N.J. Stat. § 2A:44-136
If the contractor or person in interest shall fail to file with the financial officer of the public agency, within the time prescribed by notice under section 2A:44-135 of this title, a statement duly verified, that the lien claim is unfounded and untrue, specifying in what respects the same is unfounded and untrue, the public agency may pay, without the order of any court, the claim out of the funds in its possession upon which the claimant has a lien. When payment is so made the public agency shall not be obliged to pay the same to the contractor but shall be entitled to credit upon the contract for the amount so paid. Nothing in this article contained shall impair the right of the priority of the claim or lien of a laborer as between the right of the laborer and a claimant or other person entitled to a lien.
N.J.S. § 2A:44-136