OSC Procurement NJLM 2019 PROTECTED.pptx [Read-Only]

Microsoft PowerPoint - OSC Procurement NJLM 2019 PROTECTED.pptx [Read-Only]Comptroller New Jersey League of Municipalities
November 20, 2019 Barbara Geary, Director of Procurement Division
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TODAY’S AGENDA
• How to contact OSC
OSC HISTORY
• Independent office established in 2007 in the Executive Branch, in, but not of, Treasury.
• In 2010, the Office of the Inspector General and the Office of the Medicaid Inspector General were abolished and all of the functions, powers and duties of those offices were transferred to the OSC.
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ABOUT THE OFFICE OF THE STATE COMPTROLLER (OSC)
• Created to bring greater efficiency and transparency to the operation of all levels of NJ State government.
• The State Comptroller leads the day-to-day operations of the OSC.
• Four divisions: Audit, Investigations, Procurement and Medicaid Fraud.
• Statutory Authority: N.J.S.A. 52:15B-1 et seq., N.J.S.A. 52:15C-1 et seq. and N.J.S.A. 30:4D-53 et seq.
• Regulations: N.J.A.C. 17:44-1.1 et seq.
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OSC’s PROCUREMENT DIVISION
OSC’s Procurement Division has statutory responsibility to review and monitor the process of soliciting proposals for and awarding contracts valued at $2 million or more.
N.J.S.A. 52:15C-10 • OSC contract review includes all contracts:
– Invitations to Bid, Requests for Proposals, Requests for Qualifications – Leases, land sales and concession agreements – Any other agreement that meets the OSC review threshold
• OSC does not review – Collective bargaining agreements – Certain redevelopment agreements
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N.J.S.A. 52:15C-14(a)
• All units in the executive branch of State government, including entities exercising executive branch authority, independent State authorities, public institutions of higher education, units of local government and boards of education and their employees shall provide full assistance and cooperation with any audit, performance review or contract review by the State Comptroller.
OSC JURISDICTION
New Jersey Office of the State Comptroller 6
• 616 School Districts • 565 Municipal Governments • 216 Local Authorities and Commissions • 186 Fire Districts • 85 Housing Authorities • 43 State Authorities • 31 State Departments and Other Agencies • 33 Urban Enterprise Zones • 31 Public Colleges and Universities • 21 County Governments • 21 County Tax Boards • 19 County Park Commissions • 18 Joint Insurance Fund Commissions • 17 Workforce Investments Boards
Total: Over 1,900 Public Entities
ENTITIES SUBJECT TO OSC CONTRACT OVERSIGHT
Pursuant to N.J.S.A. 52:15C-10, all government units are required to provide notice to OSC as follows:
1) For contracts expected to be greater than $10 million, notice must be submitted to OSC and Pre-Advertisement Review is required at least 30 days prior to advertisement
Includes contract amendments/extensions/renewals valued at $10 million or greater
2) For contracts greater than $2 million but less than $10 million, Post- Award Notice must be submitted to OSC no later than 20 business days after award
Includes contract amendments/extensions/renewals valued at $2 million or greater
3) For emergency contracts greater than $2 million, Post-Award Notice must be submitted to OSC no later than 30 business days after award
NOTICE REQUIREMENT
Open Competition
“The purpose is to secure competition and to guard against favoritism, improvidence, extravagance and corruption.
Statutes directed toward these ends are for the benefit of the taxpayers and not the bidders; they should be construed with sole reference to the public good; and they should be rigidly
adhered to by the courts.”
Twp. of Hillside v. Sternin, 25 N.J. 317, 322 (1957).
WHAT WE LOOK FOR IN ALL CONTRACTS
The Solicitation:
Contains all statutory requirements – forms & statutory language.
Does not identify name brands as expressly prohibited by LPCL unless proper procedure followed.
Prequalification requirements, if any, were approved by DCA.
The scope of work is clear.
Doesn’t favor a particular bidder.
For Competitive Contracting: Evaluation criteria are reasonable and relate to the bid or RFP requirements.
WHAT WE LOOK FOR : CONTRACTS > $10 MILLION
PRE-ADVERTISEMENT REVIEW
Did the entity follow proper statutory procedure?
Did the solicitation include all statutory requirements – forms & statutory language?
Was the contract awarded on the proper basis (low bid vs. price & other factors)?
Was the contract awarded for the correct duration?
Did the bid or proposal comply with the solicitation?
Were the required forms properly filled out by the bidder?
If there was a bid protest or litigation, what went wrong?
WHAT WE LOOK FOR: CONTRACTS BETWEEN $2 MILLION & $10 MILLION
POST-AWARD REVIEW
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ERROR: Contracting unit shall not pay interest on late invoices. • Amendment to the LPCL became effective on February 1, 2019. • The law requires local governments to pay interest on invoices for
goods and services if payment to the vendor is not made within the required payment date.
• Law includes a “default” payment date of 60 calendar days from the date specified in the contract.
• If no date is specified, then payment is required within 60 calendar days from the receipt of a properly executed invoice.
• If your bid template states that the local government will not pay interest – you must update!
• See Local Finance Notice 2019-02.
PROMPT PAYMENT FOR GOODS AND SERVICES
N.J.S.A. 40A:11-19.1
OMISSION: Changed conditions clauses in construction contracts.
• LPCL amendment effective on January 16, 2018.
• Must include specific clauses from the statute in construction bid documents.
• Recommend reviewing the General Provisions and/or Special Provisions for consistency.
CHANGED CONDITIONS CLAUSES N.J.S.A. 40A:11-16.7
OMISSION: Changed conditions clauses in construction contracts.
• LPCL amendment addresses: • Differing site conditions; • Suspension of the work; • Change in character of the work; and • Change in quantity of the work.
• Be mindful that if you are using AIA form documents, they may require additional revisions to ensure compliance with the changed site conditions clauses.
CHANGED CONDITIONS CLAUSES N.J.S.A. 40A:11-16.7
ERROR: Bid documents require both a bid bond and a financial statement!
• LPCL Amendment effective on September 10, 2014 added a new paragraph (f) to N.J.S.A. 40A:11-13 and similar language to N.J.S.A. 40A:11-4.4 (competitive contracting).
• No Specifications may: Require that any bidder submit a financial statement 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.
FINANCIAL STATEMENTS AND BID BONDS
ERROR: Bid documents require submission of the Business Registration Certificate with the bid!
History/ Important Amendments:
L. 2001, c. 134, § 1, eff. June 29, 2001, operative Sept. 1, 2001
L 2004, c. 57, § 3, eff. June 29, 2004, operative Sept. 1, 2004
L. 2009, c. 315, § 2, eff. Jan. 18, 2010
BUSINESS REGISTRATION CERTIFICATE
• 2009 amendment adjusted the deadline for bidders to submit the Business Registration Certificate (BRC) from time of bid to the time of contract award or authorization.
• N.J.S.A. 40A:11-23.2 also amended to remove (f) which required the BRC as a mandatory bid item.
• No longer have to reject a bid for failure to submit the BRC.
• The law does not require bidders to have, or have applied for, a BRC at the time of bid.
• Removed the contractor’s requirement to provide written notice to its subcontractors of the BRC requirement.
• Your Bid documents should include: • Penalty for failure to provide the BRC or proof of business registration:
• $25 per day, not to exceed $50,000 if business organization fails to provide the BRC or provides false business registration information. N.J.S.A. 54:49-4.1
• Include language in the contract requiring that the contractor shall collect and remit to the Director of the Division of Taxation the use tax due pursuant to the Sales and Use Tax Act (N.J.S.A. 54:32B-1 et seq.) on all sales of tangible personal property delivered into the State.
• Updated guidance and uniform contract language from the Department of the Treasury:
http://www.state.nj.us/treasury/revenue/busregcert.shtml
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• BRC and Emergency contracts - N.J.S.A. 52:32- 44(k): The contractor shall provide the BRC to the School District within two weeks of execution of the contract. The local government shall not pay the contractor until the BRC or proof of registration is provided. The local government cannot be held liable for failure to pay the contractor until the contractor provides BRC or proof of registration.
• BRC and Cooperative contracts – N.J.S.A. 52:32- 44(j): • The local government that awards the initial contract shall receive
and maintain the BRC on file.
New Jersey Office of the State Comptroller
BRC: EMERGENCY AND COOPERATIVE CONTRACTS
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ERROR: Bid documents require submission of the Public Works Contractor Registration Certificate with the bid.
N.J.S.A. 34:11-56.51 says: • No contractor shall bid on any contract for public work unless it is
registered pursuant to the Public Works Contractor Registration Act.
• No contractor shall list a subcontractor in a bid proposal for the contract unless the subcontractor is registered pursuant to the Act at the time the bid is made.
• No contractor or subcontractor, including a subcontractor not listed in the bid proposal shall engage in public work under the contract, unless the subcontractor is registered pursuant to the Act.
PUBLIC WORKS CONTRACTOR REGISTRATION ACT
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N.J.S.A. 34:11-56.55 says: Each contractor shall, after the bid is made and prior to the awarding of the contract, submit to the public entity the certificates of registration for all subcontractors listed in the bid proposal.
Applications for registration shall not be accepted as a substitute for a certificate of registration for the purposes of this section.
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Remember: • A pending application under the PWCR Act is not
sufficient! • Bids should not be rejected for failure to include the
registration certificate if the contractor is actually registered pursuant to the PWCR Act.
• Proper bidder registration can be checked on the Department of Labor and Workforce Development website.
ERROR: Bid Specifications cite to N.J.S.A. 34:9-2 - a law that gives preference to New Jersey citizens in public works contracts and was struck down as unconstitutional.
This statute is actually still on the books but was found unconstitutional in 1981. Neshaminy Constructors, Inc. v. Krause, 181 N.J. Super. 376 (Ch. Div. 1981).
Remove it from your bid templates!
PREFERENCE FOR NEW JERSEY RESIDENTS IN PUBLIC WORKS CONTRACTS
ERROR: Bid Specifications include alternates, but do not specify how the alternates will be selected.
For projects with an estimated cost of greater than $500,000, N.J.S.A. 40A:11-23.1(d) if there is more than 1 specified alternate, then the contracting unit must: Specify the criteria or ranked order by which the alternates shall
be selected.
Became effective in 2010!
Cannot be selected in the sole discretion of the contracting unit.
SELECTION OF ALTERNATES PUBLIC WORKS CONTRACTS
ERROR: Bid checklist does not include the Disclosure of Investment Activities in Iran as required by N.J.S.A. 40A:11-2.1 and N.J.S.A. 52:32-57.
• N.J.S.A. 40A:11-2.1 requires local contracting units to “implement and comply” with N.J.S.A. 52:32-55 et al.
• N.J.S.A. 52:32-58 requires that person or entity that submits a bid or proposal or otherwise proposes to enter into or renew a contract to certify, at the time the bid is submitted or the contract is renewed, that the person or entity is not identified on a list created by the Treasurer as a person or entity engaging in certain investment activities in Iran.
• Effective in 2012!
ERROR: Your ownership disclosure form does not include limited liability companies or allow public companies to use last annual SEC filing to comply.
Amended as of August 31, 2016 by P.L. 2016, c. 43:
Adds disclosure requirement for owners of limited liability companies.
For publicly traded companies, if there is an entity or individual that holds a 10% or greater beneficial interest, disclosure may be made using the last annual SEC filing or foreign equivalent.
Remember – the disclosure must be continued until individual names are disclosed.
OWNERSHIP DISCLOSURE
ERROR: Bid documents erroneously state that Modification or Withdrawal of a bid is not permitted.
• Added in 2011, N.J.S.A. 40A:11-23.3 allows a bidder to request withdrawal of a bid due to a mistake within 5 business days after bid opening.
• Request must be in writing by certified or registered mail. • Must demonstrate a mistake was made and that:
• Enforcement of the contract would be unconscionable. • Mistake related to a material feature of the bid. • The mistake occurred even though the bidder exercised reasonable care. • The bidder will get relief by withdrawing the bid without serious
prejudice to the contracting unit.
WITHDRAWAL OF A PUBLIC WORKS BID
ERROR: Bid documents erroneously state that Modification or Withdrawal of a bid is not permitted. • The request for withdrawal shall be reviewed by the Purchasing agent,
legal counsel or chief administrative officer and make a recommendation to the governing body re: withdrawal.
• Governing body shall act upon the request at its next regularly schedule meeting.
• If granted, the bidder’s bid guarantee shall be returned.
• The contracting unit shall continue the award process with the remaining bids.
• The bidder who withdrew its bid is disqualified from future bidding on the same project.
ERROR: Bid documents erroneously state that Modification or Withdrawal of a bid is not permitted.
EXAMPLE OF INCORRECT BID SPECIFICATIONS:
A Bid may not be modified, withdrawn or canceled by the Bidder within thirty (30) calendar days of the actual opening thereof…
• Prior to the time and date designated for receipt of Bids, Bids submitted may be modified or withdrawn only by notice to the party receiving Bids at the place designated for receipt of Bids.
• Such notice shall be in writing over the signature of the Bidder or be by telegram; if by telegram, written confirmation over the signature of the Bidder shall be mailed and postmarked on or before the date and time set for receive of Bids.
ERROR: Bid documents state that tie bids are resolved by drawing lots!
N.J.S.A. 40A:11-6.1(d): Tie Bids
[T]he contracting unit may award the contract to the vendor whose response, in the discretion of the contracting unit, is the most advantageous, price and other factors considered.
AWARD OF TIE BIDS
ERROR: Bid documents state that tie bids are resolved by drawing lots or a coin toss!
Remove this language ASAP:
“The Owner reserves the right to determine between two (2) tie bidders who shall receive the contract by drawing lots. In the event the Owner makes such a decision, the names of each of the tie bidders shall be placed in a suitable receptacle and deposited in a closed container which shall be vigorously shook and a representative from the Owner or the Engineer shall draw the name of the successful bidder from the receptacle.”
AWARD OF TIE BIDS
ERROR: Bid documents state the governing body can reject any and all bids and award a contract in its best interest!
Unless you are using competitive contracting or an exception to public bidding: • 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.
• N.J.S.A. 40A:11-4.
CONTRACT AWARD
ERROR: Bid documents state the governing body can reject any bid in its best interest!
• Must reject a non-responsive bid. • If bidder omitted a material requirement of the bid.
• Failed to submit the Ownership Disclosure Statement.
• Is not registered under the Public Works Contractor Registration Act at the time of bid.
• Failed to submit the Investment Activities in Iran Disclosure.
• Failed to meet any mandatory requirement in the bid.
• May disqualify a bidder who would otherwise be the lowest responsible bidder due to “prior negative experience.” • Follow procedure under N.J.S.A. 40A:11-4(c).
BID REJECTION
ERROR: Bid documents state the governing body can reject any and all bids and award a contract in its best interest!
Rejection of all bids is governed by N.J.S.A. 40A:11-13.2 which states that all bids may be rejected for any of the following reasons: a. The lowest bid substantially exceeds the cost estimates for the goods or services; b. The lowest bid substantially exceeds the contracting unit’s appropriation for the goods or services; c. The governing body of the contracting unit decides to abandon the project for provision or performance of the goods or services; d. The contracting unit wants to substantially revise the specifications for the goods or services; e. The purposes or provisions or both of N.J.S.A. 40A:11-1 et seq. are being violated; f. The governing body of the contracting unit decides to use the State authorized contract pursuant to N.J.S.A. 40A:11-12.
REJECTION OF ALL BIDS
ERROR: Bid documents state the governing body can waive any and all informalities or “disregard” non- conforming, non-responsive or conditional bids! • Must reject a non-responsive bid. • Waiver is governed by the “River Vale” test:
• Whether the effect of a waiver would be to deprive the municipality of its assurance that the contract will be entered into, performed and guaranteed according to its specified requirements; and
• Whether the defect is of such a nature that its waiver would adversely affect competitive bidding by placing a bidder in the position of advantage over other bidders or by otherwise undermining competition.
• Meadowbrook Carting Co. v. Borough of Island Heights, 137 N.J. 307 (1994)
WAIVER OF BID REQUIREMENTS
• The specifications include affirmative action language from 1975. The legislature has amended N.J.S.A. 10:5-31 many times to add protected classes. Review and keep handy: Public Agency Guidelines for
Administering Equal Employment opportunity and Affirmative Action in Public Contracts issued by the Department of the Treasury
https://www.nj.gov/treasury/contract_compliance/documents/pdf/guideli nes/pa.pdf
• Your bid specifications require the contractor to install a pay phone on the construction site.
OTHER SIGNS OF OUTDATED BID DOCUMENTS
BONUS
Submission forms: https:://www.nj.gov/comptroller/divisions/procurement/fo rms
Phone: (609)984-2888
OSC PROCUREMENT DIVISION CONTACT INFORMATION
Government Fraud and Mismanagement Hotline: 1-855-OSC-TIPS or 1-855-672-8477 Email: [email protected]
Visit our website: https://nj.gov/comptroller/ Follow the online directions to subscribe to email notifications about the latest press releases and press advisories issues by the OSC.
Follow us on Twitter and Facebook! @NJComptroller www.facebook.com/NJComptroller
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Documents

OSC Procurement NJLM 2019 PROTECTED.pptx [Read-Only]