Business
Registration Certificate no longer statutorily required with
bid
P.L. 2009, c.315
(A-557/S2366): Relaxes
the requirements for Business Registration Certificate
submission with bids; permits submission prior to award of
contracts if not submitted with bid.
Effective for bids received and contracts awarded after
January 18, 2010.
This law removed
the requirement of the Local Public Contracts Law (N.J.S.A.
40A:11-23.2) that required a bid to be rejected if the bidder
failed to include a business registration certificate (“BRC”)
with the bid, even though it may have been the otherwise
lowest responsible bid. The
law now allows the BRC to be filed anytime prior to award of
the contract and the bidder had to have obtained the BRC prior
to receipt of bids. This
permits the BRC to be required with a bid, or submitted
subsequently. If a
BRC is required in a bid, but not submitted with the bid, it
will most likely be considered an immaterial defect; curable
by being filed prior to award of the contract as long as the
bidder had a BRC at the time of the bid.
Price
adjustment permitted on contracts for asphalt, cement and fuel
P.L. 2009, c.187
(A-436/S-2833): Permits
price adjustments in local public contracts for asphalt cement
and fuel. Effective
with contracts executed after May 1, 2010.
In today’s economy, the price of
petroleum-based products can have a significant impact on
construction contracts that involve large amounts of asphalt
and those that use large amounts of gas or diesel fuel.
Uncertainty in petroleum price fluctuations adds price
risk to construction bid calculations.
That uncertainty imposes additional risk on bidders.
This new law follows procedures historically used by
the State Department of Transportation (“DoT”) to allow
for increases and decreases in asphalt and fuel prices over
the course of large construction contracts.
See
2007
NJDOT Specifications – Division 150 Contract Requirements,
Section 160.01 through 160.03.
The law requires that
paving contracts involving more than 1,000 tons of hot mix
asphalt include a contract provision that allows for price
adjustments in the cost of asphalt.
Fuel price adjustments are based on DoT standards for
the type of construction equipment and the work done by
different equipment. For
fuel price adjustments, at least 500 gallons of fuel based on
the DoT equipment standards are required for a price
adjustment, and then, only in those months when the price
fluctuated more than five percent.
DoT maintains a web site
of index rates for asphalt and fuel that are adjusted monthly.
The law provides that when the quantity or equipment
use thresholds are reached, fuel price adjustments are made,
using the change in index rate from the time of bidding to
when the work was performed.
The change is treated as a “pay item” in
construction contracts.
This practice is not new to most
engineers that prepare bid specifications.
The law provides price risk protection to bidders,
allowing better bids using “sharper pencils,” reduces the
risk of change orders that may be intended to cover price
increases, and allows the contracting unit to take advantage
of reductions in pricing over the life of
a contract.
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