If you have ever had the occasion – as I have – to exchange pleasantries with a representative of New Jersey’s Highway Patrol while idling on the shoulder of the New Jersey Turnpike, you know that the Garden State takes its law enforcement seriously and is not much inclined to entertain excuses. The same can certainly be said for the strict scrutiny the State’s Department of the Treasury accords to enforcement of New Jersey’s pay-to-play laws.
As this blog has noted previously, New Jersey is one of several states which imposes an absolute debarment on state contracting with any entity that has made relevant past state campaign contributions. Transparent contribution data, and strict state enforcement, make such debarment statutes fertile ground for bid protests and unintended disqualification for the unwary contractor. If it's true as they say that “the purpose of one’s life may be nothing more than to serve as a cautionary tale for others”, Langan Engineering & Environmental Services, Inc. may win this month’s commemorative mug for their disqualification last week from a two year site environmental consulting contract over a $500 campaign contribution made over two years ago.
The New Jersey statute in question, N.J.S.A. 19:44A-20.14, provides, in relevant part:
The State or any of its purchasing agents or agencies . . . shall not enter into an agreement or otherwise contract to procure from any business entity services or any material, supplies or equipment, or to acquire, sell, or lease any land or building, where the value of the transaction exceeds $17,500, if that business entity has solicited or made any contribution of money [to] any candidate or holder of the public office of Governor or of Lieutenant Governor, or to any State or county political party committee: (i) within the eighteen months immediately preceding the commencement of negotiations for the contract or agreement;
Langan Engineering fell victim to this statute last week when the New Jersey Appellate Division ruled that a $500 contribution to a legislative leadership PAC made on April 7, 2010, disqualified it from participating in an October, 5, 2011 New Jersey Schools Development Authority procurement proposal because negotiations on that contract had “commenced” while Langan was still debarred.
Langan Engineering argued that the New Jersey statute’s “commencement of negotiations” language could not possibly be read to apply to entities such as the School Development Authority which, by law, are not authorized to “negotiate” contracts but must, instead, issue Requests for Proposal.
Like the kind State Trooper who is nonetheless unmoved by the protestations of a pay-to-play blogger that he had only briefly sped up to pass a tractor trailer and was again operating within the speed limit, New Jersey’s Appellate Division was unmoved by Langan’s protestations that it was “eligible” again because publicly bid contracts cannot be negotiated. For purposes of New Jersey’s pay-to-play law, “negotiations” commence at “the time when the government agency takes the bids into consideration or scrutinizes them.” (Order, p.8). Any contractor having made a disqualifying contribution within the eighteen months preceding first bid submission must remain in the penalty box – ineligible to bid on such contract – regardless of when contract performance will actually commence.
Let us resolve to learn from Langan Engineering & Environmental Services, Inc.’s misfortune and maintain strict corporate oversight over relevant contributions.
Many thanks to my friends at Genova Burns Giantomasi & Webster, authors of the fine Corporate Activity Law blog, for sharing their briefing in this case.