NJ S275

State departments must prepare a cost analysis before entering contracts over $100,000 with private entities for work typically performed by state employees, determining whether privatization results in substantial cost savings.

Cost analysis must include labor costs, fringe benefits, equipment/materials, transition costs, contract administration/inspection costs, and anticipated unemployment compensation for displaced workers.

Departments cannot contract with private entities if any company principal or management employee worked for that department in the preceding two years in a capacity affecting the contracted work.

Cost analyses must be filed with the Office of Management and Budget, made publicly available, and transmitted to Senate and Assembly committees plus affected bargaining unit representatives, who have 20 business days to respond.

Even when cost analysis favors using state employees, departments may contract out work if employees lack required expertise, skills, or technology access—but must wait 30 business days, during which the Legislature may act to prevent the contract.