Acting Governor Way signed into law S-3041, which prohibits cooperatives from receiving public works contracts when cooperative-approved vendors fail to pay prevailing wage; concerns cooperative purchasing agreements with other states; and permits contracting units to award certain indefinite contracts.  

Specifically, the new law prohibits a cooperative from being awarded a public works contract if they have failed to pay prevailing wages. A cooperative is defined as a “system of collective ownership of a corporation or other legal entity in which the shareholders or other co-owners each have a long-term proprietary interest or other long-term arrangement of control over the operation of the business.” 

In addition, the new law permits a contracting unit to only purchase and contract for construction services for a public works project through a cooperative purchasing agreement competitively bid in compliance with this law and set by a contracting unit in the State of New Jersey. Public works projects undertaken by a contracting unit through a cooperative purchasing agreement are subject to the “Public Works Contractor Registration Act” and the “New Jersey Prevailing Wage Act.” A contractor is prohibited from performing public works projects under a cooperative purchasing agreement if they fail to provide copies of submitted certified payroll records on more than three occasions or have been found to violate the New Jersey Prevailing Wage Act.  

Such contractors must submit copies of certified payroll records for every public works construction project performed under the contract and retain such documents for three years. To ensure compliance with the Prevailing Wage Act, a contracting unit must verify and maintain an accurate copy of the name, principal business address in the state, and telephone number of the contractor; or if the contractor’s principal business address is not within the state, the name and address of the contractor’s custodian of records and agent for service of process in this state. 

A contracting unit that uses a cooperative contract must post on their website upon award of such contract the following information for all public works projects: the contracting unit where the project will be completed, the cooperative purchasing contract number, the contractor performing the work, the cost of the project, and confirmation certified payroll records were received.  

A contracting unit implementing a cooperative purchasing agreement must solicit the Debarment List from the Department of Labor. A contracting unit is prohibited from awarding a contract to a debarred contractor or subcontractor. In addition, the contracting unit must verify on a monthly basis after contract award and through the duration of the contract term that the contractor or subcontractor has not been added to the debarment list.

The use of nationally recognized and accepted cooperative purchasing agreements by a contracting unit are subject to the rules and regulations adopted and promulgated by the Division of Local Government Services, in consultation with the Division of Purchase and Property Director, Commissioner of Education, and Secretary of Higher Education.

The new law also permits a contracting unit to award indefinite delivery, indefinite quantity contracts with a set term for goods or services, including public works, without final plans and specifications for an individual project, provided that the contract advertisement promotes free, open, and competitive bidding and sets forth a process by which individual purchase orders may be issued. A contracting unit may issue purchase orders under an indefinite delivery, indefinite quantity contract, provided the items for delivery were specified in the contract advertisement and a process for adding items for delivery is provided in the contract advertisement. The Division of Local Government Services, in consultation with the Commissioner of Education and Secretary of Higher Education, must adopt rules to implement this new provision. 

The new law prohibits a contracting unit from using “time and materials” contracts available through cooperative purchasing agreements for public works projects subject to the New Jersey Prevailing Wage Act.  

P.L. 2025, c. 180 will take effect on March 23, 2026. 

Contact:  Lori Buckelew, Deputy Executive Director, lbuckelew@njlm.org, 609-695-3481, x. 112