THE GENERAL ASSEMBLY OF PENNSYLVANIA

HOUSE BILL

INTRODUCED BY M. K. KELLER, AUMENT, BAKER, BEAR, BENNINGHOFF, BLOOM, BOBACK, BOYD, BROOKS, CAUSER, CHRISTIANA, CLYMER, COX, CREIGHTON, CUTLER, DELOZIER, DENLINGER, ELLIS, EVERETT, FARRY, FLECK, GABLER, GEIST, GILLESPIE, GINGRICH, GRELL, GROVE, HALUSKA, HARHART, HARPER, HARRIS, HELM, HENNESSEY, HESS, HICKERNELL, KAUFFMAN, KILLION, KNOWLES, MAJOR, MARSHALL, MARSICO, MASSER, METCALFE, MILLARD, MILLER, MOUL, OBERLANDER, O'NEILL, PAYNE, PEIFER, PERRY, PICKETT, PYLE, QUIGLEY, QUINN, RAPP, REED, REICHLEY, ROAE, ROCK, ROSS, SAYLOR, SCAVELLO, CULVER, SCHRODER, SIMMONS, SONNEY, STERN, STEVENSON, SWANGER, TALLMAN, TOBASH, TRUITT, TURZAI, VEREB, VULAKOVICH, WATSON AND F. KELLER, JANUARY 27, 2011

AS REPORTED FROM COMMITTEE ON LOCAL GOVERNMENT, HOUSE OF REPRESENTATIVES, AS AMENDED, APRIL 5, 2011   

AN ACT

Amending the act of July 28, 1953 (P.L.723, No.230), entitled,

as amended, "An act relating to counties of the second class

and second class A; amending, revising, consolidating and

changing the laws relating thereto," in preliminary

provisions, providing for adjustments based on Consumer Price

Index relating to contracts and purchases; in contracts,

further regulating contracts and purchases; and, in grounds,

property and buildings, further providing for competition in

award of contracts.

The General Assembly of the Commonwealth of Pennsylvania

hereby enacts as follows:

Section 1.  The act of July 28, 1953 (P.L.723, No.230), known

as the Second Class County Code, is amended by adding a section

to read:

Section 112.  Adjustments Based on Change in Consumer Price

Index.--(a)  Annually, beginning with the year in which this

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subsection becomes applicable to contracts and purchases, the

Department of Labor and Industry shall calculate the percentage

change in the Consumer Price Index for All Urban Consumers (CPI-

U) for the United States city average for all items as published

by the United States Department of Labor, Bureau of Labor

Statistics, for the twelve-month average ending in September of

the prior year.

(b)  The amounts at which competitive bidding, separate bids

and written or telephonic price quotations are required under

this act shall be adjusted annually. The positive percentage

change, as determined in accordance with subsection (a), shall

be multiplied by the applicable amount for the current year and

the product thereof shall be added to the applicable amount for

the current year, with the result rounded to the nearest

multiple of ten dollars ($10).

(c)  The annual determination required under subsection (a)

and the calculation of the adjustments required under subsection

(b) shall be made in the period between October 1 and November

15 of the year following the effective date of this section, and

annually between October 1 and November 15 of each successive

year.

(d)  The adjusted amounts obtained in accordance with

subsection (b) shall become effective January 1 for the calendar

year following the year in which the determination required

under subsection (a) is made.

(e)  The Department of Labor and Industry shall give notice

in the Pennsylvania Bulletin prior to January 1 of each calendar

year of the annual percentage change determined in accordance

with subsection (a) and the amounts, whether adjusted or

unadjusted in accordance with subsection (b), at which

competitive bidding, separate bids and written or telephonic

price quotations are required under this act for the calendar

year beginning the first day of January after publication of the

notice. Adjustments to the base amounts specified under sections

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2001(a) and (d), 2517(a) and 2511-A(a), (b), (b.1) and (h) shall

be made as follows:

(1)  The Department of Labor and Industry shall determine the

percentage change in the All Items Consumer Price Index for All

Urban Consumers (CPI-U) for the United States City Average as

published by the United States Department of Labor, Bureau of

Labor Statistics for the twelve-month period ending September 30

of the calendar year in which this subsection becomes effective,

and for each successive twelve-month period thereafter.

(2)  If the department determines that there is no positive

percentage change, then no adjustment to the base amounts shall

occur for the relevant time period provided for in this

subsection.

(3)  (i)  If the department determines that there is a

positive percentage change in the first year that the

determination is made under paragraph (1), the positive

percentage change shall be multiplied by each base amount and

the products shall be added to the base amounts, respectively,

and the sums shall be preliminary adjusted amounts.

(ii)  The preliminary adjusted amounts shall be rounded to

the nearest one thousand dollars ($1,000), to determine the

final adjusted base amounts for purposes of sections 2001(a) and

(d), 2517(a) and 2511-A(a), (b), (b.1) and (h).

(4)  In each successive year in which there is a positive

percentage change in the CPI-U for the United States City

Average, the positive percentage change shall be multiplied by

the most recent preliminary adjusted amounts and the products

shall be added to the most recent preliminary adjusted amounts,

respectively. The sums thereof shall be rounded to the nearest

one thousand dollars ($1,000) to determine the new final

adjusted base amounts for purposes of sections 2001(a) and (d),

2517(a) and 2511-A(a), (b), (b.1) and (h).

(5)  The determinations and adjustments required under this

subsection shall be made in the period between October 1 and

November 15 of the year following the effective date of this

subsection, and annually between October 1 and November 15 of

each year thereafter.

(6)  The final adjusted base amounts and new final adjusted

base amounts obtained under paragraphs (3) and (4) shall become

effective January 1 for the calendar year following the year in

which the determination required under paragraph (1) is made.

(7)  The department shall publish notice in the Pennsylvania

Bulletin prior to January 1 of each calendar year of the annual

percentage change determined under paragraph (1) and the

unadjusted or final adjusted base amounts determined under

paragraphs (3) and (4) for purposes of sections 2001(a) and (d),

2517(a) and 2511-A(a), (b), (b.1) and (h), respectively, for the

calendar year beginning the first day of January after

publication of the notice. The notice shall include a written

and illustrative explanation of the calculations performed by

the department in establishing the unadjusted or final adjusted

base amounts under this subsection for the ensuing calendar

year.

(b)  (Reserved).

Section 2.  Section 2001(a) and (d) of the act, amended

November 30, 2004 (P.L.1439, No.186), are amended to read:

Section 2001.  County Commissioners to Make Contracts.--The

County Commissioners may make contracts for lawful purposes and

for the purposes of carrying into execution the provisions of

this section and the laws of the Commonwealth.

(a)  Except as provided in subsection (a.1), all contracts or

purchases in excess of [ten thousand dollars ($10,000)] the base

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amount of twenty-five thousand dollars ($25,000), subject to

annual adjustment under section 112, shall be in writing and,

except those hereinafter mentioned and except as provided by the

act of October 27, 1979 (P.L.241, No.78), entitled "An act

authorizing political subdivisions, municipality authorities and

transportation authorities to enter into contracts for the

purchase of goods and the sale of real and personal property

where no bids are received," shall not be made except with and

from the lowest responsible and responsive bidder meeting

specifications, after due notice in at least one newspaper of

general circulation, published or circulating in the county at

least two (2) times, at intervals of not less than three (3)

days where daily newspapers of general circulation are employed

for such publication, or in case weekly newspapers are employed,

then the notice shall be published once a week for two (2)

successive weeks. The first advertisement shall be published not

less than ten (10) days prior to the date fixed for the opening

of bids.

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(d)  The contracts or purchases made by the commissioners

involving an expenditure [of over [ten thousand dollars

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($10,000)] in the excess of the base amount of twenty-five

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thousand dollars ($25,000), subject to annual adjustment under

section 112, which shall not require advertising or bidding as

hereinbefore provided are as follows:

(1)  Those for maintenance, repairs or replacements for

water, electric light, or other public works: Provided, That

they do not constitute new additions, extensions or enlargements

of existing facilities and equipment. Security may be required

by the county commissioners as in other cases of work done.

(2)  Those made for improvements, repairs and maintenance of

any kind made or provided by the county through its own

employes. This paragraph shall not apply to construction

materials used in a street improvement.

(3)  Those where particular types, models or pieces of new

equipment, articles, apparatus, appliances, vehicles or parts

thereof are desired by the county commissioners, which are

patented and manufactured products or copyrighted products.

(4)  Those involving any policies of insurance or surety

company bonds, those made for public utility service and

electricity, natural gas or telecommunication services:

Provided, That, in the case of utilities not under tariffs on

file with the Pennsylvania Public Utility Commission, contracts

made without advertising and bidding shall be made only after

receiving written or telephonic price quotations from at least

three (3) qualified and responsible contractors, or in lieu of

price quotations a memorandum shall be kept on file showing that

fewer than three (3) qualified contractors exist in the market

area within which it is practicable to obtain quotations. A

written record of telephonic price quotations shall be made and

contain at least the date of the quotation, the name of the

contractor and the contractor's representative.

(5)  Those involving personal or professional services,

including, but not limited to, services of members of the

medical or legal profession, registered architects, engineers,

certified public accountants or other personal services

involving professional expertise.

(6)  Those involving tangible client services provided by

nonprofit agencies. For the purposes of this clause, the term

"tangible client services" shall mean congregate meals, home-

delivered meals, transportation and chore services provided

through area agencies on aging.

(6.1)  Those involving contracts entered into by nonprofit

cooperative hospital service associations for hospitals and

nursing homes which are part of the institutional district or

which are owned by the county, operated by the county or

affiliated with the county by the purchasing of or participating

in contracts for materials, supplies and equipment.

(7)  Those involving the purchase of milk.

(8)  Those made with any public body, including, but not

limited to, the sale, lease or loan of any supplies or materials

to the county by a public body, provided that the price thereof

shall not be in excess of that fixed by the public body. The

requirements of 53 Pa.C.S. Ch. 23 Subch. A (relating to

intergovernmental cooperation) shall not apply when a county

purchases cooperatively with another public body which has

entered into a contract for supplies or materials. As used in

this paragraph, "public body" shall mean any of the following:

(i)  the Federal Government;

(ii)  the Commonwealth of Pennsylvania;

(iii)  any other state;

(iv)  a political subdivision, local or municipal authority

or other similar local entity of the Commonwealth or any other

state; or

(v)  an agency of the Federal Government, the Commonwealth or

any other state.

(9)  Those exclusively involving construction management

services.

(10)  Those involving computer software.

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Section 3.  Section 2517(a) of the act, amended December 9,

2002 (P.L.1383, No.170), is amended to read:

Section 2517.  Separate Specifications and Contracts for

Certain Items.--(a)  In the preparation of specifications for

the erection, construction and alteration of any public

building, when the entire cost of such work shall exceed [ten

thousand dollars ($10,000)] the base amount of twenty-five

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thousand dollars ($25,000), subject to annual adjustment under

section 112, the architect, engineer or other person preparing

such specifications shall prepare separate specifications for

the plumbing, heating, ventilating and electrical work. The

board of commissioners shall receive separate bids upon each of

the said branches of work and award the contract for the same to

the lowest responsible bidder for each of said branches.

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Section 4.  Section 2511-A(a), (b), (b.1) and (h) of the act,

added October 30, 2000 (P.L.616, No.85), are amended to read:

Section 2511-A.  Competition in Award of Contracts.--(a)  All

construction, reconstruction, repairs or work of any nature made

by any Authority, where the entire cost, value or amount of such

construction, reconstruction, repairs or work, including labor

and materials, shall exceed [ten thousand dollars ($10,000)] the

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base amount of twenty-five thousand dollars ($25,000), subject

to annual adjustment under section 112, except construction,

reconstruction, repairs or work done by employes of said

Authority or by labor supplied under agreement with any Federal

or State agency with supplies and materials purchased, as

hereinafter provided, shall be done only under contract or

contracts to be entered into by the Authority with the lowest

responsible bidder upon proper terms, after due public notice

has been given asking for competitive bids hereinafter provided.

No contract shall be entered into for construction or

improvement or repair of any project or portion thereof unless

the contractor shall give an undertaking, with a sufficient

surety or sureties approved by the Authority and in an amount

fixed by the Authority, for the faithful performance of the

contract. All such contracts shall provide, among other things,

that the person or corporation entering into such contract with

the Authority will pay for all materials furnished and services

rendered for the performance of the contract and that any person

or corporation furnishing such materials or rendering such

services may maintain an action to recover for the same against

the obligor in the undertaking as though such person or

corporation was named therein, provided the action is brought

within one (1) year after the time the cause of action accrued.

Nothing in this section shall be construed to limit the power of

the Authority to construct, repair or improve any project or

portion thereof or any addition, betterment or extension thereto

directly by the officers, agents and employes of the Authority

or otherwise than by contract.

(b)  All supplies and materials costing [ten thousand dollars

($10,000)] the base amount of twenty-five thousand dollars

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($25,000), subject to annual adjustment under section 112, or

more shall be purchased only after due advertisement as

hereinafter provided. The Authority shall accept the lowest bid

or bids, kinds, quality and material being equal, but the

Authority shall have the right to reject any or all bids or

select a single item from any bid. The provisions as to bidding

shall not apply to the purchase of patented and manufactured

products offered for sale in a non-competitive market or solely

by a manufacturer's authorized dealer.

(b.1)  Written or telephonic price quotations from at least

three (3) qualified and responsible contractors shall be

requested for all contracts that exceed [four thousand dollars

($4,000)] the base amount of ten thousand dollars ($10,000),

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subject to annual adjustment under section 112, but are less

than the amount requiring advertisement and competitive bidding,

or, in lieu of price quotations, a memorandum shall be kept on

file showing that fewer than three (3) qualified contractors

exist in the market area within which it is practicable to

obtain quotations. A written record of telephonic price

quotations shall be made and shall contain at least the date of

the quotation, the name of the contractor and the contractor's

representative, the construction, reconstruction, repair,

maintenance or work which was the subject of the quotation and

the price. Written price quotations, written records of

telephonic price quotations and memoranda shall be retained for

a period of three (3) years.

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(h)  An Authority shall not evade the provisions of this

section as to advertising for bids or purchasing materials or

contracting for services piecemeal for the purpose of obtaining

prices under [ten thousand dollars ($10,000)] the base amount of

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twenty-five thousand dollars ($25,000), subject to annual

adjustment under section 112, upon transactions which should, in

the exercise of reasonable discretion and prudence, be conducted

as one transaction amounting to more than [ten thousand dollars

($10,000)] the base amount of twenty-five thousand dollars

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($25,000), subject to annual adjustment under section 112. This

provision is intended to make unlawful the practice of evading

advertising requirements by making a series of purchases or

contracts each for less than the advertising requirement price

or by making several simultaneous purchases or contracts each

below said price when in either case the transaction involved

should have been made as one transaction for one price.

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Section 5.  This act shall apply to contracts and purchases

advertised on or after January 1 of the year following the

effective date of this section.

Section 6.  This act shall take effect immediately.