New bid thresholds for various New Jersey public entities took effect on July 1, 2025. Contracting Units are advised to review their procurement policies and implementing ordinances or resolutions to determine if any changes are necessary. Corporate governance principles can help public entities establish proper oversight and compliance procedures for procurement activities.
Adjustments to New Jersey Public Bidding Thresholds
Unless certain exceptions apply, all contracts for the procurement of goods or services by municipalities that in the aggregate exceed the bid threshold must be awarded through the public bidding process set forth in the Local Public Contracts Law (LPCL).
The law requires the State Treasurer to adjust the minimum bid threshold every five years based on the index rate. On July 7, 2025, the Division of Local Government Services issued Local Finance Notice 2025-08, which addresses the new minimum bid thresholds that took effect on July 1, 2025.
Contracting units that have appointed a Qualified Purchasing Agent see an increase. This applies to units under the LPCL or Public School Contracts Law (PSCL). The maximum bid threshold has increased from $44,000 to $53,000.
Contracting units governed by the LPCL without a Qualified Purchasing Agent have different rules. The maximum bid threshold remains $17,500 for these units.
For contracting units subject to the PSCL that do not have a Qualified Purchasing Agent, there is an increase. The maximum bid threshold has been increased from $32,000 to $39,000.
The DLGS guidance
The DLGS guidance provides additional information about quotation thresholds. Due to the increased bid threshold, the 15 percent threshold for the informal receipt of quotations also changes. This affects both the LPCL and PSCL thresholds.The LFN provided the following chart to summarize the changes:
Bid Threshold
Quotation Threshold
LPCL Units without QPAs
$17,500
$2,625
PSCL Units without QPAs
$39,000
$5,850
LPCL & PSCL Units with QPAs
$53,000
$7,950
The DLGS notice also reminds New Jersey municipalities that political contribution threshold (pay-to-play) of $17,500 remains in place. Accordingly, all procurement over $17,500 and less than agency’s new, higher bid threshold are subject to those laws. Construction law considerations become important for public entities managing construction projects under these bidding requirements.
While local contracting units still have the option to set their bid thresholds at a lower amount, those who seek to take advantage of the increase should review their applicable policies and procedures to make sure the adjustment is reflected.
Where the contracting unit has set fixed amounts, the contracting unit should be sure to adjust the bid and quotation threshold amounts. The changes should also be reflected if resolutions appointing a qualified purchasing agent used fixed threshold amounts. Commercial real estate law expertise helps public entities handle disputes that may arise from procurement and contracting processes.
Adjustment of Reporting Thresholds to the Office of the State Comptroller
Local Finance Notice 2025-08 also addresses adjustments to the threshold amounts set forth in N.J.S.A 52:15C-10 (a) and (b), which mandates written notification to the State Comptroller of certain contracts.
Effective July 1, 2025, contracting units should notify the Office of the State Comptroller when contracts meet or exceed the following terms:
• For contracts involving consideration or an expenditure of more than $3 million, but less than $15.2 million, notification is required no later than 20 business days after the contract award.
• For contracts involving an expenditure of $15.2 million or more, notification timing is more complex. Units must notify at the earliest time practicable as they commence the procurement process. This must be no later than when the unit begins preparation of any bid specification or request for proposal. The same applies to concession offerings, proposals to purchase, sell, or lease real estate, or other related activities and contracts. In all cases, notification must occur not less than 30 days prior to public advertisement or other public or private solicitation.
• For contracts issued pursuant to an emergency or public exigency involving consideration or an expenditure of more than $3 million, notification is required no later than 30 business days after the award of a contract.
How We Can Help
To take advantage of the statutorily increased thresholds, New Jersey municipalities and school boards should review their policies and procedures. This review will help determine whether they need to take any action to increase their bid thresholds.
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