If you are a contractor bidding on public projects in New Jersey, a recent NJ case sheds light on an aggregate rating requirement which, if violated, could cause your bid to be disqualified.
What Are Aggregate Rating Requirements Under NJ Law?
Most NJ contractors who bid on public projects are aware that their company’s “Aggregate rating” refers to “the limit of the dollar value of all contracts, public and private, that a firm may perform at any given time.” [insert link] Importantly, “[a] firm shall not be awarded a contract which, when added to the backlog of uncompleted construction work …[the value of which] would exceed the firm’s aggregate rating.” But are subcontractors considered “firms” that will be held to the “aggregate rating” requirements set forth in the regulation? That answer is a resounding “yes,” according to the recent NJ Superior Court Appellate Case.
If Your Subcontractor’s Aggregate Rating Limit Would Be Exceeded Upon Award of the Contract, Your Bid Could Be Disqualified
Recently, the Superior Court of New Jersey, Appellate Division, rejected a contractor’s claim that its subcontractor was exempt from the aggregate rating requirements discussed above.
The recent decision means that prudent contractors must pay attention to their subcontractor’s ratings to insure that the aggregate limit will not run afoul of the legal guidelines.
Impact Moving Forward
In light of the Court’s decision, contractors bidding on public projects should be diligent in ensuring that their subcontractors rating limits will not throw off the aggregate rating calculation upon award of the subcontract. Contractors should be aware that such violations may cause their bids to be disqualified. In turn, subcontractors should also take precautions to avoid liability for errors which cause bids to be rejected, and the potential for resulting claims for damages.