Critics warn new law in New Jersey could exclude businesses from bidding on public works contracts

(The Center Square) – Legislation recently signed by Gov. Phil Murphy could exclude many businesses from bidding on public works contracts because they will not meet apprenticeship program requirements, business groups say.

S-4207/A-6119 updates New Jersey’s “Public Works Contractor Registration Act.” It increases apprenticeship program registration fees and gives the New Jersey Department of Labor and Workforce Development the power to audit federally regulated apprenticeship programs.

Companies that run afoul of the new law could face punishment such as disqualification from bidding on public contracts for up to three years or fines up to $25,000. Company employees who violate the law could face up to six months in jail.

“By signing this bill into law, Governor Murphy has severely limited the ability of small businesses – including many minority-owned businesses – to bid on public works contracts by stifling their ability to meet apprenticeship program requirements,” New Jersey Business & Industry Association (NJBIA) President and CEO Michele Siekerka said in a statement.

In December, the Associated Builders and Contractors of New Jersey and the African American Chamber of Commerce of New Jersey called on lawmakers to reject the measure. However, proponents say the law is necessary to ensure programs comply with state and federal requirements.

“We have recently seen an uptick of programs that are not complying with regulation – and that is unacceptable,” then-Senate President Steve Sweeney, D-Gloucester/Salem/Cumberland, said in a statement last month after the Senate Labor Committee approved the measure. “By having the Department of Labor ensure that the programs meet all requirements, we will be able to make sure that all public works apprenticeship programs are operating appropriately under the established requirements.”

But Siekerka contends the new law will exclude many businesses from bidding on public contracts, including smaller projects involving school districts and local municipalities.

“Let’s not forget that these businesses have already faced barriers to entry when bidding on public works contracts,” Siekerka said.

“This law will now further unfairly limit competition in the market, resulting in higher costs for these public works projects – which will, again, hit New Jersey taxpayers,” Siekerka added. We hope to work with the Legislature in this new session to address these concerns for our small businesses.”

The Office of Legislative Services (OLS) determined that the higher registration fees will increase state revenues. Additionally, OLS said collecting penalties from contractors that violate the new law will result in an “indeterminate” increase in state revenues to the General Fund.