The government procurement process is designed to foster competition and create a level playing field in the award of government contracts. As part of that commitment, the State of New Jersey has a small business set-aside program with the goal of awarding 25 percent of state contracting and purchase order dollars to small businesses. Many counties, municipalities and school boards also have set-aside goals for small businesses. These set-aside goals are designed to provide a benefit to the taxpayers by encouraging more companies to compete for government contracts.
To be eligible for New Jersey’s small business set-aside program, a business must have its principal place of business in New Jersey and must have no more than 100 permanent employees. New Jersey’s set-aside goals apply to both prime contractors and subcontractors. Thus, if a small business does not have the experience to qualify as a prime contractor, the small business may want to explore opportunities to serve as a subcontractor on a government contract.
Any company that wants to do business with the state must have a valid Business Registration Certificate from the Department of Treasury, Division of Revenue prior to conducting business in New Jersey and prior to being awarded a government contract. This requirement applies to both prime contractors and subcontractors. The lack of a valid Business Registration Certificate will cause a bid to be rejected.
In addition to obtaining a Business Registration Certificate from the State of New Jersey, small businesses must also register with the Division of Revenue, Small Business Enterprise Unit. The best practice is for a small business to register with the Small Business Enterprise Unit prior to considering government contracting as part of its business plan. If, however, a small business is not registered with the Small Business Enterprise Unit, the business may still compete for a particular government contract, provided the small business registers with the Small Business Enterprise Unit on or before the date on which a particular bid or bid proposal is due.
To successfully compete for government contracts, small businesses must not only become familiar with the procurement process, but must also become familiar with the specifications for each and every procurement opportunity for which they plan to compete. Small businesses should also familiarize themselves with New Jersey’s pay-to-play restrictions.
If a small businesses is even thinking about participating in the procurement process, the company should develop a business plan specific to the company’s procurement goals to make sure that the company is ready to effectively compete when the right opportunities arise.
About the Author: Rebecca Moll Freed, counsel at Genova Burns Giantomasi Webster, focuses her practice on public contract law, corporate political activity law, non-profit and tax exempt organizations, and bid protest litigation. She may be reached at firstname.lastname@example.org.