An Act concerning permanent debarment of certain persons from working on government contracts and supplementing chapter 32 of Title 52 of the Revised Statutes and chapter 21 of Title 2C of the New Jersey Statutes.

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

1. a. A person who is convicted of a crime under subsection a. or b. of section 97 of P.L.1999, c.440 (C.2C:21-34) shall be permanently barred from:

(1) contracting with a contracting agency;

(2) subcontracting with a third party in furtherance of a contract with a contracting agency;

(3) serving as a key employee of any entity that is contracting with a contracting agency or any affiliate of such an entity; and

(4) serving as a key employee of any entity that is subcontracting with a third party in furtherance of a contract with a contracting agency or of any affiliate of such an entity.

b. As used in this section:

"Affiliate" means any entity that (1) directly, indirectly, or constructively controls another entity, (2) is directly, indirectly, or constructively controlled by another entity, or (3) is subject to the control of a common entity. An entity controls another entity if it owns, directly or individually, more than 50% of the ownership interest in that entity;

"Contract" means a contract or agreement to procure services or any material, supplies or equipment, or for any project involving construction, renovation, or restoration, or for the acquisition, sale, or lease of any land or building;

"Contracting agency" means the principal departments in the Executive Branch of the State Government, and any division, board, bureau, office, commission or other instrumentality within or created by such department, or any independent State authority, commission, instrumentality or agency, or any State college or university, any county college, or any local unit;

"Key employee" means any natural person employed with an entity in a supervisory capacity or empowered to make discretionary decisions regarding business operations, including, but not limited to, presidents, vice-presidents, chief executive officers, chief financial officers, chief information officers, chief operating officers, directors, and supervisory managers;

"Local unit" means any contracting unit as defined pursuant to section 2 of P.L.1971, c.198 (C.40A:11-2) and any board of education as defined pursuant to N.J.S.18A:18A-2.

c. Prior to awarding any contract to any person or entity, that person or entity shall provide a written certification to the contracting agency that the person, or the key employees of the entity and its affiliates, and the subcontractors and the key employees of the subcontractors or their affiliates are not permanently debarred pursuant to subsection a. of this section. A contracting agency shall not make, negotiate, or award a contract to any person who or entity that does not provide such written certification as required by this subsection.

d. No contract with a subcontractor shall be entered into by any contractor under any contract with a contracting agency unless the subcontractor first provides the contractor with written certification that neither the subcontractor nor any of its key employees or the key employees of its affiliates are permanently debarred pursuant to subsection a. of this section. A contractor shall not be held liable for the veracity of any certification submitted by a subcontractor, and a contracting agency shall not withhold payment from a contractor based upon any false certification submitted by a subcontractor or upon any subsequent debarment of a subcontractor.

e. The contractor shall maintain and submit to the contracting agency a list of subcontractors and their addresses that may be updated from time to time during the course of the contract performance. A complete and accurate list shall be submitted before final payment is made under the contract. A contracting agency shall not be responsible for a contractor's failure to comply with this subsection.

f. The Department of the Treasury shall provide each contracting agency with appropriate language reflecting the obligations of contractors and subcontractors under this section that the contracting agency shall include in any contract document, bid specification, requests for proposals, or other documents notifying potential contractors of contract opportunities with a contracting agency.

g. In situations of an emergent nature, a contracting agency may enter into a contract with a person or entity, provided that the contractor agrees to provide the written certification required pursuant to subsection c. of this section within two weeks of the execution of the contract. The contracting agency shall not make final payment to the contractor until such time as the contractor provides the written certification. Failure to pay the contractor until the written certification is received shall not be grounds for the agency being liable for payment.

h. The requirements of this section shall not apply with regard to purchases made pursuant to sections 1 and 7 of P.L.1996, c.6 (C.52:34-6.1 and C.52:34-6.2).

2. Upon conviction of a person of a crime under subsection a. or b. of section 97 of P.L.1999, c.440 (C.2C:21-34), the county prosecutor or Attorney General shall provide notice of that conviction to the contracting agency that awarded the government contract at issue in that conviction.

The county prosecutor shall notify the Attorney General of any person who is convicted of a crime under subsection a. or b. of section 97 of P.L.1999, c.440 (C.2C:21-34). The Attorney General shall notify the State Treasurer of all relevant convictions under section 97 of P.L.1999, c.440 (C.2C:21-34) and the State Treasurer shall maintain a list of all persons who have been permanently debarred pursuant to subsection a. of section 1 of P.L. , c. (C. ) (pending before the Legislature as this bill). The list shall be made available to the public through the Internet.

3. This act shall take effect on the 30th day after the date of enactment.

STATEMENT

This bill provides for permanent debarment from contracting, subcontracting, or working as a key employee of a contractor or subcontractor that is contracting with a government entity and of any affiliate of a contractor or subcontractor of any person who is convicted under subsection a. or b. of N.J.S.A.2C:21-34. These subsections involve fraudulent activity in relation to government contracts.

This bill requires the State Treasurer to publish and maintain a list on the Internet of permanently debarred persons. Persons or entities wishing to contract with a government entity will be required to file a written certification stating that the person or entity and any subcontractors and key employees are not permanently debarred pursuant to this bill. In some emergency situations, the contractor may submit the written certification after the contract has been awarded.

The bill also requires that contractors receive written certification from subcontractors that neither the subcontractor nor any key employee, including any key employee of an affiliate of the subcontractor, is permanently debarred under the bill. Contractors are required to keep a list of subcontractors and submit that list to the government entity with whom the contractor is contracting. A contractor will not be held liable for the veracity of any certification submitted by a subcontractor, and a contracting agency will not withhold payment from a contractor based upon any false certification submitted by a subcontractor or upon any subsequent debarment of a subcontractor.

This bill does not apply to purchases from federal supply schedules or cooperative purchasing agreements with one or more states.