Lopez, McKnight & Karabinchak Bill to Aid Non-Profits Unable to Deliver on State Contract Requirements Due to Covid-19 Pandemic Now Law

(Trenton) – To give greater flexibility to non-profit organizations unable to fulfill the terms and conditions of their public contracts or agreements, legislation was signed into law Monday by the Governor.

The new law allows State agencies to provide waivers of contract penalties and to modify contract terms in the event a non-profit is unable to perform as a result of the public health and state of emergency declarations under Executive Order No. 103 of 2020.

Under the law (formerly bill A-3996), non-profit organizations will need to submit supporting documentation and will be awarded waivers as deemed feasible and appropriate. A non-profit will also be permitted to request modification of the terms and conditions of their public contract with a State agency. Provisions of the legislation will apply for failures occurring during the period of emergency and within the six months immediately following its end.

Sponsors of the bill Assembly Democrats Yvonne Lopez (D-Middlesex), Angela McKnight (D-Hudson), and Robert Karabinchak (D-Middlesex) issued the following joint statement:

“Our non-profits are no strangers to the difficulties the current state of emergency has presented. Together these organizations are reeling from the impact on their finances, fundraising events, and ability to deliver programs. Despite challenges, they continue to stretch resources for the vulnerable populations they serve at a time when demand is rising significantly, and need is more critical.

“Providing more flexibility under this new law will give some much-needed breathing room so that countless non-profits can get back to the work of helping others. It will ensure those able to safely serve their communities can continue to do so, and that strategies and servicing priorities can be adapted to meet the growing and evolving needs of our communities as they stand today.”

The new law will only apply to State-level agencies, its subdivisions, and any independent State-level authority, commission, or instrumentality. It will not apply to counties or municipalities.