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Note: This list of Frequently Asked Questions uses the following generic terms and references:

• Contracting unit means municipalities, counties, authorities, fire districts and local boards of education that are subject to the Local Public Contracts Law and the Public School Contracts Law

• Governing Body means the appointed or elected officials that supervise the contracting units. Generally this refers to the elected board of education (board of trustees, for charter schools) or municipal council (or other such title), board of chosen freeholders, or authority or fire district board of commissioners, based on the structure of the contracting unit.

• DLGS means the Division of Local Government Services in the Department of Community Affairs

• DOE means the Department of Education

• LPCL refers to the Local Public Contracts Law

• PSCL refers to the Public School Contracts Law

Subjects covered in this FAQ:

Why are we required to competitively bid for goods and services?
As public servants, we are required to spend public funds (i.e. taxpayer funds) in the most efficient way, by obtaining the best possible prices for goods and services. Whenever feasible, purchases made using public funds which exceed certain thresholds (see below) must be actively quoted, or formally bid through a fair, competitive sealed bid, or when permitted, through a competitive contracting process that is open to the public. Any resulting contract, including purchase orders, must be awarded to the lowest responsible bidder (with limited exceptions), following state rules, guidelines and standard procurement practices.

What are the legal citations for the Local Public Contracts Law and Public School Contracts Law?
Cites for the laws are N.J.S.A. 40A:11-1 et seq. for the Local Public Contracts Law and N.J.S.A. 18A:18A-1 et seq. for the Public School Contracts Law. Regulations for both laws can be found in N.J.A.C. 5:34-1 et seq.

Are there any provisions of the law that are not in effect today?
Yes, the bid threshold of $25,000 will not be in effect until the rules are adopted establishing the Qualified Purchasing Agent. Also, the use of the Federal Supply Schedules of the U.S. General Services Administration contracts for reprographic equipment or services will not be in effect until the Division of Purchase and Property adopts rules. For more information on bidding, see the section under "Bid Threshold."

When can the bid threshold be increased to $25,000?
The current bid threshold can be increased to $25,000 by resolution by the governing body once a Qualified Purchasing Agent has been appointed. Currently, the DLGS, in conjunction with the DOE, is preparing the rules for the Qualified Purchasing Agent.

Who is the purchasing agent in a contracting unit?
Under the Public School Contracts Law, in a school district, the law defines the purchasing agent as the secretary, business administrator or business manager of the local board, or in the absence of these, an authorized designee of the local board (N.J.S.A. 18A:18A-2). Under the Local Public Contracts Law, the law defines the purchasing agent as the individual duly assigned the authority, responsibility and accountability for the purchasing of the contracting unit (N.J.S.A. 40A:11-2).

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What is Aggregation?
Aggregation means all goods and services that are "single in character or necessary" purchased during the same contract year, which, by reason of the similar type or nature, are required to be combined into one contract specification.

Are professional services subject to aggregation?
No, aggregation uses the bid threshold. Professional services are exempt from bidding.

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Is there any advice about disclosing the bid estimate or appropriation during the bidding process?
The Attorney General’s Office advises against disclosing the bid estimate or specific appropriation during the bidding process. The rationale is similar to purchasing a vehicle. During the negotiations for the vehicle, you do not disclose to the car sales representative your budget or your bottom line figure, in order to get the best price available.

What are the new requirements of the anti-discrimination clause?
The discrimination clause has been changed to reflect the federal discrimination clause. The clause now reads as follows: "… on the basis of race, religion, sex, national origin, creed, color, ancestry, age, martial status, affectional or sexual orientation, familial status, liability for service in the Armed Forces of the United States, or nationality." Bid documents should be amended to incorporate the change.

What are the types of challenges to bid specifications?
Challenges may include the following: specifications are illegal; violate certain laws; are too restrictive or have technical errors. All of those apply. However, to have validity, the challenger must have a precise reason, or note a specific problem.

Does the local contracting unit need to respond to written bid challenges received?
Yes, the written challenge must be acknowledged in writing.

If the contracting unit is aware of a bid specifications problem and no contractor challenges the specifications three days prior to the bid opening, is the contracting unit allowed to "get a free ride" in awarding a contract?
The contracting unit is obligated to revise bid specifications prior to a bid opening or to postpone the bid opening if it is aware that a problem exists. However, if the contracting unit is unaware of the problem until after the bid opening and the error is substantial then they may consider using the law that permits the rejection of all bids. (N.J.S.A. 40A:11-13.2(e) and N.J.S.A.18A:18A-22)

Do challenges to bid specifications affect the provision that all addendums must be issued 5 business days before the bid?
Yes. If someone comes in at the three-day mark and it is determined that the challenge is valid, the only option for the contracting unit is to postpone the bid opening to a date after the problem can be corrected, with the necessary notice to the potential bidders. Depending on the problem, it may require a readvertisement in an official newspaper. See N.J.S.A. 40A:11-13 or N.J.S.A. 18A:18A-15.

Does a challenge to bid specifications affect the law that bids must be advertised 10 days prior to the receipt and opening of bids?
No, bids still must be advertised at least 10 days before the bid opening.

How Does a contracting unit postpone a bid opening?
The following steps should be taken to postpone a bid opening:

1. The contracting unit must notify by telephone or fax all vendors who have submitted bids or obtained bid specifications that the bid opening has been postponed.

2. The contracting unit must return any bids already received.

3. On the date of the postponed bid opening, a representative of the contracting unit must go to the bid opening location at the scheduled opening time to inform anyone in attendance that the receipt of the bids has been cancelled. No bids should be received or opened at this time.

4. In addition to readvertising, the contracting unit must contact all vendors who initially submitted bids or received a set of specifications and inform them of the new date, time and location for the receipt of bids.
   
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What is the "bid threshold"?
The bid threshold is the cost at which you are required to publicly solicit bids in order to purchase goods or services. For costs at or above the bid threshold, you are required to issue a Request for Bids, or if you are using competitive contracting, a Request for Proposals, and advertise in an official newspaper. These contracts must be awarded by resolution of the governing body. As of April 17, 2000, the state's new bid threshold is $17,500. Once the approval process for the Qualified Purchasing Agent is established, the local contracting unit can increase the bid threshold to $25,000 by resolution.

Can a contracting unit set lower quote or bid thresholds than what is authorized by law?
Yes. If a governing body deems it appropriate, it may set lower thresholds for its contracting unit than the state law by passing a resolution, or as appropriate to the local unit, by amending its administrative code or other internal policy document.

What is required of the contracting unit to decrease the bid threshold of $17,500?
The governing body must adopt a resolution or, as appropriate to the local unit, amend its administrative code or other internal policy document, if the policy specifically establishes a bid threshold under $17,500.

What is required of the contracting unit to increase the bid threshold above $17,500?
To increase the bid threshold above $17,500, the local contracting unit must have a Qualified Purchasing Agent serving as the unit’s purchasing agent. Additional details will be included in the rules.

How much can be spent on goods and services without having to bid or obtain quotes?
A contracting unit may spend less than 15 percent of the bid threshold, i.e. less than $2,625 (or $3,750 if your unit has a Qualified Purchasing Agent; see previous question), with no requirement for bids or quotes. However, the governing body must establish this authorization through a resolution. In addition, you are still required to exercise sound business judgment when making these smaller purchases.

When is the governing body required to obtain quotes for purchases?
If the cost of the goods or services is at least 15 percent of the bid threshold but less than the bid threshold ($2,625 up to $17,500), then you are required to obtain a minimum of two competitive price quotes, if practicable. The award of contract is given to the vendor whose quote is deemed most advantageous to the local contracting unit, price and other factors considered.

What is the procedure to purchase items between $17,500 and $25,000 if the contracting unit has opted for the bid threshold of $25,000?
The 15 percent rule applies. If the goods or services can be purchased for less than $3,750 (15 percent of $25,000) use sound business judgment. If the goods or services cost more than $3,750, the local contracting unit must receive at least two (2) competitive quotes, if practicable.

Does the quote threshold (less than 15 percent of the bid threshold) rise when a contracting unit increases its bid threshold? Can it be 15 percent of $25,000?
Yes, the amount is always 15 percent, regardless of the local unit’s bid threshold.

How long will the bid and quotation thresholds remain the same?
The bid threshold level is adjusted every five years by the Governor, in consultation with the Department of Treasury, in direct proportion to the rise and fall of the index rate, rounded to the nearest $1,000. Notification of the adjustment is no later than June 1 of the fifth year and will take effect on July 1.

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If you are awarding a contract pursuant to the less than 10 percent of the state contract price provision, does the governing body have to award the contract?
The governing body must award all contracts over the bid threshold. Any such contract entered into pursuant to the "10 percent of the state contract price" provision may be awarded by adoption of a resolution with a 2/3 vote of the full membership of the governing body of the contracting unit.

When soliciting quotes using the provision of the 10 percent less than state contract price, do all three vendors have to quote under 10 percent before a contract can be awarded?
No, only one of the three vendors must provide a quote under 10 percent of the state contract price in order to use the provision.

When soliciting quotes using the provision of the 10 percent less than state contract price, can I solicit a quote from a vendor who has a state contract and agreed to extend the prices to local units?
No. The only exception is when a vendor who has a state contact that did not agree to provide state prices to local units.

What will the contracting unit be required to submit to the Division of Local Government Services when using the 10 percent less than the state contract price process?
A copy of the purchase order relating to any such contract, the requisition for purchase order, documentation identifying the price of the materials, supplies or equipment under state contract, the state contract number, and quotations received must be filed by the contracting unit with the director of the DLGS within five working days of the award of contract.

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What is competitive contracting?
Competitive contracting is an alternative method of soliciting offers through Requests for Proposals (RFPs) versus Requests for Bids. This method of solicitation may be more appropriate when purchasing specialized goods or services with characteristics that cannot easily be described using standard specifications, for example, the length, width, color, or type of material. By using locally defined evaluation criteria, it permits the award to be given to the vendor whose proposal is found to be the most advantageous, price and other factors considered, as opposed to the traditional lowest responsible bidder.

What items can be purchased using the competitive contracting process?
The law lists the purchases for which competitive contracting may be used, including the purchase and licensing of proprietary software, energy service companies, laboratory testing services, concessions, operation of recreation or social programs, operation of water or wastewater systems, or other services with the approval of the DLGS.

Are the threshold requirements the same for competitive contracting as they are for competitive bidding?
Yes, competitive contracting can be a substitute for competitive bidding.

Who can administer the competitive contracting process?
A Qualified Purchasing Agent, legal counsel or administrator of the contracting unit may administer a competitive contracting process. The governing body is also required to pass a resolution authorizing the use of this process whenever a good or service is to be purchased through a competitive contracting process for the first time.

When preparing the proposals for competitive contracting, do the requirements that otherwise relate to public bidding still apply?
All proposals for competitive contracting are required to include the statement of corporate ownership, equal employment opportunity and affirmative action statements. Contracting units should carefully consider including bid guarantees and performance bond requirements in their proposals.

When using the competitive contracting process what items should be included in the request for proposals?
The Request for Proposals (RFP) should clearly describe, at a minimum, the needs to be addressed, the desired vendor requirements (minimum years of experience, licensing, etc.), the desired outcomes when applicable, and the method of evaluating and ranking the proposals that are received from vendors. However, it is recommended that you do not disclose the weighting of the evaluation and ranking until the proposals are received and opened. In the RFP, the vendors are required to develop proposals for the goods or services that address those needs and achieve the desired outcomes, and to state the cost of the proposed contract. Each proposal is evaluated and ranked based on a stated criteria including price.

Are all bids required to be published 20 days prior to receipt or is just competitive contracting proposals?
Just competitive contracting proposals are required to be published 20 days prior to receipt. All others have a ten (10) day minimum.

Must a contracting unit encourage and support employee groups to participate in Competitive Contracting?
No, the contracting unit must inform the employee groups that competitive contracting is taking place by adopting a resolution authorizing a competitive contracting process.

When using competitive contracting how do you determine what vendor should be awarded the contract?
Under the competitive contracting process, the contract is awarded to the proposal that, when evaluated, most successfully meets the stated criteria and, therefore, achieves the highest ranking, rather than based solely on the lowest price. That results in an award given to the most advantageous proposal, price and other factors considered.

What are the evaluation criteria used in competitive contracting?
The evaluation criteria in competitive contracting are used to rank the contracts received. The evaluation criteria should include the following: technical, management, costs, assurance of performance and vendor’s financial stability and strength. However, the contracting unit may add other evaluation criteria as it applies to the contract. The rules to be adopted by the DLGS by the end of the year will include model criteria that can be used as a guide by contracting units.

Can evaluation criteria be weighted?
Evaluation criteria can be weighted based upon percentage assigned to each criteria by the contracting unit. For example, the contracting unit may weigh technical as 40 percent, management as 20 percent, cost as 20 percent, assurance of performance as 15 percent and vendor’s financial stability and strength as 5 percent. It is recommended that the weighting of the evaluation criteria not be released until the proposals are received but prior to being opened.

When is the evaluation report of competitive contracting considered a public record?
The evaluation report shall be made available to the public at least 48 hours prior to the award of contract or when the report is made available to the governing body, whichever is sooner.

When must the award of competitive contracting proposals be published?
Within ten (10) days after the award, the notice must be published in an official newspaper.

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Can an order for goods or services be "split" into two or more purchase orders or contracts so the total cost does not exceed the bid threshold?
No, the purchase of goods or services for related projects must be aggregated whenever practicable. No contract is to be divided for the purpose of avoiding the requirement to obtain formal bids. Rules are being developed to provide guidance in making aggregation decisions.

Is a purchase order considered a contract?
Yes.

If I receive two bids that offer equal pricing and are the lowest responsible bids, a tie bid, to whom do I award the contract?
The contract is awarded to the bidder offering the bid proposal the governing body finds to be the most advantageous, price and other factors considered.

There may be occasions when a contracting unit will solicit bids, proposals or quotes for goods and services that are unique in nature. How would a local contracting unit procure the goods or services in this case?
The law provides for and lists exceptions to the formal bid/proposal requirement. They include travel and conference expenses, professional services, extraordinary unspecifiable services (EUS), library and educational goods and services, etc. Please refer to the appropriate law for more details. If the contract is in excess of the bid threshold, it must be awarded by a resolution of the governing body at a public meeting, and detailed documentation of the circumstances and justification for the exception must be maintained. However, if the goods and services are not an exception, formal bid, quotes, state contracts or competitive contracting should be used in accordance with the law.

What are the provisions for purchasing through an existing state contract?
Goods and services can be purchased through a state contract without having to competitively bid. The law requires that the purchase be made based on the lowest price, and that documentation be maintained which states that the purchased good or service best meets the requirements of the local contracting unit.

Is there a limit on the number of purchases of reprographic equipment or services using the U.S. Government’s Federal Supply Schedules of the General Services Administration (FSS/GSA) contracts and pricing?
Yes, the FSS/GSA pricing can be used only for purchases up to $500,000 per year or any one-product unit per year at any price. However, the contracts cannot be used until rules are adopted by the State Division of Purchase and Property.

What is a "notice of award" and when is it required?
A notice of award is a brief notification placed once in an official newspaper indicating that a contract has been awarded. The law requires that this notice be placed whenever a contract for professional services or extraordinary unspecifiable services (EUS) that have not been formally bid, but are above the bid threshold, are awarded. The legislation requires that the notice include the nature, duration, service and amount of the contract. In addition, it requires that the notice state that the governing body’s resolution and the contract are on file and available for public inspection in the office of the local contracting unit. Click here for a sample notice.

Can a previous year’s contracts and related bid documents be released to the public?
Yes, once a public bid is opened, bid documents become public records. Once awarded, all contracts and related documents are automatically public records.

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Can a contracting unit join a neighboring County Government Cooperative Purchasing Program?
No, the contracting unit can only join the County Government Cooperative Purchasing Program with the county in which it is located.

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What is the penalty for contractors who falsely certify payroll vouchers?
It is considered a criminal offense if the certification was done knowingly and willingly. Each situation will be reviewed on a case-by-case basis.

If the contractor submits a claim that a contracting unit believes is false, should the matter be referred to the Attorney General or County Prosecutor’s Office?
Yes. Click here to contact the AG or Prosecutor’s Office.

N.J.S.A. 2C:27-6d(3) makes reference to a trivial benefit. What is it?
There is no law that defines trivial benefits. Initially, each suspected benefit must be examined. Each case would have to be reviewed individually by prosecutors. It is wise to use good judgment when referring to a trivial benefit.

What is the statute of limitation on false claims and representation or bid rigging?
The statute of limitation for both violations is five years. However, the action must have taken place after April 17, 2000. (the effective date of P.L. 1999, c.440).

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Does the law provide for emergency purchases above the bid/quote thresholds?
Yes. However, the provision for emergency purchases differs between the Local Public Contracts Law and The Public School Contracts Law. For PSCL agencies, an emergency affects the health and/or safety of occupants of school property, whereas, under the LPCL, an emergency can affect the health, safety and/or welfare of the public. The emergency for both schools and local governments must require the immediate delivery of goods or services in order to resolve the situation. It also requires the governing body to allocate funds for the purchases.

Would a purchase of goods and services to satisfy a court order be considered an emergency purchase?
It depends on how soon the corrective action must be implemented by the contracting unit. A longer period of time that permits quotations or bidding would suggest compliance with the respective Contracts Laws.

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What are "extraordinary unspecifiable services"?
Extraordinary unspecifiable services (EUS) 1) are specialized and qualitative in nature requiring expertise, extensive training and proven reputation in the field of endeavor; 2) cannot reasonably be described by written specifications; and 3) have an estimated contract value that exceeds the bid threshold.

How are contracts for extraordinary unspecifiable services (EUS) awarded?
Where practicable, the purchasing agent must solicit competitive quotations for all EUS. The award of a contract must be made by a resolution of the governing body at a public meeting and a brief notice of award of the contract must be published in an official newspaper. If the solicitation of competitive quotations was impracticable, the purchasing agent must make a statement to that effect and keep it on file with the purchasing documents.

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Where is the index rate available?
Click here for index rate information.

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When can you disqualify a bidder for prior negative experience, before or after bid submission?
A prior negative experience decision starts after the bid is received and applies to the lowest responsive bidder. At that point, a bidder can be rejected for prior negative experience. A hearing has to be held in which the contractor must prove why the contractor should not be rejected based on prior negative experience.

Can Prior Negative Experience be used on a contractor that is threatening litigation against a contracting unit?
No, prior negative experience can only be used after the completion of a contract and resolution of all claims.

Is the prior negative experience with the contracting unit or with the contracting unit’s official? For example, John Smith was the Business Administrator of Anytown and had a problem with No Problems Construction. Recently, as Business Administrator of Nowhere, Mr. Smith went out to bid on the reconstruction of the Department of Public Works building, and the lowest responsive bidder was No Problems Construction. Can Mr. Smith use his own prior negative experience of Anytown to reject the bid submitted to Nowhere?
No. The prior negative experience must be with the contracting unit, not with the contracting unit’s official. Therefore, Mr. Smith could not use his prior negative experience in Anytown to reject the bid.

Why is another contracting unit’s prior negative experience with a contractor not allowed?
The statute does not allow for another contracting unit’s prior negative experiences to be used. It is a matter of due process. For example, another contracting unit’s prior negative experience could have been caused by poor specifications or a personality conflict with the clerk of the works and the contractor. It may not have anything to do with the capability or performance of the contractor.

If we have a contract with a vendor to provide goods on a monthly basis and the vendor does not deliver the goods or is consistently late in the delivery of such goods, can Prior Negative Experience be used to reject future bids from the vendor?
Yes, prior negative experience can be used to reject future bids with the vendor. However, the contracting unit must properly document the non-delivery or problems with the delivery of the goods and services.

Prior negative experience can be based upon a third party determination that a bidder failed to complete a job or performed unsatisfactorily. Who is considered a third party?
Third party is an independent subjective reviewer such as the courts, an arbitrator, bond company or state agency.

Can you hear testimony from another contracting unit during the prior negative experience hearing?
No, the experience must be with your own contracting unit.

When a contractor is disqualified due to prior negative experience when does the disqualification begin?
The contractor’s disqualification period begins at the time of the formal disqualification action taken by the local contracting unit and can be up to five years.

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Have the rules for change orders been changed by the new law?
The rules adopted by the DOE and DLGS remain unchanged, except that the rules for local government units in N.J.A.C. 5:34 will be moved to a new section in N.J.A.C. 5:30 when the rules are adopted.

What is the expected date for adoption of the new rules?
The new regulations are currently under development and are planned to be in effect by the end of the year. The rules will be issued in several phases. Click here to read the proposals that have been issued to date.

To whom will the rules from the division be mailed?
Chief Administrative Officers, School Board Administrators, Municipal Clerks and Board Secretaries of all agencies covered under the laws will receive copies of the rules. The rules and regulations will also be available on the Internet. Click here to review them.

Professional associations may also plan to mail copies of the rules to their membership.

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What are "professional services"?
To qualify as a professional service, as defined in the law, the service to be procured must meet the following criteria:

• It must be rendered or performed by a person authorized by law to practice a recognized profession; and

• It must be rendered or performed by a person whose practice is regulated by law; and

• Performance of the service must require 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;

OR, alternatively the procurement must be rendered in the provision or performance of goods or services that are original and creative in character in a recognized field of artistic endeavor.

When is a resolution needed to award a Professional Service Contract?
A resolution is required when the amount to be awarded exceeds the bid threshold. A Notice of Award must also be published in the official newspaper within 10 days of the award.

How are professional service contracts awarded?
Professional Service contracts above the bid threshold are awarded by a resolution of the governing body at a public meeting, and a notice of the award of contract must be published in an official newspaper.

How are professional service contracts under the bid threshold awarded?
If the governing body has delegated to the purchasing agent the authority to award contracts under the bid threshold, the purchasing agent can award professional service contracts. In some cases, governing bodies may want to retain professional services contracts at all levels to themselves. This should be made clear in the act delegating the authority to the purchasing agent.

What is the maximum length of a professional service contract?
Professional service contracts can be awarded up to 12 months.

What is in a "Notice of Award"?
A notice of award is a summary of the awarded contract for professional services or extraordinary unspecificiable services. The notice includes the name of the person to whom the contract was awarded, the purpose, the cost and duration. The notice must be published in an official newspaper. Click here for examples.

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What are proprietary goods and services?
Proprietary goods and services are of a specialized nature, that may be made or marketed by a person(s) 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 as necessary for the conduct of its affairs.

When purchasing proprietary goods and services must there be compliance with the bid threshold levels?
Yes, since different vendors may be authorized to sell the proprietary goods and services.

Are fire trucks considered proprietary goods and services?
No, although fire trucks are of a specialized nature, they are not marketed by a person having the exclusive right to make or sell them. There are numerous manufacturers of fire trucks that offer similar features.

Are police Computerized Aided Dispatch or other specialized computer systems considered proprietary goods and services?
Yes, police Computerized Aided Dispatch systems generally are considered proprietary goods and services. However, like fire trucks, a specific brand or manufacturer is not. Thus, the systems are subjected to bidding or competitive contracting.

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After a meeting of the governing body in which several professional service award of contracts were made, can a single notice of professional service awards be published in the official newspaper?
Yes.

Under the law, schools are exempt from bidding requirements for class rings, yearbooks and gifts. If the fundraising efforts of the students do not cover the cost of the class rings, yearbooks or class gifts and school funds must be contributed to cover the costs, must the school board bid the balance of the project?
The method of procurement should be based upon the amount that the board of education will be contributing and the bid threshold rules. If the amount to be appropriated by the board of education exceeds the bid threshold the board of education must bid the item.

Is formal action of the board of education required for student-funded programs such as yearbooks, class rings and gifts?
Any contract above the bid threshold requires action by the board of education. The board of education must award these contracts by resolution.

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What is the prevailing wage level for the Public Works Contractor Registration Act?
For municipalities,the prevailing wage level is $10,743, and for non-municipalities, such as schools, counties, fire districts and authorities, the prevailing wage level is $2,000.

Does the Public Works Contractor Registration Act require that contractors on current public works project be registered?
Yes. Registration is required for projects that exceed the prevailing wage threshold. .

Do contractors currently working on a prevailing wage project or contractors awarded contracts prior to April 11, 2000, have to register with the Department of Labor under the Public Works Contractor Registration Act?
Yes.

What buildings are exempt from the Public Works Contractor Registration Act?
Pumping stations, treatment plants or other facilities associated with utility and environmental construction are excluded from the Public Works Contractor Registration Act.

Does the Public Works Contractor Registration Act require contractors who work on road projects to be registered?
Generally, roadwork, environmental and utility work are excluded from the act.

Do contractors for landscape maintenance or janitorial cleaning have to register under the Public Works Contractor Registration Act?
No. These services are not considered as "public works."

Do contractors performing maintenance and repair work to a public building have to register under the Public Works Contractor Registration Act?
Yes. Under the Public Works Contractor Registration Act any public building repair work is subject to the prevailing wage threshold.

Who is responsible for keeping the public works prevailing wage payroll submissions?
The certified payroll records must be made available for public inspection during normal business hours. It is recommend that the records be kept with the contracts, generally in the municipal clerk’s office or that of the chief financial officer.

What is the cost and length of the registration under the Public Works Contractor Registration Act?
The first registration is for one year at a cost of $300 a year, and the second year is also for $300. Upon successful completion of two consecutive years, a contractor may elect to register for a two-year period with a registration fee of $500.

How many contractors have to register with the Department of Labor under the Public Works Contractor Registration Act?
The Department of Labor projects that 7,500 to 8,000 contractors will register.

How does a contracting unit know if a vendor is on the state debarment list?
The state debarment list is available on the web or by contacting the State Division of Property Management and Construction at 609-292-5347.

What is the phone number for the Public Works Contractor Registration Act?
The phone number is 609-292-9464 or email at contreg@dol.state.nj.us

Where can I get additional information on the Public Works Contractor Registration Act?
The DLGS published a Local Finance Notice explaining the Public Works Contractor Registration Act Click here for a copy of the Local Finance Notice.

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What are the requirements for certification as a Qualified Purchasing Agent?
Regulations to be adopted by DLGS by the end of the year will establish the criteria for qualification as a Qualified Purchasing Agent (QPA). Once these rules are adopted, some contracting units may find that the current purchasing agent (for schools their board secretary, business administrator, business manager, or in the absence of these, an authorized designee) already meets the criteria and that person may simply have to apply to the DLGS for certification as a QPA.

What are the advantages of having a Qualified Purchasing Agent in my contracting unit?
The primary advantage, in addition to the government procurement education and experience that it provides, is that the contracting unit is then able to take advantage of the higher bid threshold of up to $25,000. This means that the contracting unit can contract for purchases of goods or services up to that higher limit without having to bid. The Qualified Purchasing Agent is one of the officials who can administer the competitive contracting process in accordance with N.J.S.A. 40A:11-4.3(b) and N.J.S.A. 18A:18A-4.3b.

Is use of the higher bid threshold automatic for contracting units that have Qualified Purchasing Agents?
No. The contracting unit’s governing body must establish the authority for the contracting unit to use the higher threshold through a resolution. The governing body may establish this authorization for individual contracts, or by a general delegation of this authority to the Qualified Purchasing Agent. Again, the governing body also retains the option of setting the bid threshold at a lower amount through a resolution.

If the contracting unit does not have a Qualified Purchasing Agent, can it still contract for goods and services?
Yes. However, the contracting unit will be required to adhere to the bid threshold of $17,500, unless the governing body has established a lower threshold by a resolution. Under the LPCL the governing body may appoint anyone as a purchasing agent. Under the PSCL the statute defines the purchasing agent as the school business administrator, secretary or business manager.

Can contracting units share the Qualified Purchasing Agent with another contracting unit to take advantage of the higher bid threshold?
Yes, however, to have the higher bid threshold, the Qualified Purchasing Agent must have the authority, responsibility and accountability in each contracting unit.

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What are the reasons that a local contracting unit can reject all bids?
A local contracting unit can reject all bids for any of the following reasons:

• Lowest bid substantially exceeds cost estimates;
• Lowest bid substantially exceeds appropriation;
• Governing body abandons the project;
• Contracting unit wants to substantially revise the bid specifications;
• Purpose and/or provisions of the LPCL and PSCL are violated; or
• Governing body opts to use the state contract

Among the criteria to reject all bids are that (1) the bid exceeds the project estimate, or (2) the bid exceeds the appropriation. Doesn’t the project estimate have to equal the appropriation?
No, the project estimate is independent of the appropriation. The appropriation is part of the budget process, whereas the project estimate is part of the project design. It is possible that the project is part of a multipurpose bond. Therefore, the estimate and appropriation would not always match. It is also possible that the appropriation is made six months prior to bidding for the project. During that time period, the cost of material or labor could have risen and additional funds might be made available.

Can you reject all bids if the number of bids received is less than expected?
It depends on the circumstances (see previous questions in this section). The purpose of the contracts laws is to prompt an interest in competition. The receipt of fewer bids than anticipated may prompt the local contracting unit to revise its bid specifications. In all cases, a careful analysis of the number and quality of the bids should be reviewed by the local unit’s legal advisors.

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Are the sale of personal property requirements applicable to the cost of individual items or the aggregate amount of items to be sold at the same time?
The amount is in the aggregate.

Who authorizes disposal of personal property less than 15 percent of the bid threshold?
The governing body must pass a resolution to authorize any sale of its personal property not needed for public use. The difference is that under 15 percent of the bid threshold a private sale is authorized. A private sale must be conducted using sound business practice.

Can I use the Internet to sell personal property?
Yes, but only for those items under the 15 percent threshold – it is considered a "sound business practice."

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Can you factor in a trade-in when determining the bid threshold for particular goods or services?
No, a determination of the bid threshold is based on the estimated cost of the goods or the services without the trade in.

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Who can I contact for further clarification on specific procurement issues?
For agencies under the Public School Contracts Law (PSCL): Generally the Department of Education (DOE) is responsible for guidance and oversight of the local school districts. However, the law establishes the Division of Local Government Services (DLGS) as the agency responsible for implementing the new procurement legislation, and establishes the DOE as a consulting agency for promulgating the new regulations. If you are uncertain regarding the requirements of a specific procurement for your district, you should first refer to the PSCL, and the new rules at N.J.A.C. 5:34-1 et seq., (once they have been adopted.) Until the new rules are adopted, existing rules at N.J.A.C. 6:20 et seq. apply. For clarification on legal interpretation of the legislation, current statutes, and related matters of law you should consult with your local school board attorney. If additional information is required, you may e-mail your questions to lpcl@dca.state.nj.us, or you may call DLGS at (609) 292-7842 or (609) 984-7765.

For agencies under the Local Public Contracts Law (LPCL): after reviewing the LPCL and rules at N.J.A.C 5:34-1 et seq., and other resources on this web site, contact the DLGS Bureau of Local Management Services via e-mail at lpcl@dca.state.nj.us or call DLGS at (609) 292-7842 or (609) 984-7765. For clarification on legal interpretation of the legislation, current statutes, and related matters of law, the local unit attorney should be consulted.

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