent, including goods and property
subject to N.J.S.12A:2-101 et seq.

���� (25) "Library and
educational goods and services" means textbooks, copyrighted materials,
student produced publications and services incidental thereto, including but
not limited to books, periodicals, newspapers, documents, pamphlets, photographs,
reproductions, microfilms, pictorial or graphic works, musical scores, maps,
charts, globes, sound recordings, slides, films, filmstrips, video and magnetic
tapes, other printed or published matter and audiovisual and other materials of
a similar nature, necessary binding or rebinding of library materials, and
specialized computer software used as a supplement or in lieu of textbooks or
reference material.

���� (26) "Lowest price"
means the least possible amount that meets all requirements of the request of a
contracting agent.

���� (27) "Lowest responsible
bidder or vendor" means the bidder or vendor:� (a) whose response to a
request for bids offers the lowest price and is responsive; and (b) who is
responsible.

���� (28) "Official
newspaper" means any newspaper designated by the contracting unit pursuant
to R.S.35:1-1 et seq.

���� (29) "Purchase
order" means a document issued by the contracting agent authorizing a
purchase transaction with a vendor to provide or perform goods or services to
the contracting unit, which, when fulfilled in accordance with the terms and
conditions of a request of a contracting agent and other provisions and
procedures that may be established by the contracting unit, will result in
payment by the contracting unit.

���� (30) "Purchasing
agent" means the individual duly assigned the authority, responsibility,
and accountability for the purchasing activity of the contracting unit, and who
has such duties as are defined by an authority appropriate to the form and
structure of the contracting unit, pursuant to
the �Local Public Contracts
Law,���
P.L.1971, c.198 (C.40A:11-1 et seq.) and who possesses a qualified
purchasing agent certificate.

���� (31) "Quotation"
means the response to a formal or informal request made by a contracting agent
by a vendor for provision or performance of goods or services, when the
aggregate cost is less than the bid threshold.� Quotations may be in writing,
or taken verbally if a record is kept by the contracting agent.

���� (32) "Responsible"
means able to complete the contract in accordance with its requirements,
including but not limited to requirements pertaining to experience, moral
integrity, operating capacity, financial capacity, credit, and workforce, equipment,
and facilities availability.

���� (33) "Responsive"
means conforming in all material respects to the terms and conditions,
specifications, legal requirements, and other provisions of the request.

���� (34) "Public works"
means building, altering, repairing, improving
,
or demolishing any
public structure or facility constructed or acquired by a contracting unit to
house local government functions or provide water, waste disposal, power,
transportation, and other public infrastructures.

���� (35) "Director"
means the Director of the Division of Local Government Services in the
Department of Community Affairs.

���� (36) "Administrator"
means a municipal administrator appointed pursuant to N.J.S.40A:9-136 and
N.J.S.40A:9-137; a business administrator, a municipal manager or a municipal
administrator appointed pursuant to the "Optional Municipal Charter
Law," P.L.1950, c.210 (C.40:69A-1 et seq.); a municipal manager appointed
pursuant to "the municipal manager form of government law,"
R.S.40:79-1 et seq.; or the person holding responsibility for the overall
operations of an authority that falls under the "Local Authorities Fiscal
Control Law," P.L.1983, c.313 (C.40A:5A-1 et seq.).

���� (37) "Concession"
means the granting of a license or right to act for or on behalf of the
contracting unit, or to provide a service requiring the approval or endorsement
of the contracting unit, and which may or may not involve a payment or exchange,
or provision of services by or to the contracting unit.

���� (38) "Index rate"
means the rate of annual percentage increase, rounded to the nearest
half-percent, in the Implicit Price Deflator for State and Local Government
Purchases of Goods and Services, computed and published quarterly by the United
States Department of Commerce, Bureau of Economic Analysis.

���� (39) "Proprietary"
means goods or services of a specialized nature, that may be made or marketed
by a person or persons having the exclusive right to make or sell them, when
the need for such goods or services has been certified in writing by the
governing body of the contracting unit to be necessary for the conduct of its
affairs.

���� (40) "Service or
services" means the performance of work, or the furnishing of labor, time,
or effort, or any combination thereof, not involving or connected to the
delivery or ownership of a specified end product or goods or a manufacturing process.�
Service or services may also include an arrangement in which a vendor
compensates the contracting unit for the vendor's right to operate a
concession.

���� (41) "Qualified
purchasing agent certificate" means a certificate granted by the director
pursuant to section 9 of P.L.1971, c.198 (C.40A:11-9).

���� (42) "Mistake"
means, for a public works project, a clerical error that is an unintentional
and substantial computational error or an unintentional omission of a
substantial quantity of labor, material, or both, from the final bid
computation.

����
(43) "Cooperative
purchasing system" means a cooperative pricing system, joint purchasing
system, commodity resale system, county cooperative contract purchasing system,
or regional cooperative pricing system in which a local contracting unit, or in
which two or more local contracting units, enter into a contract for the
procurement of goods or services.

(cf: P.L.2016, c.55, s.8)

���� 7.��� Section 3 of P.L.1971,
c.198 (C.40A:11-3) is amended to read as follows:

���� 3.��� a. (1) When the cost or
price of a contract, in the aggregate, does not exceed in a contract year the
total sum of $17,500, the governing body, by ordinance or resolution, as
appropriate to the contracting unit, may authorize a purchasing agent or other designated
employee to award the contract without public advertising for bids.

���� (2)�� Notwithstanding the
provisions of any other law, rule, or regulation to the contrary, a contract
having an anticipated value in excess of $17,500, but below the contracting
unit's applicable public bidding threshold, is not required to be awarded by
the governing body of the contracting unit and may be awarded by the qualified
purchasing agent of the contracting unit.

���� (3)�� The governing body of a
contracting unit that has designated a purchasing agent pursuant to subsection
a. of section 9 of P.L.1971, c.198 (C.40A:11-9) may establish a bid threshold
of up to $25,000 or the threshold amount adjusted by the Governor pursuant to
subsection c. of this section.

���� (4)�� The governing body of
any contracting unit may adopt an ordinance or resolution to set a lower
threshold for the receipt of public bids or the solicitation of competitive
quotations.

���� (5)�� Bidding thresholds
established by the governing body of a contracting unit pursuant to paragraphs
(2) or (3) of this subsection may be granted for each contract or by a general
delegation of the power to negotiate and award the contracts pursuant to this
section.

���� b.��� Any contract made
pursuant to this section may be awarded for a period of up to 24 consecutive
months, except that contracts for professional services pursuant to
subparagraph (i) of paragraph (a) of subsection (1) of section 5 of P.L.1971,
c.198 (C.40A:11-5) may be awarded for a period not exceeding 12 consecutive
months.� The Division of Local Government Services shall adopt and promulgate
rules and regulations concerning the methods of accounting for all contracts
that do not coincide with the contracting unit's fiscal year.

���� c.���� 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
(C.40A:11-4.1 et al)
takes effect, adjust the threshold
amount, in direct proportion to the rise 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 each governing body of the adjustment.� The adjustment
shall become effective on July 1 of the year in which it is made.

����
d.��� Prior to entering
into a contract for the procurement of any goods or services, the contracting
unit shall ensure that the contractor and any subcontractors are complaint with
existing State and federal laws, rules, and regulations concerning:

����
(1)�� the
antidiscrimination provisions of R.S.10:2-1 through R.S.10:2-4;

����
(2)�� the "Law Against
Discrimination," P.L.1945, c.169 (C.10:5-1 et seq.);

����
(3)�� the
antidiscrimination, equal employment opportunity, and affirmative action
provisions applicable pursuant to P.L.1975, c.127 (C.10:5-31 et seq.);

����
(4) business registration
requirements pursuant to P.L.2001, c.134 (C.52:32-44 et al.);

����
(5)�� the contribution
restriction provisions pursuant P.L.2005, c.51 (C.19:44A-20.13 et seq.);

����
(6)�� prevailing wage
requirements pursuant to P.L.1963, c.150 (C.34:11-56.25 et seq.);

����
(7)�� the provisions of the
"Sales and Use Tax Act," P.L.1966, c.30 (C.54:32B-1 et seq.)

����
(8)�� the American goods
sourcing provisions of section 18 of P.L.1971, c.198 (C.40A:11-18);

����
(9)�� valid classification
in a trade as issued by the Division of Property Management and Construction in
the Department of Treasury;

����
(10) submission of a sworn
contractor certification pursuant to section 63 of P.L.2000, c.72
(C.18A:7G-37);

����
(11) compliance by local
government officers and employees pursuant to section 5 of P.L.1991, c.29
(C.40A:9-22.5);

����
(12) provisions concerning
the disclosure of investment activities in Iran pursuant to P.L.2012, c.25
(C.52:32-55 et al.); and

����
(13) provisions concerning
the prohibited activities in Belarus and Russia pursuant to section 7 of
P.L.2022, c.3 (C.52:32-60.2).�

(cf: P.L.2023, c.252, s.6)

���� 8.��� Section 4 of P.L.1971,
c.198 (C.40A:11-4) is amended to read as follows:

���� 4. a. Every contract awarded
by the contracting agent for the provision or performance of any goods or
services, the cost of which in the aggregate exceeds the bid threshold, shall
be awarded only by resolution of the governing body of the contracting unit to
the lowest responsible bidder after public advertising for bids and bidding
therefor, except as is provided otherwise in this act or specifically by any
other law. The governing body of a contracting unit may, by resolution approved
by a majority of the governing body and subject to subsections b. and c. of
this section, disqualify a bidder who would otherwise be determined to be the
lowest responsible bidder, if the governing body finds that it has had prior
negative experience with the bidder.

���� b.��� As used in this section,
"prior negative experience" means any of the following:

���� (1)�� the bidder has been
found, through either court adjudication, arbitration, mediation, or other
contractually stipulated alternate dispute resolution mechanism, to have:
failed to provide or perform goods or services; or failed to complete the
contract in a timely manner; or otherwise performed unsatisfactorily under a
prior contract with the contracting unit;

���� (2)�� the bidder defaulted on
a contract, thereby requiring the local unit to utilize the services of another
contractor to provide the goods or perform the services or to correct or
complete the contract;

���� (3)�� the bidder defaulted on
a contract, thereby requiring the local unit to look to the bidder's surety for
completion of the contract or tender of the costs of completion; or

���� (4)�� the bidder is debarred
or suspended from contracting with any of the agencies or departments of the
executive branch of the State of New Jersey at the time of the contract award,
whether or not the action was based on experience with the contracting unit.

���� c.���� The following
conditions apply if the governing body of a contracting unit is contemplating a
disqualification based on prior negative experience:

���� (1)�� The existence of any of
the indicators of prior negative experience set forth in this section shall not
require that a bidder be disqualified.� In each instance, the decision to
disqualify shall be made within the discretion of the governing body and shall
be rendered in the best interests of the contracting unit.

���� (2)�� All mitigating factors
shall be considered in determining the seriousness of the prior negative
experience and in deciding whether disqualification is warranted.

���� (3)�� The bidder shall be
furnished by the governing body with a written notice (a) stating that a
disqualification is being considered; (b) setting forth the reason for the
disqualification; and (c) indicating that the bidder shall be accorded an
opportunity for a hearing before the governing body if the bidder so requests
within a stated period of time.� At the hearing, the bidder shall show good
cause why the bidder should not be disqualified by presenting documents and
testimony.� If the governing body determines that good cause has not been shown
by the bidder, it may vote to find the bidder lacking in responsibility and,
thus, disqualified.

���� (4)�� Disqualification shall
be for a reasonable, defined period of time which shall not exceed five years.

���� (5)�� A disqualification,
other than a disqualification pursuant to which a governing body is prohibited
by law from entering into a contract with a bidder, may be voided or the period
thereof may be reduced, in the discretion of the governing body, upon the submission
of a good faith application under oath, supported by documentary evidence,
setting forth substantial and appropriate grounds for the granting of relief,
such as reversal of a judgment, or actual change of ownership, management or
control of the bidder.

���� (6)�� An opportunity for a
hearing need not be offered to a bidder whose disqualification is based on its
suspension or debarment by an agency or department of the executive branch of
the State of New Jersey.� The term of such a disqualification shall be concurrent
with the term of the suspension or debarment by the State agency or department.

����
d.��� Notwithstanding the
provisions of this section to the contrary, prior to the procurement of any
goods or services pursuant to this section, the purchasing agent shall
determine if entering into a cooperative purchasing system, as defined in
section 2 of P.L.1971, c.198 (C.40A:11-2), for the procurement of the goods or
services will result in cost savings.� A cost savings analysis prescribed by
the Division of Local Government Services in the Department of Community
Affairs pursuant to section 10 of P.L.��� , c.��� (C.������� ) (pending before
the Legislature as this bill) shall include, but not be limited to, factors
such as charges for service, materials, delivery, soft costs, costs of
acquisition, and other costs of traditional bidding such as cost overruns,
protest, rework, and change orders.� If the purchasing agent determines that
entering into a cooperative purchasing system for the procurement of goods or
services will result in cost savings, the contracting unit shall utilize a
cooperative purchasing system.�

����
e.���� Prior to entering
into a contract for the procurement of any goods or services, the contracting
unit shall ensure that the contractor and any subcontractors are compliant with
existing State and federal laws, rules, and regulations as enumerated in
subsection d. of section 3 of P.L.1971, c.198 (C.40A:11-3).

(cf: P.L.1999, c.440, s.8)

���� 9.��� Section 1 of P.L.1999,
c.440 (C.40A:11-4.1) is amended to read as follows:

���� 1.��� Notwithstanding the
provisions of any law, rule, or regulation to the contrary, competitive
contracting may be used by local contracting units in lieu of public bidding
for procurement of specialized goods and services the price of which exceeds
the bid threshold, for the following purposes:

���� a.���� The purchase or
licensing of proprietary computer software designed for contracting unit
purposes, which may include hardware intended for use with the proprietary
software.� This subsection shall not be utilized for the purpose of acquiring
general purpose computer hardware or software;

���� b.��� The hiring of a
for-profit entity or a not-for-profit entity incorporated under Title 15A of
the New Jersey Statutes for the purpose of:

���� (1)�� the operation and
management of a wastewater treatment system, a stormwater management system, or
a water supply or distribution facility of the type described in subsection
(37) of section 15 of P.L.1971, c.198 (C.40A:11-15), provided that competitive
contracting shall not be used as a means of awarding contracts pursuant to
P.L.1985, c.37 (C.58:26-1 et al.) and P.L.1985, c.72 (C.58:27-1 et al.);

���� (2)�� the operation,
management or administration of recreation or social service facilities or
programs, which shall not include the administration of benefits under the Work
First New Jersey program established pursuant to P.L.1997, c.38 (C.44:10-55 et
seq.), or under General Assistance;

���� (3)�� the operation,
management or administration of data processing services; or

���� (4)�� the operation and
management of a county hospital pursuant to the "Local Hospital Authority
Law," P.L.2006, c.46 (C.30:9-23.15 et al.);

���� c.���� (Deleted by amendment,
P.L.2009, c.4)

���� d.��� Homemaker--home health
services;

���� e.���� Laboratory testing
services;

���� f.���� Emergency medical
services;

���� g.��� Contracted food
services;

���� h.��� Performance of patient
care services by contracted medical staff at county hospitals, correctional
facilities and long-term care facilities;

���� i.���� At the option of the
governing body of the contracting unit, any good or service that is exempt from
bidding pursuant to section 5 of P.L.1971, c.198 (C.40A:11-5);

���� j.���� Concessions;

���� k.��� The operation,
management or administration of other services, with the approval of the
Director of the Division of Local Government Services;

���� l.���� Maintenance, custodial,
and groundskeeping services;

���� m.�� Consulting services;

���� n.��� Emergency medical
billing services;

���� o.��� Property appraisal
services;

���� p.��� Reassessment or
revaluation services;

���� q.��� Grant writing services;

���� r.���� Animal control
services;

���� s.���� Private on-site
inspection agency services, as may be authorized by rules and regulations
adopted by the Department of Community Affairs.

���� Any purpose included herein
shall not be considered by a contracting unit as an extraordinary unspecifiable
service pursuant to subparagraph (ii) of paragraph (a) of subsection (1) of
section 5 of P.L.1971, c.198 (C.40A:11-5).

���� As used in this section,
"stormwater management system" means the same as that term is defined
in section 3 of P.L.2019, c.42 (C.40A:26B-3).

����
Notwithstanding the
provisions of this section to the contrary, prior to the procurement of any
goods or services pursuant to this section, the purchasing agent shall
determine if entering into a cooperative purchasing system, as defined in
section 2 of P.L.1971, c.198 (C.40A:11-2), for the procurement of the goods or
services will result in cost savings.� A cost savings analysis prescribed by
the Division of Local Government Services in the Department of Community
Affairs pursuant to section 10 of P.L.��� , c.��� (C.������� ) (pending before
the Legislature as this bill) shall include, but not be limited to, factors
such as charges for service, materials, delivery, soft costs, costs of
acquisition, and other costs of traditional bidding such as cost overruns,
protest, rework, and change orders.� If the purchasing agent determines that
entering into a cooperative purchasing system for the procurement of goods or
services will result in cost savings, the contracting unit shall utilize a
cooperative purchasing system.�

����
Prior to entering into a
contract for the procurement of any goods or services, the contracting unit
shall ensure that the contractor and any subcontractors are compliant with
existing State and federal laws, rules, and regulations as enumerated in
subsection d. of section 3 of P.L.1971, c.198 (C.40A:11-3).

(cf: P.L.2022, c.139, s.3)

���� 10.� (New section) �� a.����� Notwithstanding
any law, rule, or regulation to the contrary, the Director of the Division of
Local Government Services in the Department of Community Affairs, in
consultation with the Commissioner of Education, shall develop harmonized
guidelines for a local contracting unit, including a board of education, to
enter into cooperative purchasing systems.�

���� b.��� The cooperative
purchasing system guidelines developed pursuant to subsection a. of this
section shall include, but not be limited to:

���� (1)�� the types of goods and
services, including work, labor, commodities, equipment, materials, or supplies
of any tangible or intangible nature, except real property or any interest
therein, that may be procured through a contract awarded by a contracting agent
under a cooperative purchasing system, including goods and property subject to
N.J.S.12A:2-101 et seq.;

���� (2)�� the requirements
concerning the process for advertising and soliciting bids for contracts
through a cooperative purchasing system, and the factors that shall be utilized
in the awarding of contracts;

���� (3)�� provisions ensuring
local contracting units enter into contracts for the procurement of goods or
services through a cooperative purchasing system with contractors and
subcontractors that are compliant with existing State and federal laws, rules,
and regulations as enumerated in subsection d. of N.J.S.18A:18A-3 and
subsection e. of section 3 of P.L.1971, c.198 (C.40A:11-3); and

���� (4)�� information outlining
the benefits of entering into cooperative purchasing systems, including but not
limited to: cost-savings for the procurement of goods and services; access to
experienced and reliable contractors and subcontractors; improvements in project
execution time; elimination of pre-bid costs; and guaranteed maximum pricing to
eliminate unforeseen expenses.

���� c.���� The division shall
distribute the guidelines developed pursuant to subsection a. of this section
to the governing body of each municipality, county, and school district in this
State.

���� d.��� The division shall
publish the cooperative purchasing system guidelines developed pursuant to
subsection a. of this section on the division�s Internet website in an easily
accessible location and format.

���� e.���� The division shall
develop a cost savings analysis template comparing the costs of cooperative
purchasing systems and other methods of procurement including, but not limited
to, factors such as charges for service, materials, delivery, soft costs, costs
of acquisition, and other costs of traditional bidding such as cost overruns,
protest, rework, and change orders. The division shall:

���� (1) distribute the template to
the governing body of each municipality, county, and school district in this
State; and

���� (2)�� publish the cost savings
analysis template on the division�s Internet website in an easily accessible
location and format.

���� f.���� As used in this
section:

���� "Cooperative purchasing
system" means a cooperative pricing system, joint purchasing system,
commodity resale system, county cooperative contract purchasing system, or
regional cooperative pricing system in which a local contracting unit, or in
which two or more local contracting units, enter into a contract for the
procurement of goods or services.

���� "Local contracting
unit" means a board of education, as defined in and subject to the
provisions of the �Public School Contracts Law,� N.J.S.18A:18A-1 et seq., or a
local contracting unit, as defined in and subject to the provisions of the
"Local Public Contracts Law," P.L.1971, c.198 (C.40A:11-1 et seq.).

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

STATEMENT

���� This bill requires certain
political subdivision contracting units (contracting units), including boards
of education and local contracting units under the "Local Public Contracts
Law," P.L.1971, c.198 (C.40A:11-1 et seq.), to determine and utilize
cost-saving practices when procuring goods and services.� The bill provides
that a cost savings analysis prescribed by the Division of Local Government
Services in the Department of Community Affairs is required to include, at a
minimum: factors such as charges for service, materials, delivery, soft costs,
costs of acquisition, and other costs of traditional bidding such as cost
overruns, protest, rework, and change orders.� If the purchasing agent
determines that entering into a cooperative purchasing system for the
procurement of goods or services will result in cost savings, the contracting
unit is required to utilize a cooperative purchasing system.

���� Under the bill, prior to
entering into a contract for the procurement of any goods or services, the
contracting unit is required to ensure that the contractor and any
subcontractors are compliant with existing State and federal laws, rules, and
regulations including, but not limited to, employment discrimination,
employment opportunity, wage requirements, and material and product sourcing.

���� This bill also requires the
Director of the Division of Local Government Services in the Department of
Community Affairs, in consultation with the Commissioner of Education, to
develop harmonized guidelines for a local contracting unit, including boards of
education, to enter into cooperative purchasing systems for the procurement of
goods or services.�

���� Under the bill, the
cooperative purchasing system guidelines will include, but not be limited to:

�

the types of
goods and services, including work, labor, commodities, equipment, materials,
or supplies of any tangible or intangible nature, except real property, that
may be procured through a contract awarded by a contracting agent under a
cooperative purchasing system;

�

the
requirements concerning the process for advertising and soliciting bids for
contracts through a cooperative purchasing system, and the factors that are
required to be utilized in the awarding of contracts;

�

provisions
ensuring contracting units enter into contracts for the procurement of goods or
services through a cooperative purchasing system with contractors and
subcontractors that are compliant with existing State and federal laws, rules,
and regulations related to employment discrimination, employment opportunity,
wage requirements, and material and product sourcing, and any other standards
determined by the director to be appropriate for inclusion; and

�

information
outlining the benefits of entering into cooperative purchasing systems,
including but not limited to: cost-savings for the procurement of goods and
services; access to experienced and reliable contractors and subcontractors;
improvements in project execution time; elimination of pre-bid costs; and
guaranteed maximum pricing to eliminate unforeseen expenses.

���� The division is required to
develop a cost savings analysis template comparing the costs of cooperative
purchasing systems and other methods of procurement including, but not limited
to, factors such as charges for
service,
materials
, delivery, soft costs, costs of acquisition, and other costs
of traditional bidding such as cost overruns, protest, rework, and change
orders. The division will: (1) distribute the template to the governing body of
each municipality, county, and school district in the State; and (2) publish
the cost savings analysis template on the division�s Internet website in an
easily accessible location and format.

���� Under the bill, the division
is required to distribute the guidelines to the governing body of each
municipality, county, and school district in this State, and publish the
guidelines on the division�s Internet website in an easily accessible location
and format.