New Jersey-2010-A1592-Introduced

An Act concerning the bidding process for certain local public contracts, amending P.L.1999, c.39, and supplementing P.L.1971, c.198 (C.40A:11-1 et seq.).

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

1. (New section) a. In the case of a bidding process for a public works contract, a bid may be withdrawn at any time prior to the time specified for receipt of bids, or within five business days after either a bid opening or a scheduled pre-award meeting, whichever comes later, due to an error on the part of the bidder. The request must be submitted via certified or registered mail to the address to which the bid was directed, and shall be effective upon mailing.

b. A request for withdrawal of a bid made after the specified number of days allowed shall result in automatic forfeiture of the bid security, pursuant to subsection a. of this section.

c. The contractor shall submit credible evidence, including original documents, that support the claim of an error for the withdrawal of a bid, setting forth the following grounds for withdrawal:

(1) An error, clerical as opposed to judgmental in nature and verifiable by written evidence, occurred in the computation of the bid;

(2) The error constitutes either an unintentional and substantial computational error or an unintentional omission of a substantial quantity of labor, material, or both, from the final bid computation; and

(3) There was an absence of gross negligence in the preparation of the bid.

For the purposes of this paragraph, gross negligence may include:

(a) the failure of a bidder to account for two or more categories of work, or one of the five types of work set forth in section 16 of P.L.1971, c.198 (C.40A:11-16);

(b) the use of multiple erroneous quotations from subcontractors or suppliers; or

d. Following an approval of a timely request for withdrawal of a bid, the bid guarantee shall be returned. If the bidder fails to meet its burden of proof and fails to execute the contract, the request to withdraw shall be denied and the bid guarantee is forfeited and becomes the property of the contracting unit. The decision of the governing body shall be final.

e. Once the decision to approve the withdrawal is made, the contracting unit shall continue the award process with the remaining bids.

f. If a bidder withdraws a bid in accordance with this section, that bidder shall be disqualified from future bidding on the same project, including when all bids are rejected, the project specifications are modified, and the project is rebid.

2. Section 2 of P.L.1999, c.39 (C.40A:11-23.2) is amended to read as follows:

2. 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);

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; and

f. A copy of the contractor's, and subcontractors' listed pursuant to subsection d. of this section, business registration as required pursuant to section 1 of P.L.2001, c.134 (C.52:32-44).

In addition, the contracting unit may require financial statements from all bidders after the receipt of the bids but before the awarding of the contract.

(cf: P.L.2004, c.57, s.1)

3. This act shall take effect immediately.

STATEMENT

This bill provides that in the case of a bidding process for a public works contract, a bid may be withdrawn at any time prior to the time specified for receipt of bids, or within five business days after either a bid opening or a scheduled pre-award meeting, whichever comes later, due to an error on the part of the bidder. The request must be submitted via certified or registered mail to the address to which the bid was directed, and shall be effective upon mailing. A request for withdrawal of a bid made after the specified number of days allowed shall result in automatic forfeiture of the bid security.

The contractor who wishes to withdraw a bid shall submit credible evidence, including original documents, that support the claim of an error for the withdrawal, setting forth the following grounds for withdrawal:

(1) An error, clerical as opposed to judgmental in nature and verifiable by written evidence, occurred in the computation of the bid;

(3) There was an absence of gross negligence in the preparation of the bid.

For the purposes of this bill, gross negligence may include:

(1) the failure of a bidder to account for two or more categories of work, or one of the five types of work set forth in section 16 of P.L.1971, c.198 (C.40A:11-16);

(2) the use of multiple erroneous quotations from subcontractors or suppliers; or

(3) the submission to the contracting unit of a bid withdrawal request, within the preceding six months.

Following an approval of a timely request for withdrawal of a bid, the bid guarantee shall be returned. If the bidder fails to meet its burden of proof, and fails to execute the contract, the request to withdraw shall be denied and the bid guarantee is forfeited and becomes the property of the contracting unit. The decision of the governing body shall be final. Once the decision to approve the withdrawal is made, the contracting unit shall continue the award process with the remaining bids. If a bidder withdraws a bid in accordance with this bill, that bidder shall be disqualified from future bidding on the same project, including when all bids are rejected, the project specifications are modified, and the project is rebid.

The bill also provides that the contracting unit may require financial statements from all bidders after the receipt of the bids but before the awarding of the contract.