local public contracts law and the public school contracts la · 2019. 4. 1. · this provision...

Local Public Contracts Law and the

Public School Contracts Law

Comparison of Statutory Provisions:

N.J.S.A. 40A:11-1 et seq. and

N.J.S.A. 18A:18A-1 et seq.

Prepared By:

Joseph A. Valenti

March, 2019

JAV 1

Title: 18A:18A-1 40A:11-1

Definitions:

18A:18A-2

30 definitions, but 4 deleted by amendments- "Board of Education," and "District" are included in this provision.

The term "Work" (18A:18A-2k) is different than the LPCL term "Work" [40A:11-2(9)].

The term "Aggregate" (18A:18A-2l), and the same LPCL [40A:11-2(19)] definition of the term are incorrect- "during the same contract year..."

The term "Concession" (18A:18A-2aa) states that term "vending machines" are excluded from the definition.

40A:11-2

The LPCL has 42 definitions in this provision of law. Two definitions were deleted by amendments.

The provision has a definition for a "Contracting agent" [40A:11-2(3)], and a "Purchasing agent" [40A:11-2(30)]. The PSCL has a definition for a "Purchasing agent" (18A:18A-2b), but not a "Contracting agent."

The LPCL has additional definitions for recyclable terms (3), municipal solid waste, homemaker-- home health services, cooperative marketing, administrator, qualified purchasing agent certificate, and mistake [40A:11-2(42)].

JAV 2

18A:18A-49.4: Certification on bid or proposal as to investment 40A:11-2.1 activities in Iran; false certifications

This provision concerns sanctions against the government of Iran (Comprehensive Iran Sanctions, Accountability, and Divestment Act of 2010). The PSCL provision is consistent with the LPCL provision.

40A:11-3: Awards by a PA or QPA and Adjustment of Bid 18A:18A-3 Threshold

18A:18A-3a and 40A:11-3a are both similar.

18A:18A-3b and 40A:11-3c are both similar.

18A:18A-3 (last paragraph) and 40A:11-3b are similar, but the LPCL required the DLGS to adopt rules concerning methods of accounting.

18A:18A-3.1: Private driver education schools are not applicable to the LPCL.

18A:18A-3.2: Contracts for group legal insurance are not applicable to the LPCL.

18A:18A-3.3: Payment of premiums or charges is not applicable to the LPCL.

18A:18A-3.4: Coverage after retirement is not applicable to the LPCL.

18A:18A-4: Award of contract by resolution and prior 40A:11-4 negative experience

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The PSCL has a reference (18A:18A-4a) regarding prior negative experience with a bidder within the past 10 years, and reporting the same to certain state agencies. The LPCL has prior negative experience, but no time frame or reporting to any state agencies.

The PSCL, at 18A:18A-4b(1)(2)(3) and (4), requires the reporting of unsatisfactory work on a NJEDA school facilities project and reporting the same to the NJEDA. This is not applicable to the LPCL.

18A:18A-4.1: Competitive contracting purposes 40A:11-4.1

Competitive contracting uses are different between both laws. Local contracting units have services normally found under the operations of a municipal or county government including but not limited to:

Wastewater treatment system; Water supply; Operation and management of a county hospital; and Emergency medical services.

It is interesting to note some uses the LPCL has that school districts use but do not have in the PSCL, such as:

Maintenance, custodial, and grounds keeping services; Consulting services; and Grant writing services.

School districts must seek permission from the DLGS in order to use the CC method for the above named services.

18A:18A-4.2: 40A:11-4.2

Duration of contracts not to exceed a term of five years is the same for both provisions of law.

JAV 4

18A:18A-4.3: 40A:11-4.3

The competitive contracting process, the passage of a resolution, and the administration of the process are the same for the PSCL and the LPCL.

18A:18A-4.4: 40A:11-4.4

These two provisions of law are different. 40A:11-4.4 was amended in September 2014 (P.L. 2014, c.52), whereby no financial statement shall be required of vendors if either a guarantee, by certified check, cashier's check, or bid bond, or a surety company certificate is also required to be furnished by the bidder, unless any law or regulation of the United States imposes a condition upon the awarding of a monetary grant to be used for the purchase, contract, or agreement, which condition requires that a financial statement be submitted... The PSCL does not have a similar provision of law regarding the use of a financial statement.

18A:18A-4.5: 40A:11-4.5

The solicitation of competitive contracting proposals are the same for both laws.

40A:11-4.5h:

The provision requires the certification of the availability of funds. This is not a requirement for BOEs, and, therefore, not a statutory or regulatory requirement of the PSCL.

JAV 5

18A:18A-5: Exceptions, No bids, high bids, negotiation of 40A:11-5 certain contracts, bids not received independently, 10% less than State contract provisions

The PSCL has 20 exceptions to the receipt of bids. Some exceptions pursuant to the PSCL are different from the LPCL. These are:

Food supplies [18A:18A-5a(6)]; Goods/services paid with funds raised by or collected from

students to support the purchase of student-oriented items or materials [18A:18A-5a(21)];

Food services provided by food service management companies, Department of Agriculture, Bureau of Child Nutrition Programs [18A:18A-5a(22)]; and

Vending machines providing food and drink [18A:18A-5a(23)].

The LPCL has 34 exceptions to the receipt of bids. Sixteen out of the twenty PSCL exceptions are the same as those found under the LPCL exceptions.

However, because of Pay-to-Play requirements (fair and open v. the alternate procedure), the LPCL statutorily has no exceptions to the receipt of bids over the $17,500 threshold.

The remaining sections of both laws are consistent in application and intent.

18A:18A-6: Standards for purchase of fresh milk

The LPCL does not have any provision. The provision is not applicable to the LPCL.

JAV 6

18A:18A-7: Emergency contracts 40A:11-6

18A:18A-7 (first paragraph) has a phrase "...or safety of occupants on school property, while 40A:11-7 (first paragraph) has the term "welfare," but the word is not defined.

18A:18A-8: Contracts not to be divided 40A:11-7

Both provisions of the PSCL and the LPCL are the exact same language.

18A:18A-8.1: Rules concerning determination of aggregation 40A:11-7.1

Provisions of both laws are consistent.

18A:18A-9: Periodic solicitation of bids 40A:11-8

The PSCL provision has the solicitation of bids on an annual basis or at lesser intervals to be fixed by a BOE. The LPCL provision only has a reference to intervals to be fixed by the governing body.

40A:11-9.1: List of sources for green product purchasing

The PSCL does not have a similar provision of law.

JAV 7

18A:18A-10: Purchases through state agency; use of federal 40A:11-12 supply schedules of the general services administration

The provisions of both laws are consistent with each other.

18A:18A-11 & Joint purchases by districts, municipalities, 18A:18A-12: counties 40A:11-10

Provisions in the PSCL and the LPCL are consistent.

18A:18A-13: Purchases and agreements subject to law and rules and regulations

This provision of law only applies to school districts.

18A:18A-14: Controversies or disputes; determination; appeal


18A:18A-14.1 & 18A:18A-14.2: Electronic data processing 18A:18A-14.3 & 18A:18A-14.4 defined

These four provisions of law are unique only to the PSCL.

18A:18A-15: Specifications generally 40A:11-13

The LPCL at 40A:11-13(b) states that no specification for a contract for the collection and disposal of municipal solid waste can require any bidder to be a resident of, or the bidder's place of business be located in

JAV 8

the county or municipality in which the contract will be performed. The PSCL does not address the subject matter.

The PSCL requires every contract for public work, exceeding a total cost of $20,000 to report to the department (which one?) as to the contractor's performance as well as when a contractor is in default. The LPCL does not have a similar requirement.

No provision in this PSCL section can prevent a BOE from awarding a contract for goods or services to a small business enterprise, a minority business enterprise, or a women's business enterprise pursuant to 18A:18A-51 et seq. This section is not covered in 40A:11-13.

The requirement of 2A:44-128 concerning the delivery of labor or materials must be included in the specifications pursuant to 40A:11-13.

The LPCL's 40A:11-13(f) was signed into law in September 2014 (P.L. 2014, c.52). It is concerned with the following:

... no financial statement shall be required of vendors if either a guarantee, by certified check, cashier's check, or bid bond, or a surety company certificate is also required to be furnished by the bidder, unless any law or regulation of the United States imposes a condition upon the awarding of a monetary grant to be used for the purchase, contract, or agreement, which condition requires that a financial statement be submitted... The PSCL does not have a similar provision of law regarding the use of a financial statement.

40A:11-13(g) includes a pay item for asphalt price adjustments as well as a fuel price adjustment. The PSCL does not address either of these price adjustments.

JAV 9

18A:18A-15.1: Payment from bequest, legacy or gift; conditions 40A:11-13.1

The LPCL requires that the bequest, legacy, or gift is used in a manner consistent with N.J.S.A. 40A:5-29. The PSCL does not have a similar provision.

18A:18A-16: Preparation and approval of plans and specifications for public schoolhouses

The LPCL does not have a similar provision of law.

18A:18A-16.1: Regulations; construction standards for school buildings


18A:18A-17: Facilities for persons with physical disabilities

The LPCL does not have a similar provision.

18A:18A-17.1: Commissioner of Education authorized to withhold State aid


18A:18A-18: Separate plans for various types of work; bid; 40A:11-16 contracts

18A:18A-18c requires payments to a subcontractor for work and materials supplied in connection with the contract to be made within 10 calendar days of receipt of payment. The LPCL does not have a similar provision of law.

JAV 10

18A:18A-19: Number of working days specified 40A:11-17

Both the PSCL and the LPCL have the exact language.

18A:18A-20: American good and products to be used where 40A:11-18 possible

Both the PSCL and the LPCL have the exact language.

18A:18A-21: Advertisements for bids; bids; general 40A:11-23 requirement

Both the PSCL and the LPCL have similar provisions.

18A:18A-22: Rejection of bids 40A:11-13.2

Both the PSCL and the LPCL have the same statutory language.

18A:18A-23: Certificate of bidder showing ability to perform 40A:11-20 contract

The PSCL and the LPCL have the same statutory language.

18A:18A-24: Security to accompany bid; amount 40A:11-21

The LPCL requires a guarantee when the total price of the contract will exceed $100,000. The PSCL does not have a similar requirement.

The LPCL provision appears to only apply to the erection, alteration, or repair of a public building, structure, facility, or other improvements to

JAV 11

real property. The PSCL states that a security may be required from any person bidding on any contract.

18A:18A-25: Guarantee certificate 40A:11-22

The LPCL has a minimum construction/public works contract dollar amount ($100,000) where bidders are required to submit a certificate from a surety company (consent of surety and then at award a performance bond.) BOE do not have any dollar amounts.

Basically, all other provisions in both laws are consistent.

40A:11-23.1: Plans, specifications, bid proposal documents; required contents

The PSCL does not include some required bid proposal documents. The PSCL does not include traffic safety control issues for construction/public work projects. The PSCL does not include (as an option) specified alternate proposals in addition to a base bid specification.

40A:11-23.1e & 40A:11-23.1a: Approval of change order under certain circumstances

The PSCL does not have provisions of law to discuss what to do with known soil conditions and the removal of the soil from a site; as well as sites with no historical or suspected soil contamination and how to remove the soil.

40A:11-23.2: Required items for bid plans, specifications

It is noted with much interest that the LPCL has a required list of items to be submitted with the bid. They are as follows:

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A guarantee to accompany the bid. A certificate from a surety company A statement of ownership A listing of subcontractors 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.

The PSCL has no such list mentioned in law.

40A:11-23.3: Withdrawal of public works bid

The PSCL does not have such a law.

40A:11-23.4 "Bulletin NJ"

The PSCL does not have such a law.

18A:18A-26: Classification of bidders as requisite to bidding


18A:18A-27 & 27.1: Authority of State Treasurer to adopt 40A:11-25- 40A:11-34 regulations providing for qualifications of bidders

The PSCL provision is more detailed than the LPCL provisions (40A:11-25- 40A:11-34).

18A:18A-27.1 requires construction management services to be prequalified by the Division of Property Management and Construction in the Department of the Treasury. The LPCL does not have a similar statutory requirement.

JAV 13

18A:18A-28: Application for classification; fee


18A:18A-29: Classification by classes; notice to applicants


18A:18A-30: Appeal from determination as to classification; hearings; change


18A:18A-31: Change in classification as affecting bids; review and reconsideration of classification


18A:18A-32: Bidders not submitting statements within one year ineligible to bid; affidavit of no change in status to accompany bid; reports as to performance, etc.


18A:18A-33: Penalties for false statements


18A:18A-34: Blank

18A:18A-35: Blank

JAV 14

18A:18A-36: Time for making awards, deposits returned 40A:11-24

18A:18A-36 states that within three days after the awarding of the contract and the approval of the contractor's performance bond...(18A:18A-36a, last sentence). The LPCL at 40A:11-24a (last sentence) states ...after the awarding and signing of the contract and approval... The two provisions of law are not consistent.

18A:18A-36b and 40A:11-24b are consistent.

18A:18A-37: Award of purchases, contracts, or agreements 40A:11-6.1

Both provisions of the PSCL and the LPCL are consistent.

18A:18A-38 & 39: Repealed by P.L. 1999, c.440, effective 4/17/00

18A:18A-40: Form and execution of contracts and bonds 40A:11-14

Both provisions of law are consistent. However, the PSCL provision states that the State BOE may prescribe the forms and how contracts shall be executed. The LPCL provision gives that responsibility to the governing body.

18A:18A-40.1: Contracts in excess of $100,000; partial 40A:11-16.2 payments or deposit bonds as work progresses

The provisions of the PSCL and the LPCL are consistent.

JAV 15

18A:18A-40.2: Withholding of payments or deposit of bonds; 40A:11-16.1 interest


18A:18A-40.3: Withholding of percentage of amount due 40A:11-16.3 pending completion

Five percent (5%) is withheld on each partial payment if the contractor does not have a performance bond. If the contractor has a performance bond, 2% is withheld when the outstanding balance of the contract exceeds $500,000, and 5% is withheld when the outstanding balance of the contract is $500,000 or less. The LPCL provision is not similar to the PSCL provision and it withholds 2% of the outstanding balance.

The LPCL provision provides for a maintenance bond no longer than two years and not more than 100% of the project costs. The PSCL provision does not include such language.

40A:11-16.4: Partial payments for materials

The PSCL does not have a similar provision of law.

40A:11-16.5: Renegotiation of contract to reflect increase in solid waste disposal costs

The PSCL does not have this provision of law.

40A:11-16.6 Definitions relative to value engineering change orders; requirement for certain contracts


JAV 16

40A:11-16.7: Establishing standardized changed conditions clauses

Changed conditions clauses for certain local public contracts are as follows:

Differing site conditions provisions Suspension of work provisions Change in character of work provisions Change in quantity provisions


40A:11-40: Authorization to purchase specific materials at auction; procedure

The PSCL does not address this subject matter.

18A:18A-41: Liquidated damages 40A:11-19

The PSCL and the LPCL provisions are similar.

18A:18A-42: Duration of certain contracts40A:11-15

The PSCL has 15(a-o) contracts that exceed the 24 consecutive months limitation. Fourteen out of the 15 (excluding driver education instruction) are for the exact term of contract as those in the LPCL. The LPCL has 42 contracts that exceed the 24 consecutive months limitation.

The last two paragraphs in 18A:18A-42 and 40A:11-15 are similar in nature even though both contracting entities are responsible for different types of contracts.

JAV 17

18A:18A-45: Manner and method of sale 40A:11-36


18A:18A-47: Indemnity agreement with the United States, 40A:11-35 etc.


18A:18A-49.2: Rules 40A:11-37.1


40A:11-50: Process of resolution for construction contract disputes

The PSCL does not address alternative dispute resolution practices.

40A:11-51: Limitations on awarding public contracts to entities that made political contributions; authority of local units, non-preemption by State law

The LPCL provision includes boards of education.

18A:18A-51: Definitions 40A:11-41

For the most part, both the PSCL and the LPCL have similar definitions. The definition of "Veteran" and "Qualified veteran business enterprise" are not in 18A:18A-51.

JAV 18

18A:18A-52: Set-aside programs authorized 40A:11-42

The provisions of the PSCL and the LPCL are basically the same. However, the word "qualified" is not included in the PSCL provision to describe the three different types of business enterprises. Also, "Qualified veteran business enterprise" is not included in the PSCL provision.

18A:18A-53: Goals; attainment 40A:11-43

The provisions, 18A:18A-53a and 40A:11-43a are consistent. The PSCL provision does not address the veteran business enterprise.

40A:11-43b goes into a little more detail than 18A:18A-53b on how to evaluate whether goals are being reached.

18A:18A-54: Application of the PSCL and the LPCL 40A:11-44

Both provisions of law are consistent.

18A:18A-55: Designation of contracts; advertisement for 40A:11-45 bids

Both provisions of the PSCL and the LPCL are consistent. The PSCL provision does not address the term "veteran business enterprise."

JAV 19

18A:18A-56: Withdrawal of designation; rejection of bids; 40A:11-46 notice of cancellation

Both provisions of the PSCL and the LPCL are consistent. The PSCL provision does not address the term "veteran business enterprise."

18A:18A-57: Annual report, publication of attainments 40A:11-48

Both provisions of the PSCL and the LPCL are consistent. The PSCL does not address the term "veteran business enterprise."

18A:18A-58: Rules and regulations 40A:11-49

Both provisions of the PSCL and the LPCL are consistent.

18A:18A-59: Classification as a small, minority or women's 40A:11-47 business enterprise on basis of false information; penalties; hearing

Both provisions of the PSCL and the LPCL are consistent. The PSCL

does not address the term "veteran business enterprise."

JAV 20

The statutory citations listed below are only found in the PSCL:

18A:18A-42.1 Repealed by P.L. 1999, c.440

18A:18A-42.2 School district contracts; submission of report to board of education

18A:18A-43 Supervision of school building repairs

18A:18A-44 Inspection, condemnation and rejection of work and materials

18A:18A-46 No action for damages for action by officials

18A:18A-46.1 Limitations on withholding of State funds for certain violations

18A:18A-48 Contracts and other agreements; validated and confirmed

18A:18A-49 Approval of final plans and specifications required

18A:18A-49.1 Transportation of pupils to and from schools

18A:18A-49.3 Board of education; contracting with school photographers

18A:18A-50 Statutes repealed

New Bills Signed Into Law

August, 2018 - March, 2019

The following bills were signed into law and either directly amend the LPCL/PSCL or

affect both of these laws.

1. Public-Private Partnership ( P3) S-865(3R), (P.L. 2018, c.90, 8/14/18) N.J.S.A. 40A:11-52 & N.J.S.A. 18A:18A-60

2. Prompt Payment - Goods and Services A-3808(2R), (P.L. 2018, c.127, 10/4/18) N.J.S.A. 40A:11-19.1 & N.J.S.A. 18A:18A-10.1

PSCL has 90 days while LPCL has 60 days. Local contracting units are permitted to accept a Claimant Certification for payment; school districts are not.

3. Local Unit Electronic Act - (Effective October, 2019) A-3112, (P.L. 2018, c.156, 12/17/18) N.J.S.A. 40A:11-4.9 (definition of a "Local unit" includes the LPCL and PSCL)

4. Jake's Law - inclusive playgrounds A-2187(1R), (P.L. 2018, c.104, 8/23/18) N.J.S.A. 52:27D-123.9 et seq.

5. Registered Apprenticeship Program - (Effective 4/27/19) A-3666(1R), (P.L. 2019, c.21, 1/31/19) N.J.S.A. 34:11-56.50 and 56.52.

Law applies to the N.J. Prevailing Wage Act, and the "word" is that a contractor will not receive a P.W.C.R. certificate unless he/she provides proof of having a registered apprenticeship program approved by the U.S. Department of Labor.

Cooperative Joint Efforts Between

Boards of Education and Municipalities and Counties

N.J.S.A. 18A:20-22: School districts joining with municipality or county in equipment and operation

The board of education of any district may join with the governing body of any municipality, or the board of chosen freeholders of the county in which the district is located, in acquiring, improving, equipping, operating and maintaining playgrounds, playfields, gymnasiums, public baths, swimming pools, and indoor recreation centers, and may appropriate money therefore and may pay over to the said body or board such money as may be so appropriated to be disbursed for any of such joint purpose.

N.J.S.A. 40:12-9: Joint action by municipalities or by municipality and school district or county

Any two or more municipalities in any county or any municipality and the coterminous school district or any municipality and county may jointly acquire property for and improve, operate and maintain any playgrounds, playfields, gymnasiums, public baths, swimming pools or indoor recreation centers, and may appropriate money therefore. The municipality may pay over to the board of education of the school district such money as may be so appropriated to be disbursed by the said board of education for any of such joint purposes.

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Local Finance Notice LFN 2012-10

Issued--May 14, 2012

Using National Cooperative Contracts

Guidance to Contracting Units Review

Prepared by James Shoop, March 2019

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Aggregate Value Exceeds Bid Threshold

In context of the Local Public Contracts Law (LPCL) and the Public School Contracts Law (PSCL), the provisions of this notice apply when the aggregate value of the goods or services (see N.J.A.C. 5:34-8.2) exceeds the contracting unit’s bid threshold. (Page 2-LFN 2012-10)

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Public Bidding is Not Required

General interpretation: The use of the term “notwithstanding any other law to the contrary” in this statute means that public bidding is not required when using a national cooperative contract. However, national cooperative contracts are still subject to procurement laws and rules that apply to all other contracts awarded by a New Jersey contracting unit. (Page 3—LFN 2012-10—Letter D1)

Little more on this later!

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Legal Requirements to Use a National Cooperative Contract

Documentation Requirements

The contracting unit must verify that vendors on a national cooperative contract comply with applicable New Jersey procurement documentation requirements.

For example, vendors will need to comply with the following New Jersey laws by submitting the required forms to the New Jersey contracting unit as if the contract was originally awarded by that contracting unit:

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New Jersey Business Registration Certificate (BRC) for the contractor and any sub-contractors (i.e., copy of certificate)

Statement of Corporate Ownership (an original form prepared for the contracting agency awarding the contract)

Affirmative Action Evidence--Public Contract EEO Compliance—(Employee Information Report form or proof of participation in a federally approved affirmative action program)

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Non-collusion Affidavit (only if required by a local unit) (Page 4—LFN 2012-10—Letter E)

Chapter 271 Political Contribution Disclosure Form (Page 6-7—LFN 2012-10)

Other document not mentioned in LFN 2012-10:

Iran; Disclosure of Investment Activities Form

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Legal Requirements to Use a National Cooperative Contract

Cost-Savings Determination

The law (N.J.S.A. 52:34-6.2) requires that a contracting unit can use national cooperatives only when the contracting unit determines “that the use of the cooperative purchasing agreement shall result in cost savings after all factors, including charges for service, material, and delivery, have been considered.”

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Cost-Savings Determination Suggested methods of demonstrating cost-savings include:

Comparing current State Contract pricing, available to other government entities, to that of the proposed national cooperative.

Comparing pricing for comparable goods or services under the contracting unit’s current contracts or contracts available to it (i.e., New Jersey government based cooperative purchasing programs) to that of the proposed national cooperative.

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Comparing recently procured comparable contracts entered by other public entities to that of the proposed national cooperative. (Page 6—LFN 2012-10)

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Cost-Savings Determination--Documentation Required

The (cost-savings) documentation, which would be reviewed as part of an audit, and which is subject to disclosure under the Open Public Records Act, should be kept on file as part of the award package.

Whatever factors the contracting unit uses in determining the cost effectiveness of a national contract, the court cases referred in Subsection 4 strongly suggest that documentation of the cost saving determination is a necessary and vital prerequisite to a contracting unit’s award of a national cooperative contract.

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Legal Advertisement Requirements Public Notice of Intent

The New Jersey Division of Purchase and Property (“DPP”) strongly suggests that a contracting unit must provide public notice to current contract holders and prospective bidders of their decision to utilize a national cooperative purchasing agreement that would otherwise require public bidding.

The advised notice practices include the contracting unit providing notice of its intent to utilize a national cooperative contract with a sufficient time period for a vendor to offer alternative approaches.

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Public Notice of Intent

This notice should be treated like any other procurement legal notice and must be printed in an official newspaper (similar to advertisements to receive bids) with at least (ten) 10 days’ notice before the next action is taken. (Page 7—LFN 2012-10)

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Public Notice Template “Notice of Intent to Award a Contract under a National Cooperative Purchasing Agreement”:

Name of the entity that awarded the contract;

Title of contract (description of the contract, i.e., office supplies);

A web link to where the contract can be viewed online;

Length of contract (must be consistent with length of public contracts law regulating the contracting unit);

A statement naming the vendor to whom the contracting unit intends to award the contract;

A statement of the authority under which the contract is being awarded; generally this will be N.J.S.A. 52:34-6.2(b)(3); and

A notice of when the comment period ends. (Page7—LFN2012-10) (Model Notice--Page 10)

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Limitations, Fiscal, and Reporting Requirements

Not Applicable to Public Works/Construction Contracts

The use of national cooperative contracts only applies to contracts for goods and services; it does not apply to “public works” or construction contracts.

This prohibition may affect a contracting unit that plans to construct or install turf and synthetic turf fields, masonry, fencing, roofing, or indoor carpet flooring projects. (Page 8—LFN 2012-10)

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Reminder Guidelines—Appendix B Once a decision is reached to utilize a national cooperative contract where the amount is over the contracting unit’s bid threshold, the purchasing agent should take the following steps:

Conduct due diligence on a national contract to determine if the contract will result in cost savings after all factors, including charges for service, material and delivery, have been considered. Ensure there is documentation backing up this determination.

Review any national contract under consideration to determine if it meets New Jersey standards.

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Publish a “Notice of Intent to Award Contract under a National Cooperative Purchasing Agreement” in the official newspaper, on your official website, and on “Bulletin NJ” when available.

Prepare a contract and related documents (i.e., Certificate of Availability of Funds, etc.) for governing body action. Include the State Comptroller’s language requiring the vendor to maintain records for five (5) years in the contract document.

Execute contract pursuant to routine practices. If the contract is above two million dollars but below ten million dollars, report the contract to the Office of the Comptroller within twenty business days of award.

Keep documentation of award on file for audit purposes, as with any other contract award. (Page 11-12—LFN 2012-10)

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National Cooperative Contracts We are not finished!

Solicitation of Quotations—N.J.S.A. 18A:18A-37 For all contracts that in the aggregate are less than the bid threshold but 15 percent or more of that amount, and for those contracts that are for subject matter enumerated in subsection a. of N.J.S.A. 18A:18A-5, except for paragraph (1) of that subsection concerning professional services and paragraph (3) of that subsection concerning work by employees of the board of education, the purchasing agent shall award the contract after soliciting at least two competitive quotations, if practicable.

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We are reminded in LFN 2012-10, Page 2, that provisions of the notice applies when the aggregate exceeds the bid threshold and therefore public bidding is not required when using a national cooperative contract.

Plainly speaking, school districts must comply with LFN 2012-10 when the aggregate exceeds $40,000. For contracts in the aggregate of $6,000 through $39,999, the school district must solicit competitive quotations pursuant to N.J.S.A. 18A:18A-37.

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Due Diligence Document Check Names of Business Must Match?

Submission of Documents We are reminded at a minimum, the following vendor documents shall be submitted to the contracting agent prior to the award of contract:

Affirmative Action Evidence

Business Registration Certificate

Chapter 271 Political Contribution Disclosure Form

Iran; Disclosure of Investment Activities

Non-collusion Affidavit

Statement of Ownership (Stockholders’ Disclosure)

W9 IRS Form

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Due Diligence—Checking Business Names Is anyone in your school district checking the names of the business found on the National Cooperative Purchasing website with the name of the business found on the submitted documents?

The name of the business found on the official website must match the name of the business found on the submitted documents.

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Due Diligence Document Check Who is the name on the check?

Name on the Purchase Order The name of the vendor on the purchase order has to be the name of the vendor found on the National Cooperative website. After the order is received, the vendor is to receive payment.

What is the name on the check? You may be surprised the vendor receiving the purchase order, is not the vendor receiving payment. It may be a bank or a financial services company.

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Due Diligence Document Check Who is the name on the check?

Ordering from one entity and paying another entity could be problematic.

N.J.S.A.18A:19-1. The money or funds of the board in the custody of the secretary or treasurer of school moneys shall be expended by the secretary or treasurer of school moneys by, and only by, warrants, each made payable to the order of the person entitled to receive the amount thereof and specifying the object for which it is issued, signed by the president and secretary of the board and the chief school administrator or by the treasurer of school moneys, as appropriate to the district.

Please check with your auditor!

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Again with the Documents! If you auditor or board attorney permits your district to pay another party, then remember to collect the appropriate documents from the other party whether it be a bank or a financial services company.

Affirmative Action Evidence

Business Registration Certificate

Chapter 271 Political Contribution Disclosure Form

Iran; Disclosure of Investment Activities

Non-collusion Affidavit

Statement of Ownership (Stockholders’ Disclosure)

W9 IRS Form

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Signed Affidavit or Signed Declaration (Voucher)

When ordering from a vendor, school districts usually issue a two (2) page purchase order document:

Page 1 Vendor Purchase Order Document Page 2 Voucher Form

Upon receipt of the goods or completion of the services, a vendor submits an invoice and the signed voucher.

Claimant Certification Some vendors may want to issue a claimant certification requesting payment, instead of submitting a signed voucher. Claimant certifications do not apply to school districts. School districts have to comply with N.J.S.A. 18A:19-3, Affidavit or Signed Declaration Required!

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Affidavit or Signed Declaration Required

N.J.S.A. 18A:19-3.All claims and demands, that equal or exceed 15% of the bid threshold amount established pursuant to N.J.S.18A:18A-3, except for payrolls and debt service, shall be verified by affidavit, or by a signed declaration in writing,contained therein or annexed thereto, to the effect that the same are correct in all particulars, that the articles have been furnished or the services rendered as stated therein and that no bonus has been given or received on account thereof.

Once again, please confirm with your auditor or board attorney.

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Thank you

James Shoop