SENATE AMENDED

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, TOEPEL, F. KELLER AND MIRABITO, JANUARY 27, 2011

SENATOR EICHELBERGER, LOCAL GOVERNMENT, IN SENATE, AS AMENDED, SEPTEMBER 27, 2011   

AN ACT

Amending the act of May 1, 1933 (P.L.103, No.69), entitled, as

reenacted and amended, "An act concerning townships of the

second class; and amending, revising, consolidating and

changing the law relating thereto," in contracts, further

providing for competitive bidding of contracts.

The General Assembly of the Commonwealth of Pennsylvania

hereby enacts as follows:

Section 1.  Section 3102(a), (b) and (h) of the act of May 1,

<--

1933 (P.L.103, No.69), known as The Second Class Township Code,

reenacted and amended November 9, 1995 (P.L.350, No.60), and

amended December 18, 1996 (P.L.1142, No.172), December 19, 1996

(P.L.1412, No.181) and October 11, 2000 (P.L.535, No.70), are

amended and the section is amended by adding a subsection to

read:

Section 3102.  Letting Contracts.--(a)  All contracts or

purchases in excess of the required advertising base amount of

[ten thousand dollars ($10,000)] twenty-five thousand dollars

($25,000), subject to adjustment under subsection (b.1), except

those specifically excluded, shall not be made except with and

from the lowest responsible bidder after due notice in one

newspaper of general circulation in the township. The notice for

bids shall be published at least two times at intervals of not

less than three days in daily newspapers or once a week for two

successive weeks in weekly newspapers. The first advertisement

shall be published not more than forty-five days, and the second

advertisement not less than ten days, before the date set for

the opening of bids. Notice of proposed contracts or purchases

shall also be posted where the board of supervisors normally

meets or in a conspicuous place within the township. Any

published notice for bids shall contain full plans and

specifications, or refer to the places where copies thereof can

be obtained, state the amount of the performance bond determined

under subsection (g) and give the date, time and place of a

meeting at which an individual or committee appointed by the

board of supervisors or the board of supervisors will open and

read the bids.

(b)  Written or telephonic price quotations from at least

three qualified and responsible contractors shall be requested

for all contracts [that exceed four thousand dollars ($4,000)] 

in excess of the base amount of ten thousand dollars ($10,000),

subject to adjustment under subsection (b.1), 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 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 years.

(b.1)  Adjustments to the base amounts specified under

subsections (a) and (b) 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 subsections (a) and

(b).

(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 subsections (a) and (b).

(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) at which competitive bidding is required

under subsection (a) and written or telephonic price quotations

are required under subsection (b), 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.

* * *

(h)  The contracts or purchases made by the board of

supervisors involving payments in excess of the required

advertising amount, which do not require advertising, bidding or

price quotations are as follows:

(1)  Those made for emergency, or routine maintenance,

repairs or replacements for water, electric light and other

public works of the township if they do not constitute new

additions, extensions or enlargements of existing facilities and

equipment.

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

any kind made or provided by any township through its own

employes. All contracts or purchases of materials used for

improvement, maintenance or construction [in excess of four

thousand dollars ($4,000) but less than the required advertising

amount] are subject to the provisions contained in subsection

(a) and (b)[, and those contracts or purchases in excess of the

required advertising amount are subject to the advertising

requirements contained in subsection (a)].

(3)  Those involving any policies of insurance or surety

company bonds, those made for public utility service, those made

for electricity, natural gas or telecommunications service

either directly or with an association authorized under Article

XIV in which the township is a member and those made with

another municipal corporation, county, school district or

municipality authority or Federal or State Government, including

the sale, leasing or loan of any supplies or materials by the

Federal or State Government or their agencies.

(4)  Those involving personal or professional services.

(5)  Those made for materials and supplies or equipment

rental under emergency conditions under 35 Pa.C.S. Pt. V 

(relating to emergency management services).

(6)  Those contracts involving equipment rental with

operators if more than fifty percent of the total labor

personnel hours required for the completion of the contract is

supplied by the township through its own employes.

(7)  Those contracts for the purchase of repair parts or

materials for use in existing township equipment or facilities

if the item or material to be purchased is the sole item of its

kind on the market or is manufactured as a replacement for the

original item or equipment being repaired.

(8)  Those for used equipment, articles, apparatus,

appliances, vehicles or parts thereof being purchased from a

public utility.

(9)  Those where particular types, models or pieces of

equipment, articles, apparatus, appliances, vehicles or parts

thereof which are patented and manufactured products.

* * *

Section 2.  This act shall apply to contracts and purchases

advertised after December 31 of the year in which this section

takes effect.

Section 3.  This act shall take effect immediately.

Section 1.  Section 3102(a), (b) and (h) of the act of May 1,

<--

1933 (P.L.103, No.69), known as The Second Class Township Code,

reenacted and amended November 9, 1995 (P.L.350, No.60) and

amended December 18, 1996 (P.L.1142, No.172), December 19, 1996

(P.L.1412, No.181) and October 11, 2000 (P.L.535, No.70), are

amended and the section is amended by adding a subsection to

read:

Section 3102.  Letting Contracts.--(a)  All contracts or

purchases in excess of the required advertising base amount of

[ten thousand dollars ($10,000)] eighteen thousand five hundred

dollars ($18,500), subject to adjustment under subsection (b.1),

except those specifically excluded, shall not be made except

with and from the lowest responsible bidder after due notice in

one newspaper of general circulation in the township. The notice

for bids shall be published at least two times at intervals of

not less than three days in daily newspapers or once a week for

two successive weeks in weekly newspapers. The first

advertisement shall be published not more than forty-five days,

and the second advertisement not less than ten days, before the

date set for the opening of bids. Notice of proposed contracts

or purchases shall also be posted where the board of supervisors

normally meets or in a conspicuous place within the township.

Any published notice for bids shall contain full plans and

specifications, or refer to the places where copies thereof can

be obtained, state the amount of the performance bond determined

under subsection (g) and give the date, time and place of a

meeting at which an individual or committee appointed by the

board of supervisors or the board of supervisors will open and

read the bids.

(b)  Written or telephonic price quotations from at least

three qualified and responsible contractors shall be requested

for all contracts [that exceed four thousand dollars ($4,000)]  

in excess of the base amount of ten thousand dollars ($10,000),

subject to adjustment under subsection (b.1), 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 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 years.

(b.1)  Adjustments to the base amounts specified under

subsections (a) and (b) 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, 2012, 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 hundred dollars ($100), to determine the final

adjusted base amounts for purposes of subsections (a) and (b).

(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 preliminary adjusted amount of the prior

year to calculate the preliminary adjusted amounts for the

current year. The sums thereof shall be rounded to the nearest

one hundred dollars ($100) to determine the new final adjusted

base amounts for purposes of subsections (a) and (b).

(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) at which competitive bidding is required

under subsection (a) and written or telephonic price quotations

are required under subsection (b), 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.

(8)  The annual increase in the preliminary adjusted base

amounts obtained under paragraphs (3) and (4) shall not exceed

three percent.

* * *

(h)  The contracts or purchases made by the board of

supervisors involving payments in excess of the required

advertising amount, which do not require advertising, bidding or

price quotations are as follows:

(1)  Those made for emergency, or routine maintenance,

repairs or replacements for water, electric light and other

public works of the township if they do not constitute new

additions, extensions or enlargements of existing facilities and

equipment.

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

any kind made or provided by any township through its own

employes. All contracts or purchases of materials used for

improvement, maintenance or construction [in excess of four

thousand dollars ($4,000) but less than the required advertising

amount] are subject to the provisions contained in subsection

(a) and (b)[, and those contracts or purchases in excess of the

required advertising amount are subject to the advertising

requirements contained in subsection (a)].

(3)  Those involving any policies of insurance or surety

company bonds, those made for public utility service, those made

for electricity, natural gas or telecommunications service

either directly or with an association authorized under Article

XIV in which the township is a member and those made with

another municipal corporation, county, school district or

municipality authority or Federal or State Government, including

the sale, leasing or loan of any supplies or materials by the

Federal or State Government or their agencies.

(4)  Those involving personal or professional services.

(5)  Those made for materials and supplies or equipment

rental under emergency conditions under 35 Pa.C.S. Pt. V 

(relating to emergency management services).

(6)  Those contracts involving equipment rental with

operators if more than fifty percent of the total labor

personnel hours required for the completion of the contract is

supplied by the township through its own employes.

(7)  Those contracts for the purchase of repair parts or

materials for use in existing township equipment or facilities

if the item or material to be purchased is the sole item of its

kind on the market or is manufactured as a replacement for the

original item or equipment being repaired.

(8)  Those for used equipment, articles, apparatus,

appliances, vehicles or parts thereof being purchased from a

public utility.

(9)  Those where particular types, models or pieces of

equipment, articles, apparatus, appliances, vehicles or parts

thereof which are patented and manufactured products.

* * *

Section 2.  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 3.  This act shall take effect immediately.