The Office of State Comptroller (OSC) has amended and readopted the Rules of the Office of State Comptroller. The League submitted comments last April in response to the overreaching proposed rules. The rules were readopted with minor changes. The new rules took effect on February 3, 2025, and will expire December 30, 2031.
OPRA Exemptions
The new rules (N.J.A.C. 19:70-1.5) exempt from disclosure under the Open Public Records Act (OPRA) any record obtained by or from the OSC during the course of an audit, investigation, evaluation, inspection, request for assistance and cooperation, a request for information, a performance review, contractor reviews, or other reviews.
In addition, the OPRA exemption extends to complaints or referrals to OSC, this includes the identity of the complainant. Also included is information communicated for notice and review by and between the covered entities and the OSC, except for written determinations designated by the OSC as public records. Any preliminary or draft report or letter issued to a covered entity come under the exemption, however, the final report is a public record. Finally, work papers, memoranda reports, plans, or other records that are made, maintained, or kept as part of any investigation, audit, or contract review by the OSC are exempt.
Furthermore, if a public agency receives a request which in any way identifies the record sought by means of a reference to the OSC’s audit, review, or investigation, or a subpoena issued pursuant to such investigation, the public agency’s response shall not disclose the existence of the OSC’s request for such document.
Public Contracting Oversight Division
N.J.A.C. 19:70-3.1 changes the “Procurement Division” in the OSC to the “Public Contracting Oversight Division.” The Public Contracting Oversight Division, in addition to monitoring and reviewing, also provides guidance on contracts under the OSC’s jurisdiction to ensure competition, transparency, public confidence in government, and avoidance of favoritism, and to correct deficiencies in contracts prior to advertisement.
Investigations Division
N.J.A.C. 19:70-1A.4 establishes an Investigation Division to investigate allegations of fraud, waste, and abuse concerning all entities exercising executive branch authority, public institutions of higher education, independent State authorities, units of local
government, and boards of education. The purpose of the Division is to promote integrity, efficiency, accountability, and transparency in the administration and operation of New Jersey’s government.
The Investigations Division will monitor the performance and investigate the conduct of elected officials, individual governmental officers, public employees, appointees, and programs; uncover waste and misconduct involving public funds; assess the performance and management of programs and the extent to which they are achieving their goals and objectives; and release reports and letters that contain its findings and recommendations. The Investigations Division will conduct investigations, evaluations, inspections, and reviews in accordance with the Principles and Standards for Offices of Inspector General issued by the Association of Inspectors General.
Thresholds
The rules specify dollar thresholds and replaces them with terms “post-award review threshold” and “pre-advertisement review threshold.” A “post-award review threshold” is the dollar amount, established in consultation with the Department of the Treasury, of contracts that must be submitted to the OSC pursuant to N.J.S.A. 52:15C-10.a. Effective July 1, 2020, the post-award review threshold is $2.5 million or greater, but less than $12.5 million.
“Pre-advertisement review threshold” is the dollar amount, established in consultation with the Department of the Treasury, of contracts that must be submitted to the OSC pursuant to N.J.S.A. 52:15C-10.b. Effective July 1, 2020, the pre-advertisement review threshold is $12.5 million or greater.
Review thresholds are adjusted in accordance with N.J.S.A. 52:15C-10.d.
Emergency Contracts
The rules define “emergency procurement” as a contract entered pursuant to an emergency condition that is a threat to public health, welfare, and safety and requires the immediate performance of services or delivery of goods.
For emergency contracts that meet the post-award threshold, a contracting unit must provide the OSC within 30 business days after the contract award certain documentation (N.J.A.C. 19:70-3.1(d)). N.J.A.C. 19:70-3.5 outlines the documentation required to include a description of goods, services or other subjects procured, the source of funding, all state and federal grants used for the contract, and any documents describing the nature of the threat to public health, safety, or welfare, along with a justification for the immediate need for the goods or services.
Contracts Subject to Review
N.J.A.C. 19:70-3.1(g) exempts from OSC Public Contracting Oversight Division review collective bargaining agreements, developers’ agreements entered into with an approval granted under the Municipal Land Use Law, redevelopment agreements under the Local Redevelopment and Housing Law, financial agreements under the Long-Term Tax Exemption Law, agreements under the Five-Year Exemption and Abatement Law, agreements under Municipal Landfill Site Closure, Remediation and Redevelopment Act.
The rule requires that contracts that exceed the post-award and pre-advertisement review thresholds for the purchase, sale, transfer, or lease of real estate and other related activities or contracts are subject to the Public Contracting Oversight Division review.
During the rule making process we attempted to seek clarity on “other related activities or contracts.” The OSC disagreed that the term was confusing and noted that N.J.S.A. 52:15C-10.b(1) authorizes the OSC to review other related activities and contracts. The OSC stated “In light of a long history of creativity employed by contracting units to structure procurements, transactions, and contracts in innovative ways to meet the public entity’s needs, “other related activities” is used to capture the products of that creativity. Determining what these “other related activities” are require review and are fact-sensitive.”
Value of Contracts
N.J.A.C. 19:70-3.2 outlines the requirements to determine the value of contracts, including multi-year contracts. The regulations state that the contract value is the total estimated value of the contract.
For a multi-year contract, the contract value is calculated by multiplying the number of base years (excluding renewal terms) times the yearly amount of the contract. If multiple contracts are to be awarded through a single procurement process, the contracting unit must determine the total estimated contract value by adding together the estimated value of each contract.
For cooperative purchasing systems, the contract value shall be based on the estimated quantities to be purchased submitted by registered members and projected use(s) based on prior purchases.
For concession agreements, the contract value shall be based on the estimated revenue to be earned by the concessionaire for the base term of the contract.
If an extension, amendment or change order meets the pre-advertisement or post-award review threshold notice is required.
We suggest that you review the adopted rules with your procurement official, administrator, and attorney.
Contact: Lori Buckelew, Deputy Executive Director, lbuckelew@njlm.org, 609-695-3481, x112.