ASSEMBLY, No. 2108

STATE OF NEW JERSEY

208th LEGISLATURE

INTRODUCED JUNE 1, 1998

Sponsored by:

Assemblyman GERALD J. LUONGO

District 4 (Camden and Gloucester)

Assemblyman JOHN V. KELLY

District 36 (Bergen, Essex and Passaic)

SYNOPSIS

Requires submission of certain items with bid on local public contract.

CURRENT VERSION OF TEXT

As introduced.

An Act concerning bids submitted for local public contracts, and supplementing and amending P.L.1971, c.198.

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

1. (New Section) All plans, specifications and bid proposal documents for the erection, alteration, or repair of a building, structure, facility or other improvement to real property, the total price of which exceeds the amount set forth in, or the amount calculated by the Governor pursuant to, section 3 of P.L.1971, c.198 (C.40A:11-3), shall include:

a. a document for the bidder to acknowledge the bidder's receipt of any notice or revisions or addenda to the advertisement or bid documents; and

b. a form listing those documentary and informational forms, certifications, and other documents that the contracting agent requires each bidder to submit with the bid. The form shall list each of the items to be submitted with the bid proposal and a place for the bidder to indicate, by initialing each entry, that the bidder has included those required items with the completed bid proposal. Each bidder shall complete this form and submit it with the bid proposal in addition to those documentary and informational forms, certifications, and other documents that are listed on the form.

2. (New Section) When required by the bid plans and specifications, the following requirements shall be considered mandatory items to be submitted at the time specified by the contracting unit for the receipt of the bids; the failure to submit any one of the mandatory items shall be deemed a fatal defect that shall render the bid proposal unresponsive and that cannot be cured by the governing body:

a. A guarantee to accompany the bid pursuant to Section 21 of P.L.1971, c.198 (C.40A:11-21);

b. A certificate from a surety company pursuant to Section 22 of P.L.1971, c.198 (C.40A:11-22);

c. A statement of corporate ownership pursuant to Section 1 of P.L.1977, c.33 (C.52:25-24.2);

d. A listing of subcontractors pursuant to Section 16 of P.L.1971, c.198 (C.40A:11-16); and

e. A document provided by the contracting agent in the bid plans, specifications, or bid proposal documents for the bidder to acknowledge the bidder's receipt of any notice or revisions or addenda to the advertisement or bid documents.

3. Section 21 of P.L.1971, c.198 (C.40A:11-21) is amended to read as follows:

21. [There may be required from any] A person bidding on a contract or agreement for the erection, alteration or repair of a public building, structure, facility or other improvement to real property, the total price of which exceeds $100,000, shall furnish a guarantee as provided for herein. A contracting unit may provide that a person bidding on any other contract or agreement, advertised in accordance with law, [that the bid be accompanied by a] shall furnish a guarantee as provided for herein. The guarantee shall be payable to the contracting unit so that if the contract or agreement is awarded to [him he] the bidder, the bidder will enter into a contract therefor and will furnish any performance bond or other security required as a guarantee or indemnification. The guarantee shall be in the amount of 10% of the bid, but not in excess of $20,000.00, except as otherwise provided herein, and may be given, at the option of the bidder, by certified check, cashier's check, letter of credit from a licensed financial institution or bid bond. In the event that any law or regulation of the United States imposes any condition upon the awarding of a monetary grant to any contracting unit, which condition requires the depositing of a guarantee in an amount other than 10% of the bid or in excess of $20,000.00 the provisions of this section shall not apply and the requirements of the law or regulation of the United States shall govern.

(cf: P.L.1974, c.189, s.1)

4. Section 22 of P.L.1971, c. 198, (C.40A:11-22) is amended to read as follows:

22. a. A person bidding on a contract or agreement for the erection, alteration or repair of a building, structure, facility or other improvement to real property, the total price of which exceeds $100,000, shall furnish a certificate from a surety company, as provided for herein. A contracting unit may provide that a person bidding on any other contract or agreement shall furnish a certificate from a surety company, as provided for herein.

b. When a surety company bond is required in the advertisement or specifications for a contract or agreement, every contracting unit shall require from any bidder submitting a bid in accordance with plans, specifications and advertisements, as provided for by law, a certificate from a surety company stating that it will provide the contractor with a bond in such sum as is required in the advertisement or in the specifications.

This certificate shall be obtained for a bond--

(1) For the faithful performance of all provisions of the specifications or for all matters which may be contained in the notice to bidders, relating to the performance of the contract or agreement, and

(2) If any be required, for a guarantee bond for the faithful performance of the contract provisions relating to the repair and maintenance of any work, project or facility and its appurtenances and keeping the same in good and serviceable condition during the term of the bond as provided for in the notice to bidders or in the specifications, or

(3) In such other form as may be provided in the notice to bidders or in the specifications.

If a bidder desires to offer the bond of an individual instead of that of a surety company, [he] the bidder shall submit with [his] the bid a certificate signed by such individual similar to that required of a surety company.

The contracting unit may reject any such bid if it is not satisfied with the sufficiency of the individual surety offered.

(cf: P.L.1971, c.198, s.22)

5. This act shall take effect on the first day of the fourth month after enactment.

STATEMENT

This bill would require plans, specifications and bid proposal documents for the erection, alteration, or repair of a building, structure, facility or other improvement to real property, the total price of which exceeds the amount set forth in, or the amount calculated by the Governor pursuant to, section 3 of P.L.1971, c.198 (C.40A:11-3), to include a form listing all the forms, certifications, and other documents that the contracting agent requires each bidder to submit with the bid. The form would list each of the items to be submitted with the bid proposal and a place for the bidder to indicate, by initialing each entry, that the bidder has included those required items with the completed bid proposal. Bidders would be required to complete the form and submit it with the bid proposal together with the forms, certifications, and other documents that are listed on the form.

The bill also sets forth a list of items that must be submitted to the contracting unit by the bidder at the time specified for the receipt of bids, failure to submit any one of which would be deemed a fatal defect rendering the bid proposal unresponsive. With regard to contracts for the erection, alteration, or repair of a building, structure, facility or other improvement to real property, the total price of which exceeds $100,000, it would be mandatory for a bidder to submit: a guarantee, as provided for in Section 21 of P.L.1971, c.198 (C.40A:11-21), and a certificate from a surety company, as provided for in Section 22 of P.L.1971, c.198 (C.40A:11-22). The bill also adds another form of guarantee payment, a letter of credit from a licensed financial institution, to the current list of acceptable forms of guarantee payment. With regard to all other contracts, it would remain within the discretion of the contracting unit to determine whether to require a guarantee or a certificate from a surety company. The bill also would require bidders for contracts for the erection, alteration, or repair of a building, structure, facility or other improvement to real property, the total price of which exceeds the amount set forth in, or the amount calculated by the Governor pursuant to Section 3 of P.L.1971, c.198 (C.40A:11-3) to submit a document provided by the contracting agent in the bid plans, specifications, or bid proposal documents for the bidder to acknowledge the bidder's receipt of any notice or revisions or addenda to the advertisement or bid documents. Failure to submit this document would be a fatal defect.

Current law requires bidders to submit a statement of corporate ownership, section 24.2 of P.L.1977, c.33 (C.52:25-24.2) and a listing of subcontractors, section 16 of P.L.1971, c.198 (C.40A:11-16). The bill would render failure to submit either of these items at the time specified for the submission of bids to be a fatal, incurable defect.