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Critics warn that a new law in New Jersey could bar companies from bidding for public works contracts

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A recent law signed by Gov. Phil Murphy could bar many companies from bidding on public works contracts because they fail to meet the requirements of the apprenticeship program, business groups say.

S-4207/A-6119 updates New Jersey’s Public Works Contractor Registration Act. It increases registration fees for apprenticeship programs and gives the New Jersey Department of Labor and Human Development authority to audit state-regulated apprenticeship programs.

Companies that violate the new law face penalties such as being barred from bidding on government contracts for up to three years or fined up to $25,000. Company employees who break the law face up to six months in prison.

“By signing this bill into law, Gov. Murphy severely restricted the ability of small businesses — including many minority-owned businesses — to compete for public works contracts by stifling their ability to meet training 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 asked lawmakers to oppose the measure. But proponents say the law is necessary to ensure programs meet state and federal requirements.

“We’ve seen an upsurge of non-compliant programs lately — and that’s unacceptable,” then-Senate President Steve Sweeney, D-Gloucester/Salem/Cumberland, said in a statement last month after the Senate Working Committee had approved this measure. “By ensuring that the programs meet all requirements by the Department of Labor, we can ensure that all public works training programs are functioning properly according to the established requirements.”

However, Siekerka claims the new law will bar many companies from bidding for public contracts, including smaller projects involving school districts and local communities.

“Let’s not forget that these companies have already faced barriers to entry when they applied for public works contracts,” Siekerka said.

“Now, this law will further unfairly restrict competition in the marketplace, resulting in higher costs for these public works projects — which in turn will hit New Jersey taxpayers,” added Siekerka. 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) found that higher registration fees will increase government revenue. In addition, OLS said imposing penalties on contractors violating the new law will result in an “unspecified” increase in government revenue for the General Fund.

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