Monday, August 11, 2014

NJ Prohibits Financial Statements in Bid/Proposal Processes

The New Jersey legislature has approved a bill that would prohibit public agencies from requiring bidders and proposers from submitting a financial statement if a bid guaranty (bid bond, cashier's check, certified check) is submitted. A bid guaranty is a measure of protection for the public on the financial viability of the bidder/proposer.

Unanimous support:  A-1794 passed both the New Jersey Senate and Assembly unanimously in June 2014.  

Purpose of bill:  The bill was promoted as a means to encourage small businesses to participate in public contracting, and not impose on businesses an often onerous, costly, and time-consuming process of obtaining and providing a financial statement to demonstrate financial viability.

Exception:  The bill includes an exception for any federally funded project that requires submission of a financial statement by bidders or proposers as a condition of a public agency receiving a grant.

Public records:  Prohibiting submission of financial statements also eliminates the situation in which confidential information must sometimes be disclosed under public records laws.
Mike Purdy's Public Contracting Blog
© 2014 by Michael E. Purdy Associates, LLC

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