PARSIPPANY — The Township of Parsippany-Troy Hills violated New Jersey procurement laws by paying a contractor nearly $1.3 million for renovations to the municipally owned Knoll Country Club without seeking competitive bids, according to a report from the New Jersey Office of the State Comptroller (OSC). The renovations occurred under an improperly used “emergency” exception to bypass the public bidding process during the COVID-19 pandemic.
The investigation by OSC, prompted by an anonymous tip, found that the repairs and renovations conducted in 2020 and 2021 did not qualify as emergencies. Despite claims of mold and water damage, which the Township cited as justifications for the emergency contract, the OSC found no imminent risks to public health and safety, especially since the building was closed to the public.
In one particularly pointed exchange, Parsippany’s then-business Administrator forwarded several new invoices for emergency work in the bar and grill room to the General Manager, and asked, “How does the removal of the Bar constitute an emergency, unless it is slowing up happy hour?”
The OSC report emphasized that procurement laws, such as the Local Public Contracts Law (LCPL), are in place to ensure transparency, foster competition, and safeguard taxpayer funds. Parsippany failed to document the need for emergency contracts, bypassed public bidding requirements and did not secure proper approvals from the Township Council or Business Administrator, as required by law.
Mayor James Barberio, who was not in office then, acknowledged the OSC’s findings and emphasized that the current administration is taking steps to correct the issues. “The Office of the State Comptroller (OSC) conducted a very thorough investigation into emergency procurements made during a prior Administration at the Knoll West Country Club between 2020 and 2021. The Township fully cooperated and assisted the OSC, and we thank Comptroller Walsh for bringing this incident to our attention,” Barberio said.
He continued, “While I was not in the office at the time, and although remediation and reconstruction of the Knoll West may have been necessary, the Comptroller’s report makes it clear that the use of emergency procurement procedures under the New Jersey Local Public Contracts Law’s fact-specific requirements was not justified.”
Barberio further assured the public that none of the individuals involved in the improper procurement process are currently employed by the Township, adding, “We are correcting these issues by ensuring there is a team in place who understands that public confidence in the integrity of local government is of paramount importance. None of the individuals involved in the Knoll West failure to comply are currently employed by the Township, and we have a different Mayor, Business Administrator, Chief Financial Officer, Purchasing Director, Assistant QPA, Golf General Manager, and Township Attorney.”
To prevent similar incidents in the future, Barberio has directed key township officials to update procurement policies and conduct comprehensive training. “To ensure rules and guidelines are followed in the future, I have instructed the Business Administrator, Chief Financial Officer, and Director of Purchasing/QPA to update the Township Purchasing Manual to implement robust policies, procedures, and internal controls. Our Business Administrator, Jamie Cryan, and new Director of Purchasing/QPA, who not only teaches classes at Rutgers University on NJ procurement procedures, but also developed the curriculum for Principles of Public Purchasing I, II, and III, Introduction to Public Purchasing, and Green Product Purchasing, will be conducting comprehensive trainings with Department and Division Heads to ensure that the Township is going beyond the basic steps to safeguard public funds,” Barberio concluded.
In light of the findings in this report, OSC makes the following recommendations to help ensure Parsippany adheres to applicable procurement laws and properly spends taxpayer dollars in the future. These recommendations reflect procurement best practices that should be adhered to by all New Jersey municipalities:
- Parsippany should draft and update specific policies, practices, and procedures for the approval and documentation of emergency procurements under the Local Public Contracts Law. Parsippany should also train staff who may perform these functions on the proper processes for doing so to ensure that the violations of the law discussed in this report are not repeated.
Parsippany, for its part, acknowledged the deficiencies identified through this investigation and represented that it will update and implement “robust policies, procedures, and internal controls.” It also stated that it would conduct “comprehensive training with Department and Division Heads to ensure rules and guidelines are followed.” Parsippany should act expeditiously in instituting these changes. - Parsippany must adhere to the public bidding requirements of the Local Public Contracts Law before awarding contracts governed by that law to foster competition and benefit from potential cost savings. The use of exceptions to bidding public should be strictly limited to the narrow circumstances to which they apply.
- Parsippany should promptly obtain written emergency certifications and adopt public resolutions authorizing emergency contracts and procurements as soon as practicable and before payment of any associated invoices.
The OSC’s report also pointed out that had the Township followed proper bidding procedures, it might have received more competitive pricing. For two other projects at the golf club that went through public bidding, multiple proposals at varying prices were received, highlighting the benefits of competition.
