Committee releases A4586 to address procurement disparities after split testimony on enforcement and capacity

Chairwoman Sumter on the Community Development and Affairs Committee moved and won committee approval to release Assembly Bill A4586, the Minority and Women-Owned Businesses State Contractor Remedies Act, after nearly two hours of testimony that highlighted clashes over enforceability, industry capacity and operational barriers.

Supporters and business groups alike described the disparity study — which examined more than 240,000 contracts across more than 60 state agencies from 2015 to 2020 — as evidence that minority- and women-owned businesses have been underutilized in state procurement. John Harmon of the African American Chamber of Commerce of New Jersey said the study showed "egregious" shortfalls and urged stronger enforcement tools, including liquidated damages and clawbacks, citing utilization rates of 0.53% for Black-owned firms, 2.42% for Asian firms and 1.29% for Hispanic firms in the 2015–2020 review.

"Without enforceable mechanisms such as clawbacks, this bill in its current form will not move the needle," Harmon said, pointing to New York's MWBE program as a model that produced roughly 32.3% utilization in fiscal 2022–23.

Industry witnesses testified to operational constraints that they said limit the practical impact of participation goals. TJ Mann of the American Council of Engineering Companies of New Jersey said the state lacks a sufficient number of minority- and women-owned engineering firms to meet the bill's participation targets and warned of potential liability for prime firms that cannot meet goals despite good-faith efforts. "We must respectfully oppose the bill at this time," he said.

Ryan Sharp of the Utility and Transportation Contractors Association of New Jersey described capital, bonding and the state's low-bid procurement practices as core obstacles for smaller firms. He said bidding and performance on public works projects require substantial equipment, insurance and lines of credit and warned that expanding requirements could slow delivery of infrastructure. "Addressing barriers to access to capital, and not just setting goals, is key," Sharp told the committee.

Other witnesses recommended operational fixes to accompany any statutory goals. Marjorie Perry, president and CEO of MZM Management, urged lawmakers to address Division of Property, Maintenance and Construction (DPMC) vetting and bonding rules, noting that bond-aggregate reductions can effectively bar small firms from many state contracts. Perry said the bills should include measurable KPIs and changes to DPMC procedures to make certification and performance feasible.

Chairwoman Sumter said the amendment adds "state contracting unit" language and includes continued study to refine remedies. She read an Office of Legislative Services opinion explaining that certain enforcement mechanisms, such as set-asides and some liquidated-damage approaches, face constitutional limitations following recent case law and court decisions about race-based set-asides. As a result, the package focuses on agency-level remedies and data-driven adjustments rather than immediate mandatory set-asides.

After debate the committee voted to release A4586 as amended. The vote was recorded on the committee roll call and the bill was released for further legislative consideration.