Potential Changes to New Jersey’s Public Bidding and Pay to Play Laws

A bill sponsored by Senator Paul Sarlo (Bill S2620), Deputy Majority Leader of the New Jersey Senate, would more than double limits on the size of contracts that local and county governments can issue without soliciting bids, raising it from $17,500 to $50,000 for municipalities without a qualified purchasing agent. The $50,000 limit would also apply to school districts without a qualified purchasing agent, whose no-bid limit is currently $32,000.

For municipalities and school districts that have a qualified purchasing agent, the no-bid limit would be raised from $44,000 to $100,000. For municipalities and counties with more than 100,000 residents, the bill proposes raising the cap to $200,000.

Although there are periodic adjustments to bid thresholds, the increase proposed by the bill is far in excess of the increases that have been statutorily required for many decades.

The impact of these proposed changes would reduce the costs and time necessitated by the bid and award process. Other potential public policy considerations are being debated in the municipal and school district administrative communities.

Other bills related to the award of public contracts are also being considered. One such bill is S2866 whereby the legislature is looking to amend the existing pay to play law. Under the current State law, each local government entity is permitted to adopt its own Ordinance to curtail the influence on municipal governance that some people believe is affected by political contributions. This has created a system whereby vendors or professionals who want to contribute to candidates have to navigate the complex maze of local ordinances in order to avoid running afoul which could cost them business or inadvertently causing them to become disqualified. A proposal in the legislature would take away this local home rule and mandate a statewide and uniform law that all political subdivisions would have to follow.

In addition, the legislature is looking to increase the maximum amount that an individual is permitted to contribute to a candidate from $2,600 to $5,200 per election cycle, as well as require additional disclosures. The bill also attempts to create disclosure requirements for 501(c)(4) social welfare organizations and SuperPACs, known as dark-money groups. The New Jersey legislature has previously attempted to create disclosure requirements for these groups, however a similar provision was ruled unconstitutional by the Federal Courts. We will have to wait and see whether this bill would meet the same fate if it does pass and gets signed into law. There have been some late amendments to the bill, one of which attempts to create Gubernatorial control over ELEC, which critics say would completely remove the independent nature of the watchdog agency.

Just as the current status of election law includes a myriad and complex maze of local ordinances, the legislation that is being proposed has many moving parts. It will be interesting to see if a consensus can be reached to have this legislation approved and signed into law this session.

We will continue to monitor these significant bills and provide updates as they unfold.

In the meantime, please contact Adrienne L. Isacoff or Craig Bossong if you have any questions.