Bidders face new 10% bid-certification rule

Summary#

A-5644 would amend New Jersey’s P.L.2021, c.301, which concerns bids for public work covered by the New Jersey Prevailing Wage Act. Its stated goal is to expand the information and certifications required when the lowest bid is at least 10% below the next-lowest bid. The bill was introduced and is not law; if enacted, it would take effect immediately.

  • The low bidder must give the public body and project architect a detailed estimate and schedule of values within three days of notice.
  • Within five days, the bidder must provide prevailing-wage and truthfulness certifications, a certified contract schedule, and other required documents. Certain project subcontractors must also provide specified documents.
  • Missing the deadlines would be cause to reject the bid and award the contract to the next-lowest responsible and responsive bidder. The bidder could withdraw without penalty.
  • If the project is not completed according to the certified schedule, liquidated damages in the bid documents must be charged. A bidder who violates any provision of the Prevailing Wage Act while working on a public project would be barred from bidding on public work for one year.
  • The Labor and Workforce Development commissioner, in consultation with the Division of Local Government Services, must make rules standardizing the required submissions. A public body may hire a third-party cost estimator, but is not required to.

What it means for you#

  • Low bidders: If your bid meets the 10% threshold, you would have to submit the required information to the public body and project architect on short deadlines. The estimate must include items such as material and subcontractor quotes, supervision, insurance, and allowances.
  • Certain project subcontractors: Subcontractors covered by the bill’s reference to public-works subcontractors would have to provide specified affidavits, insurance and bonding certificates, and certifications, including participation in an approved apprenticeship program and non-debarment.
  • Public bodies: You would have to reject a bid for failure to meet the submission deadlines and award to the next-lowest responsible and responsive bidder. You could hire a third-party cost estimator.
  • Workers: The bill requires a certification that prevailing wages, including base wages and fringe benefits, will be paid at the applicable rates. It does not change the wage rates themselves.
  • Contractors: A Prevailing Wage Act violation during a public project would carry a one-year ban on bidding for public work under this bill.

Money#

No cost information is in the available material.

  • The bill requires the state labor commissioner to make rules and allows public bodies to hire a cost estimator; it gives no cost or staffing estimate.
  • Bidders and covered subcontractors would have to prepare and submit documents. The bill does not estimate their costs.

What is unclear#

  • The parent law is not supplied, so the current requirements and how this bill changes them could not be independently checked. The bill’s statement says current law requires the low bidder to certify that prevailing wages will be paid.
  • The bill does not explain how the required affidavits, certifications, or “certified” schedules must be prepared or what standards they must meet.
  • It does not explain how the rules will standardize submissions, or how the listed subcontractors’ responsibilities will be identified.
  • It does not set out a process for deciding whether a project failed to follow its schedule, or any exceptions to charging the liquidated damages in the bid documents.

Case for#

  • A detailed estimate may help a public body assess why a bid is much lower than the next bid.
  • Requiring wage, insurance, bonding, and apprenticeship certifications could give public bodies more information about a low bidder’s plans and qualifications.
  • Short deadlines and rejection for missing documents may make the requirements enforceable.
  • The one-year bidding ban and schedule-based damages may encourage compliance with wage rules and project commitments.

Case against#

  • A three-day deadline for a detailed estimate and a five-day deadline for other submissions could be difficult to meet; missing either deadline can cost a bidder the contract.
  • The required disclosures may take time and money to prepare, but the bill gives no estimate of those costs.
  • The bill does not explain how schedule delays will be assessed before all listed liquidated damages must be charged.
  • The one-year ban applies to a bidder that violates any provision of the Prevailing Wage Act while working on a public project; the bill does not describe how that ban would be imposed or reviewed.