N.J. Admin. Code § 17:49-6.7

Current through Register Vol. 56, No. 23, December 2, 2024

Section 17:49-6.7 - Construction contract standards and account requirements

(a) Any construction contract shall meet NJ Uniform Construction Code (UCC) requirements for all construction and applicable environmental permitting requirements and include the following minimum building maintenance standards and building maintenance benchmarks, including long-range maintenance plan requirements:

1. The performance of a Baseline Facility Condition Assessment at the close of construction, including: identification of the facility, facility size and dimensions, date of construction, type of construction, intended functional use, number of floors, an evaluation of all systems, equipment, and other components of a facility, organized by individual component or item, and identification of the facility, facility size and dimensions, date of construction, type of construction, intended functional use, and number of floors;

2. Current replacement value estimating the scope of items that may need to be repaired, renovated, or replaced during any operating and maintenance lease term, including, but not limited to, physical systems, basic building components, and/or major appliances or equipment;

3. Financial assessment including an analysis of reserve accounts, an estimate of cost of capital repairs annually, rate of return on reserve accounts, and project interest;

4. Building system and component life cycle data analysis organized by specific building component, planned/estimated useful life/lifecycle, unit cost, quantity relative to each component, and unit cost per item, linear foot, square foot, or other unit of measure;

5. Capital Reserve Draw Schedule for replacement expenditures, including timing of replacement of components, number of building components being replaced, and planned disbursements from the reserve account to cover such replacements;

6. Reserve fund account analysis and availability including a summary of current reserve account balance, projected account funding, rate of investment returns, planned capital expenditures and withdrawals, and projected ending annual reserve account balance; and

7. Posting of a performance bond to ensure the completion of the project and a payment bond guaranteeing prompt payment of moneys in accordance with, and conforming to, the requirements of N.J.S.A. 2A:44-143et seq.

(b) Upon approval by the State Treasurer, but prior to commencing work on a project, the local government unit shall require a private entity to:

1. Establish a construction account and appoint a third-party financial institution, which shall be pre-qualified by the State Treasurer pursuant to Subchapter 2, to act as a collateral agent, and manage the construction account.

i. The construction account shall include the funding and financial instruments that shall be used to fully capitalize and fund the project.

ii. The collateral agent shall maintain a full accounting of the funds and instruments in the account.

iii. The funds and instruments in the construction account shall be held in trust for the benefit of the contractor, construction manager, and design-build team involved in the project.

iv. The funds and instruments in the construction account shall not be the property of the private entity unless all amounts due to the construction account beneficiaries are paid in full.

v. The construction account shall not be designated for more than one project.

N.J. Admin. Code § 17:49-6.7

Adopted by 52 N.J.R. 898(a), effective 4/20/2020