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June 12, 2014

Re: A-3059/S-1811 Buy American

Dear Mayor:

S-1811/A-3059 requires the use of goods made in the United States for public contracts; and which requires businesses that receive public contracts or development assistance to disclose job exportation information.

This fast track bill would significantly amend the “Buy American” provision of the Local Public Contracts law by expanding the definition and requiring a waiver process, modeled after the federal law, to purchase goods, manufactured products and services not made in America.

The bill defines “manufactured product” as a product that has been processed into a specific form and shape or combined with other raw material to create a material that has different properties than the properties of the individual raw materials. The bill differentiates the definition of “products of the United States” between manufactured products which are, and are not, comprised predominantly of iron or steel. For products that are comprised predominately of iron or steel, all manufacturing processes of the product, from the initial melting through the application of coatings, occurred in the United States. For manufactured product that is not comprised predominately of iron or steel “products of the United States” means the product has been mined, produced or manufactured in the United States and the cost of the product’s components mined, produced or manufactured in the United States exceeds 50% of the cost of all its components.

The bill would require a waiver in cases in which the municipality entering into the contract finds that manufactured products of the US are not available. Thirty (30) days prior to providing the waiver the municipality would be required to provide public notice summarizing the reasons for the proposed waiver and provide an opportunity for the public to comment. The notice must be posted prominently on the municipality’s website and provided to any person, firm or corporation that makes a written request for notification.

If after the public notice & comment period, the municipality determines to issue a waiver, the municipality must provide a detailed justification for the waiver that must be posted prominently on their website and provided to any person, firm or corporation that makes a written request for notification. The waiver shall include responses to any public comments received and be published before the waiver takes effect.

There are limited exemptions for when a municipality would not have to go for a waiver. They are:

(1) Manufactured or farm products of the United States are not available reasonable quantities; or

(2) The cost of buying products, manufactured or farm, in the United States is unreasonable. There is a presumption of unreasonableness for products manufactured in the United States that cost 20% above the fair market value for such products.

(3) Replacement parts or components for equipment provided under contract in effective before the bill as well as replacement parts or components for equipment that received a waiver.

(4) Information technologies or telecommunications products.

(5) Any product approved by or legally marketed by the Food and Drug Administration.

The bill would bar a contractor who knowingly uses or supplies procured products that are not manufactured or farmed in the United States for three years.

Finally, the bill establishes a joint legislative task force that is charged with conducting a study and creating and maintaining a comprehensive database of contract awards and development assistance provided by all State agencies that includes, but not limited to the information on the certifications. The findings and recommendations of the joint task force shall be reported in

The bill was amended on the floor and then passed yesterday by the Senate by a vote of 36-1 and the Assembly companion was amended and released from the Assembly Labor Committee. The amendments address some of the objections raised by interested parties, including the League.

While the amendments do mitigate some of the concerns raised by the League, we have remaining concerns, including the very tight time restrictions in the waiver process.

For questions and comments, please contact Lori Buckelew at lbuckelew@njslom.com or 609-695-3481 ext. 112.

Very truly yours,

William G. Dressel, Jr.
Executive Director

 

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