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| THE GENERAL ASSEMBLY OF PENNSYLVANIA |
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| SENATE BILL |
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| INTRODUCED BY FOLMER, EICHELBERGER, KASUNIC, GORDNER, BOSCOLA, ORIE, RAFFERTY, YAW, M. WHITE, D. WHITE, ERICKSON, BAKER, BRUBAKER, GREENLEAF, SMUCKER, EARLL, WAUGH, FERLO, ROBBINS, VANCE, ALLOWAY, SCARNATI, McILHINNEY AND PICCOLA, JANUARY 26, 2011 |
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| REFERRED TO LOCAL GOVERNMENT, JANUARY 26, 2011 |
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| AN ACT |
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1 | Amending the act of February 1, 1966 (1965 P.L.1656, No.581), |
2 | entitled "An act concerning boroughs, and revising, amending |
3 | and consolidating the law relating to boroughs," further |
4 | providing for regulation of contracts, for evasion of |
5 | advertising requirements and for certain purchase contracts. |
6 | The General Assembly of the Commonwealth of Pennsylvania |
7 | hereby enacts as follows: |
8 | Section 1. Section 1402(a), (a.1) and (d) of the act of |
9 | February 1, 1966 (1965 P.L.1656, No.581), known as The Borough |
10 | Code, amended or added July 10, 1990 (P.L.383, No.90), December |
11 | 18, 1996 (P.L.1141, No.171), December 18, 1996 (P.L.1156, No. |
12 | 176), December 20, 1996 (P.L.1497, No.193) and October 27, 2010 |
13 | (P.L. , No.87), are amended and the section is amended by |
14 | adding a subsection to read: |
15 | Section 1402. Regulation of Contracts.--(a) All contracts |
16 | or purchases in excess of [ten thousand dollars ($10,000)] |
17 | twenty-five thousand dollars ($25,000) subject to adjustment |
18 | under subsection (a.2), except those hereinafter mentioned, |
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1 | shall not be made except with and from the lowest responsible |
2 | bidder after due notice in one newspaper of general circulation |
3 | in the borough, at least two times at intervals of not less than |
4 | three days where daily newspapers of general circulation are |
5 | available for such publication, in case of weekly newspapers, |
6 | such notice once a week for two successive weeks. The first |
7 | advertisement shall be published not more than forty-five days |
8 | and the second advertisement not less than ten days prior to the |
9 | date fixed for the opening of bids. Advertisements for contracts |
10 | or purchases shall also be posted in a conspicuous place within |
11 | the borough. Advertisements for contracts and purchases shall |
12 | contain the date, time and location for opening of bids and |
13 | shall state the amount of the performance bond determined under |
14 | subsection (c). The amount of the contract shall in all cases, |
15 | whether of straight sale price, conditional sale, bailment |
16 | lease, or otherwise, be the entire amount which the borough pays |
17 | to the successful bidder or his assigns in order to obtain the |
18 | services or property, or both, and shall not be construed to |
19 | mean only the amount which is paid to acquire title or to |
20 | receive any other particular benefit or benefits of the whole |
21 | bargain. In awarding contracts, council shall have the right to |
22 | take into consideration such other factors as the availability, |
23 | cost and quality of service. |
24 | (a.1) Written or telephonic price quotations from at least |
25 | three qualified and responsible contractors shall be requested |
26 | for all contracts that exceed [four thousand dollars ($4,000)] |
27 | seven thousand dollars ($7,000) subject to adjustment under |
28 | subsection (a.2) but are less than the amount requiring |
29 | advertisement and competitive bidding or, in lieu of price |
30 | quotations, a memorandum shall be kept on file showing that |
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1 | fewer than three qualified contractors exist in the market area |
2 | within which it is practicable to obtain quotations. A written |
3 | record of telephonic price quotations shall be made and shall |
4 | contain at least the date of the quotation, the name of the |
5 | contractor and the contractor's representative, the |
6 | construction, reconstruction, repair, maintenance or work which |
7 | was the subject of the quotation and the price. Written price |
8 | quotations, written records of telephonic price quotations and |
9 | memoranda shall be retained for a period of three years. |
10 | (a.2) (1) Every five years, beginning with the year in |
11 | which this subsection becomes applicable to contracts and |
12 | purchases, the Department of Labor and Industry shall calculate |
13 | the average percentage change in the Consumer Price Index for |
14 | All Urban Consumers (CPI-U) for the United States city average |
15 | for all items as published by the United States Department of |
16 | Labor, Bureau of Labor Statistics, for the preceding five-year |
17 | period. |
18 | (2) The amount at which competitive bidding is required |
19 | under subsection (a) and the amount at which written or |
20 | telephonic price quotations are required under subsection (a.1) |
21 | shall be adjusted every five years as follows: |
22 | (i) In the case of competitive bidding, the positive |
23 | percentage change, as determined in accordance with clause (1), |
24 | shall be multiplied by the amount applicable under subsection |
25 | (a) for the current five-year period and the product thereof |
26 | shall be added to the amount applicable under subsection (a) for |
27 | the current five-year period, with the result rounded to the |
28 | nearest multiple of one hundred dollars ($100). |
29 | (ii) In the case of written or telephonic price quotations, |
30 | the positive percentage change, as determined in accordance with |
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1 | clause (1), shall be multiplied by the amount applicable under |
2 | subsection (a.1) for the current five-year period and the |
3 | product thereof shall be added to the amount applicable under |
4 | subsection (a.1) for the current five-year period, with the |
5 | result rounded to the nearest multiple of one hundred dollars |
6 | ($100). |
7 | (3) The determination required under clause (1) and the |
8 | calculation of the adjustments required under clause (2) shall |
9 | be made in the period between October 1 and November 15 of the |
10 | year following the effective date of this subsection, and |
11 | between October 1 and November 15 of each successive year. |
12 | (4) The adjusted amounts obtained in accordance with clause |
13 | (2) shall become effective January 1 for the five-year period |
14 | following the year in which the determination required under |
15 | clause (1) is made. |
16 | (5) The Department of Labor and Industry shall give notice |
17 | in the Pennsylvania Bulletin prior to January 1 of each calendar |
18 | year in which the percentage change determined in accordance |
19 | with clause (1) and the amounts, whether adjusted or unadjusted |
20 | in accordance with clause (2), at which competitive bidding is |
21 | required under subsection (a) and written or telephonic price |
22 | quotations are required under subsection (a.1) for the five-year |
23 | period beginning the first day of January after publication of |
24 | the notice. |
25 | |
26 | * * * |
27 | (d) The contracts or purchases made by council, which shall |
28 | not require advertising, bidding or price quotations as |
29 | hereinbefore provided, are as follows: |
30 | (1) Those for maintenance, repairs or replacements for |
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1 | water, electric light or public works of the borough, provided |
2 | they do not constitute new additions, extensions or enlargements |
3 | of existing facilities and equipment, but a bond may be required |
4 | by council, as in other cases of work done; |
5 | (2) Those made for improvements, repairs and maintenance of |
6 | any kind, made or provided by any borough, through its own |
7 | employes: Provided, That all materials used for street |
8 | improvement, maintenance and/or construction in excess of [four |
9 | thousand dollars ($4,000)] the amount specified or adjusted |
10 | under subsection (a.1) be subject to the relevant price |
11 | quotation or advertising requirements contained herein; |
12 | (3) Those where particular types, models or pieces of new |
13 | equipment, articles, apparatus, appliances, vehicles or parts |
14 | thereof are desired by council, which are patented and |
15 | manufactured or copyrighted products; |
16 | (3.1) Those for used equipment, articles, apparatus, |
17 | appliances, vehicles or parts thereof being purchased from a |
18 | public utility. |
19 | (4) Those involving any policies of insurance or surety |
20 | company bonds; those made for public utility service under |
21 | tariffs on file with the Pennsylvania Public Utility Commission; |
22 | those made with another political subdivision, or a county, the |
23 | Commonwealth of Pennsylvania, the Federal Government, any agency |
24 | of the Commonwealth or the Federal Government, or any municipal |
25 | authority, including the sale, leasing or loan of any supplies |
26 | or materials by the Commonwealth or the Federal Government or |
27 | their agencies. The price thereof shall not be in excess of that |
28 | fixed by the Commonwealth, the Federal Government, or their |
29 | agencies; |
30 | (5) Those involving personal or professional services. |
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1 | (6) Those made relating to the purchase of electricity and |
2 | associated energy and related services by a borough owning or |
3 | operating electric generation or distribution facilities on the |
4 | effective date of this section with any of the following: |
5 | (i) A political subdivision. |
6 | (ii) Another state. |
7 | (iii) The Commonwealth or an agency thereof. |
8 | (iv) The Federal Government. |
9 | (v) A private corporation. |
10 | (vi) An electric cooperative corporation under 15 Pa.C.S. |
11 | Ch. 73 (relating to electric cooperative corporations). |
12 | (vii) A non-profit membership corporation. As used in this |
13 | subclause, the term "non-profit membership corporation" means an |
14 | entity, the membership of which: |
15 | (A) consists solely of Pennsylvania boroughs, such as a |
16 | consortium, buying group or municipal power agency under section |
17 | 2471.2; or |
18 | (B) consists of Pennsylvania boroughs and political |
19 | subdivisions of another state or states. |
20 | (viii) An electric cooperative of another state. |
21 | Nothing in this clause shall prohibit council from engaging in |
22 | advertising, bidding or price quotations if the council |
23 | determines that the advertising, bidding or price quotations are |
24 | in the public interest. |
25 | * * * |
26 | Section 2. Sections 1403(a) and 1405 of the act, amended |
27 | July 10, 1990 (P.L.383, No.90), are amended to read: |
28 | Section 1403. Evasion of Advertising Requirements.--(a) No |
29 | member or members of council shall evade the provisions of |
30 | section 1402 hereof as to advertising for bids, by purchasing or |
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1 | contracting for services and personal properties piecemeal for |
2 | the purpose of obtaining prices under [ten thousand dollars |
3 | ($10,000)] the amount specified or adjusted under section |
4 | 1402(a) upon transactions, which transactions should, in the |
5 | exercise of reasonable discretion and prudence, be conducted as |
6 | one transaction amounting to more than [ten thousand dollars |
7 | ($10,000)] the amount specified or adjusted under section |
8 | 1402(a). This provision is intended to make unlawful the evading |
9 | of advertising requirements by making a series of purchases or |
10 | contracts, each for less than the advertising requirement price, |
11 | or by making several simultaneous purchases or contracts, each |
12 | below said price, when, in either case, the transactions |
13 | involved should have been made as one transaction for one price. |
14 | Any members of council who so vote in violation of this |
15 | provision and who know that the transaction upon which they so |
16 | vote is or ought to be a part of a larger transaction and that |
17 | it is being divided in order to evade the requirements as to |
18 | advertising for bids, shall be jointly and severally subject to |
19 | surcharge for ten percent of the full amount of the contract or |
20 | purchase. Whenever it shall appear that a member of council may |
21 | have voted in violation of this section but the purchase or |
22 | contract on which he so voted was not approved by council, this |
23 | section shall be inapplicable. |
24 | * * * |
25 | Section 1405. Separate Bids for Plumbing, Heating, |
26 | Ventilating and Electrical Work.--In the preparation for the |
27 | erection, construction and alteration of any public building, |
28 | when the entire cost of such work shall exceed [ten thousand |
29 | dollars ($10,000)] the amount specified or adjusted under |
30 | section 1402(a), the architect, engineer, or other person |
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1 | preparing such specifications may, if so requested by the |
2 | borough council, prepare separate specifications for the |
3 | plumbing, heating, ventilating and electrical work. The person |
4 | or persons authorized to enter into contracts for the erection, |
5 | construction or alteration of such public buildings may, if such |
6 | separate specifications shall have been proposed, receive |
7 | separate bids upon each of the said branches of work and shall |
8 | thereupon award the contract for the same to the lowest |
9 | responsible bidder for each of said branches. |
10 | Section 3. This act shall apply to contracts and purchases |
11 | advertised after December 31 of the year in which this section |
12 | takes effect. |
13 | Section 4. This act shall take effect immediately. |
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