Township of Middle, NJ Chapter 113 Construction Contracts, Public

[HISTORY: Adopted by the Township Committee of the Township of Middle as indicate in article histories. Amendments noted where applicable.]

Article I Responsible Bidder Requirements

[Adopted 11-4-2019 by Ord. No. 1600-19]

§ 113-1 Findings.

Whereas:

A. To protect its financial investments and its substantial proprietary interests as a market participant the Township of Middle has a compelling interest in ensuring that all its contracts for public construction projects that it undertakes for which it provides financial assistance are performed promptly, at reasonable costs and with the highest degree of quality by qualified reputable contractors and properly trained and skilled workers and for these reasons shall implement this article; and

B. The requirements of this article are intended to supplement, not replace, existing contractor qualification and performance standards or criteria currently required by the Local Public Contracts Law, N.J.S.A. 40A:11-1 et seq., other contracting provisions as outlined herein or other legislative obligations; and

C. The Township of Middle in order to fulfill its obligations as outlined under N.J.S.A. 40A:11-1 and to ensure that contracts are awarded in an atmosphere that invites competition and guards against favoritism, improvidence, arbitrary conduct, extravagance, fraud, corruption, and for the purpose of securing the best project work results possible at the lowest cost practicable; and

D. The Township of Middle, pursuant to N.J.S.A. 40A:11-2(32), possesses certain discretion in determining the "lowest responsible bidder" and is entitled to specify the terms of the contract when its solicits bids along with the criteria that bidders must meet in order to be considered a "responsible" bidder pursuant to N.J.S.A. 40A:11-25 and in the exercise of its proprietary duties and responsibilities so as to ensure that bidders are qualified responsible firms that understand the unique challenges affecting construction project delivery, including but not limited to selecting subcontractors who have developed a satisfactory record of past performance and adequate expertise, including a highly trained workforce and an established record of successfully performing work projects in a safe, timely, cost-effective and professional manner; and

E. The Township of Middle solicits bids and/or proposals on many different types of construction contracts with varying factors affecting each procurement decision, and therefore must take into account the reasonable benefits arising from each bid and in the exercise of and in order to protect its proprietary interests due to the substantial taxpayer investments involved in the public construction project(s); and

F. In order to protect its substantial proprietary interests the Township of Middle has the inherent right to adopt procurement licensing and economic development regulations/ordinances and so as to ensure and pursuant to N.J.S.A. 40A:11-4 that the bidder has not had a prior negative experience and so as to impose bid specifications designed to ensure the performance capabilities of prospective bidders pursuant to N.J.S.A. 40A:11-25; and

G. Due to the magnitude of the bid threshold herein and in order to ensure the intended purpose of each of its work projects and that financial responsibility is an important factor in determining the lowest responsible bidder for public construction projects for which it provides financial assistance, the Township of Middle, through its contracting authority, shall require that every contractor and subcontractor that bids on a public construction project contract produce satisfactory evidence that the contractor/subcontractor is properly registered and authorized to conduct the type of work to be performed, including evidence that demonstrates that the entity possesses, complies with, and maintains such compliance with all valid licenses, registrations, ordinances and certificates required by the federal, state, and county laws, as well as complying with any general business license requirements of Township of Middle both prior to the award and during the term of the contract; and

H. The Township of Middle, in order to make its determination as to whether the bidding entity is responsible, shall confirm and substantiate that the contract awardee(s) can reasonably be expected to complete and perform under the contract specifications, and the Township of Middle, pursuant to N.J.S.A. 40A:11-20 through 40A:11-22 et seq., may require the successful bidder to post a bid performance and/or material bond(s) as well as the submission of documentation to verify that the successful bidder has secured any insurance requirements as required by applicable law and in conformance with said law, including general liability insurance, workers' compensation insurance and unemployment compensation insurance; and shall also determine if the successful bidder can reasonably be expected to complete the project within the time constraints as delineated in the request for bids and other procurement documents; and shall through the submission of documents from the bidder(s) and pursuant to N.J.S.A. 40A:11-20 through 40A:11-22 determine if the bidding entity maintains a satisfactory level of past performance and integrity as well as possesses the financial, supervisory, personnel, material, equipment, and other resources and expertise required to satisfactorily meet that entity's contractual responsibilities and obligations; and

I. In its determination of whether a bidder is "responsible," and to avoid any risks to projects caused by unqualified firms or firms held to be considered unsafe, the Township of Middle shall consider a bidder's record of conformity with environmental, labor and health and safety laws and regulations, including compliance with the requirements of the U.S. Department of Labor's Occupational Safety and Health Administration ("OSHA") and the New Jersey Department of Labor and Workforce Development. In order to ensure that its workforce is compliant with safe working procedures in order to protect the public, as well as to ensure to the greatest extent possible that work site accidents, injuries, etc., are minimized, shall affirm that any employee which will be assigned to the work project at a minimum has completed at least the ten-hour training course for safety standards established by OSHA; and

J. Current challenges in the construction labor market relating to the supply of skilled craft personnel exacerbate normal construction industry challenges, including those impacting project cost, quality of work, safety and scheduling parameters, which has been well documented by numerous industry sources both nationally and locally for over a decade, including Confronting the Skilled Workforce Shortage, Construction Users Roundtable (June 2004); The Perfect Storm: Factors Come Together Creating a Storm in the Construction Workforce. The Construction Executive (June 2004); America's Construction Industry: Identifying and Addressing Workforce Challenges, ETA/Business Relations Group Report (Dec. 2004); Craft Labor Supply Outlook: 2005-2015, Construction Labor Research Council (2004); 2013 U.S. Markets Construction Overview, FMI Corporation (2012); 2013 Dodge Construction Outlook, McGraw-Hill Construction Research & Analytics Group (Oct. 2012); Construction Users Roundtable, Skilled Labor Shortage Risk Mitigation; WP-1101, January 2015; Pam Hunter, Firms Anticipate More Worker Shortages Ahead, Engineering News Record, p. 13, February 9, 2015; and

K. In addition to a growing demand and shrinking supply, one of the key factors driving and further compounding construction industry skill supply challenges has been the continuous decline in skill training in this industry generally over the past several decades, a fact documented by the U.S. Commerce Department; L. Huang, Robert E. Chapman, and David T. Butry, Metrics and Tools for Measuring Construction Productivity; Technical and Empirical Considerations, U.S. Department of Commerce, National Institute of Standards and Technology, Office of Applied Economics, p. 23 (September 2009); and

L. The growing need of meeting skilled labor demands and the general decline of a pool of trained workers produces conditions that increase the likelihood of contractors and subcontractors deploying unskilled, untrained workers to construction job sites, including persons who receive little or no adequate safety training and, consequently, due to the inherent dangers that exist within the construction industry pose serious risks of injury to themselves, their coworkers and the general public, while also undermining important cost factors, as well as the scheduling goals of capital projects; and

M. Leading organizations in the construction industry, including trade associations representing project owners such as the Construction Users Roundtable, have repeatedly issued strong recommendations to parties purchasing construction services for large capital projects that, due to persistent, acute labor supply challenges, contractors and subcontractors should be prequalified on the basis of craft labor training to protect the project owner's financial and proprietary interests by ensuring that such firms have an adequate supply of trained, skilled craft personnel to perform the project; Confronting the Skilled Workforce Shortage, Construction Users Roundtable (June 2004); Construction Users Roundtable, Skilled Labor Shortage Risk Mitigation, WP-1101, January 2015; and

N. In seeking to address and remediate issues of construction skill shortages and the problems they cause for the industry including safety risks, the United States Congress passed the Fitzgerald Act, Pub. L. No. 75-308, 560 Stat. 664, H.R. REP> No. 75-945 (the National Apprenticeship Act), which created a system in which workers could be properly trained in construction skills and safety procedures through registered, formal apprenticeship training programs that meet established qualification, safety and performance standards and that such programs registered and approved by the United States Department of Labor ("US DOL"), stresses the need to expand industry apprenticeship programs as a means of building the pool of skilled labor, especially in the construction industry, U.S. Department's of Labor, Commerce, Educations, and Health and Human Resources, What Works in Job Training: A Synthesis of the Evidence 8 (July 22, 2014); and

O. The courts have recognized that states, counties and local jurisdictions, acting to protect substantial proprietary interests, have the right to stop procurement, licensing and economic development legislation and/or to impose contract bid specifications designed to ensure the performance capabilities of all prospective bidders and their employees, including apprenticeship training requirements and other craft labor qualifications; see Bldg. & Const. Trades Council of the Metro. Dist. V. Assoc. Builders & Contractors of Mass/R.I., Inc., 407 U.S. 218 (1993); Associates Builders & Contractors v. Mich. Dep't of Labor & Econ. Growth, 543 F.3d 275 (6th Cir. 2008); Hotel Employees & Restaurant Emps. Union, Local 57 v. Sage Hospitality Res., LLC, 390 F2d 206 (3rd Cir. 2004); Associated Builders & Contractors, Inc., New Castle County-F. Supp. 3d, 2015 WL 7257916 (D. Del. Nov. 17, 2015); and

P. Due to the critical impact that skilled construction craft labor has on public construction projects due to the limited availability of skilled construction craft labor, as well as potential imminent skill shortages, and most significantly due to the magnitude of the threshold amount herein and so as to insure that the work project will be completed in a timely and safe manner in order to protect its proprietary interests and the interest of the taxpayer funding of such projects, it is necessary to require contractors and subcontractors to participate in established, formal apprenticeship training programs for the purpose of promoting successful, cost-effective project delivery; and

Q. The most efficient means that bidders and their subcontractors have in order to ensure a highly trained, safety conscious and skilled workforce, as well as to provide for a safe project delivery is to require that bidders utilize an apprenticeship training program, registered with and approved by the US DOL, or any state agency having equal or higher requirements as the US DOL, for each separate apprenticeable occupation for which it employs employees in compliance with the performance standards of enrollment and graduation under 29 CFR Part 29, 29.5 and 29.6. The bidder shall be further required to demonstrate and affirm in its contractor certification form that it is in compliance with 29 CFR 29 et al., as well as the provisions of N.J.S.A. 34:20-1 et seq., the Construction Industry Independent Contractor Act; and

R. As a condition of performing work on a public construction project and/or construction projects subject to this article, all bidders, pursuant to N.J.S.A. 40A:11-26, shall submit a completed contractor responsibility certification provided by Township of Middle at the time the bidder submits its bid pursuant to N.J.S.A. 40:11-20 through 40:11-27 et seq. Moreover, and pursuant to N.J.S.A. 40:11-27, all bidders must respond to the contractor responsibility certification under oath. In addition, all bidders shall further simultaneously submit with its contractor responsibility certification and, pursuant to N.J.S.A. 40:11-16(a) and (b) and N.J.S.A. 40:11-23-2(d), a subcontractor list containing the names of any proposed contractors required to be listed in the bid, including the subcontractor's address and a description of their work expertise; and

S. Should it be established, after awarding a contract that any of the information required by this article and provided by the bidding entity to the Township of Middle was falsified or inaccurate, the bidder will be subject to the penalties as outlined under N.J.S.A. 40:11-27 through 40:11-34 et al., and the contract shall be voided; and

T. The following definitions shall govern within this article:

FINANCIAL ASSISTANCE

Something of economic value provided by the Township of Middle to a private entity, expressly articulated or identified, in writing, by the Township of Middle, including, but not limited to real property, loans, loan guarantees, grants, tax exemptions, tax abatements, tax incentive financing, and rent subsidies or reductions approved, funded, authorized, administered or provided by the local government entity or any of its instruments in connection with construction.

PUBLIC CONSTRUCTION CONTRACT

Any public construction project for the construction, reconstruction, demolition, alteration or renovation of buildings at the public expense, required to be bid under the Local Public Contracts Law[1], and which requires that workers be paid the prevailing wage determined by the Commissioner of Labor pursuant to the provisions of the applicable statutory language.

[1] Editor's Note: See N.J.S.A. 40A:11-1 et seq.

§ 113-2 Purpose.

A. Due to the magnitude of the threshold amount as stated herein, the Township of Middle recognizes that there is a need to ensure that work on public works projects, maintenance work and contracts for public works are performed by responsible, qualified firms that maintain the capacity, expertise, personnel, equipment and other qualifications and resources necessary to successfully perform public contracts in a timely, reliable and cost-effective manner.

B. To effectuate the purpose of selecting responsible contractors for public contracts and to protect the substantial taxpayer investments in such contracts, prospective contractors and subcontractors shall be required to meet pre-established, clearly defined, minimum standards relating to contractor responsibility, competency, experience, and the adequacy of resources.

C. Further, due to the critical impact that skilled construction craft labor has on public works projects, and due to the limited availability of skilled construction craft labor, it is necessary to require contractors and subcontractors to participate in bona fide apprenticeship training programs in the trades and classifications in which they employ construction craft personnel.

D. Therefore, the Township of Middle shall require compliance with the provisions of this article by business entities seeking to provide services to the Township of Middle as specified herein. The requirements of this article are intended to supplement, not replace, existing contract qualification and performance standards or criteria currently required by law, public policy or contracting documents. However, in the event that any of the provisions of this article conflict with any law, public policy or contracting documents, or is held to be invalid and unenforceable by a court of competent jurisdiction, the remaining provisions shall remain in full force and effect.

§ 113-3 Responsible contractor requirements.

A. All contractors and subcontractors of any tier that perform work on projects valued at or above $250,000, including any public works project, N.J.S.A. 40A:11-2(34), maintenance work, or contracts for public works, shall meet the requirements of this article.

B. All firms engaged in contracts covered by this article shall be qualified, responsible contractors and subcontractors that have sufficient capabilities in all respects to successfully perform contracts on which they are engaged and will continue to have sufficient capability for the duration of the contract in question, including the necessary experience, equipment, technical skills and qualifications, as well as the adequate organizational, financial and personnel resources necessary to perform the contract. Firms bidding on public contracts shall also be required to have a satisfactory past performance record and a satisfactory record of law compliance, business integrity and business ethics.

§ 113-4 Contractor responsibility certification requirements.

A. As a condition of performing work on a contract subject to this article, a general contractor, construction manager or contractor seeking the award of a contract shall submit a contractor responsibility certification at the time it submits its bid for the contract work. The failure to submit the contractor responsibility certification shall disqualify a contractor from performing the contract work.

B. The contractor responsibility certification shall be completed on a form provided by the contracting unit, as defined at N.J.S.A. 40A:11-2(1), governing body, as defined at N.J.S.A. 40A:11-2(2), or other procurement entity or agency, and shall reference the project for which a bid is being submitted by name and contract or project number.

C. In the contractor responsibility certification form, the construction manager, general contractor or contractor shall confirm and verify its past performance and work history and its current qualifications and performance capabilities.

D. In the contractor responsibility certification form, the construction manager, general contractor or contractor will, pursuant to the obligation and criteria as set forth in N.J.S.A. 40A:11-16 and 40A:11-23.2(d), provide a list of its subcontractors.

E. Notwithstanding, N.J.S.A. 40A:11-16 in the contractor responsibility certification, the firm shall further provide subcontractor responsibility certifications for all identified subcontractors within 10 days of receiving the notice of intent to award contract or within 10 days of being awarded a contract.

F. In the contractor responsibility certification form, the firm shall attest to the following:

(1) The firm has not been disbarred or suspended by any federal, state or local government agency or authority in the past three years or has not defaulted on any project in the past three years.

(2) The firm has not had any type of business, contracting or trade license, registration and other certification revoked or suspended in the past three years.

(3) The firm and its owners have not been convicted of any crime relating to the contracting business by a final decision of a court of law or government body in the past seven years.

(4) The firm has not, within the past three years, been found in violation of any law applicable to its contracting business, including, but not limited to, licensing laws, tax laws, prompt payment laws, wage and hour laws, prevailing wage laws, environmental laws with others, where the result of such violation was the payment of a fine, back pay damages or any other type of penalty in the amount of $3,000.

(5) The firm will utilize skilled workers who have successfully participated in and completed an apprenticeship program or other training program certified by the US DOL and in compliance with 29 CFR 29. A questionnaire attached to the contractor certification form will provide for the attestation of compliance.

(6) The firm shall notify the contracting unit, governing body, or other procurement entity or agency within seven days of any material changes to all matters attested to in this certification.

(7) The firm understands that the contractor responsibility certification requirements shall be executed by a person who has sufficient knowledge to address all matters in the certification and shall include an attestation stating, under the penalty of perjury, that the information submitted is true, complete and accurate.

(8) The contractor and subcontractor responsibility certification forms attached hereto shall be used to verify that all bidders meet the requirements of this article.

(9) After a notice of intent to award contract has been issued, the Township of Middle shall undertake a review process for a period of at least 14 days to determine whether the prospective awardee is a qualified, responsible contractor in accordance with the requirements of this article and other applicable laws and regulations and has the resources and capabilities to successfully perform the contract.

(10) If the Township of Middle determines that a contractor or subcontractor responsibility certification contains false or misleading material information that was provided knowingly or with reckless disregard for the truth, the bidder shall be subject to the penalties as outlined under N.J.S.A. 40A:11-34.

(11) All certification forms will be available for public inspection through a publicly accessible website or other comparable means within 30 days after a notice of intent to award contract has been issued.

(12) The Township of Middle may conduct any additional inquiries to verify that the prospective awardee and its subcontractors have the technical qualifications and performance capabilities necessary to successfully perform the contract and that the firms have a sufficient record of law compliance and business integrity to justify the award of a public construction project contract. In conducting such inquiries, the Township of Middle may seek relevant information from the firm, its prior clients or customers, its subcontractors or any other relevant source.

(13) If at the conclusion of its internal review, the Township of Middle determines that all responsibility certifications have been properly completed and executed and concludes that the qualifications, background and responsibility of the prospective awardee and the firms on its subcontractor list are satisfactory, it shall issue a written contractor responsibility determination verifying that the prospective awardee is a qualified, responsible contractor. In the event a firm is determined to be nonresponsible, the Township of Middle shall advise the firm of its finding, in writing, and proceed to conduct a responsibility review of the next lowest, responsive bidder or, if necessary, rebid the project.