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 AND F. KELLER, JANUARY 27, 2011

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

AN ACT

Amending the act of June 24, 1931 (P.L.1206, No.331), entitled

"An act concerning townships of the first class; amending,

revising, consolidating, and changing the law relating

thereto," in contracts, further providing for general

regulations concerning contracts, for evasion of advertising

requirements and for separate specifications for branches of

work.

The General Assembly of the Commonwealth of Pennsylvania

hereby enacts as follows:

Section 1.  Section 1802(a), (a.1) and (d)(2) of the act of

<--

June 24, 1931 (P.L.1206, No.331), known as The First Class

Township Code, reenacted and amended May 27, 1949 (P.L.1955,

No.569) and amended or added July 10, 1990 (P.L.389, No.92),

December 18, 1996 (P.L.1149, No.173) and December 20, 1996

(P.L.1495, No.192), are amended and the section is amended by

adding a subsection to read:

Section 1802.  General Regulations Concerning Contracts.--(a)

All contracts or purchases made by any township, involving the

expenditure [of over ten thousand dollars] in excess of the base

amount of twenty-five thousand dollars subject to annual

adjustment under subsection (a.2), except those hereinafter

mentioned, shall not be made except with and from the lowest

responsible bidder, shall be in writing, and shall be made only

after notice by the secretary, published, in one newspaper of

general circulation, published or circulating in the county in

which the township is situated, at least two times at intervals

of not less than three 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 successive weeks. The first advertisement shall

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

advertisement not less than ten days prior to the date fixed for

the opening of bids. Advertisements for contracts or purchases

shall also be posted in a conspicuous place within the township.

Advertisements for contracts or purchases shall contain the

date, time and location for opening of bids and shall state the

amount of the performance bond determined under subsection (c).

All plans and specifications shall be on file at least ten days

in advance of opening bids. The amount of the contract shall in

all cases, whether of straight sale price, conditional sale,

bailment lease, or otherwise, be the entire amount which the

township pays to the successful bidder or his assigns in order

to obtain the services or property, or both, and shall not be

construed to mean only the amount which is paid to acquire title

or to receive any other particular benefit or benefits of the

whole bargain.

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

three qualified and responsible contractors shall be requested

for all contracts that [exceed four thousand dollars] are in

excess of the base amount of ten thousand dollars subject to

annual adjustment under subsection (a.2) 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.

(a.2)  Adjustments to the base amounts specified under

subsections (a), (a.1) and (d)(2) and sections 1802.1(a) and

1805 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 to determine the final adjusted

base amounts for purposes of subsections (a), (a.1) and (d)(2)

and sections 1802.1(a) and 1805.

(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 to determine the new final adjusted base

amounts for purposes of subsections (a), (a.1) and (d)(2) and

sections 1802.1(a) and 1805.

(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 subsections (a), (a.1)

and (d)(2) and sections 1802.1(a) and 1805, 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.

* * *

Section 1.  Section 1802(a), (a.1) and (d)(2) of the act of

<--

June 24, 1931 (P.L.1206, No.331), known as The First Class

Township Code, reenacted and amended May 27, 1949 (P.L.1955,

No.569) and amended or added July 10, 1990 (P.L.389, No.92),

December 18, 1996 (P.L.1149, No.173) and December 20, 1996

(P.L.1495, No.192), are amended and the section is amended by

adding a subsection to read:

Section 1802.  General Regulations Concerning Contracts.--(a)

All contracts or purchases made by any township, involving the

expenditure of over [ten thousand dollars] the base amount of

eighteen thousand five hundred dollars subject to adjustment

under subsection (a.2), except those hereinafter mentioned,

shall not be made except with and from the lowest responsible

bidder, shall be in writing, and shall be made only after notice

by the secretary, published, in one newspaper of general

circulation, published or circulating in the county in which the

township is situated, at least two times at intervals of not

less than three 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 successive weeks. The first advertisement shall

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

advertisement not less than ten days prior to the date fixed for

the opening of bids. Advertisements for contracts or purchases

shall also be posted in a conspicuous place within the township.

Advertisements for contracts or purchases shall contain the

date, time and location for opening of bids and shall state the

amount of the performance bond determined under subsection (c).

All plans and specifications shall be on file at least ten days

in advance of opening bids. The amount of the contract shall in

all cases, whether of straight sale price, conditional sale,

bailment lease, or otherwise, be the entire amount which the

township pays to the successful bidder or his assigns in order

to obtain the services or property, or both, and shall not be

construed to mean only the amount which is paid to acquire title

or to receive any other particular benefit or benefits of the

whole bargain.

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

three qualified and responsible contractors shall be requested

for all contracts [that exceed four thousand dollars] in excess

of the base amount of ten thousand dollars subject to adjustment

under subsection (a.2) 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.

(a.2)  Adjustments to the base amounts specified under

subsection (a) 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 clause (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, to determine the final adjusted

base amounts for purposes of subsection (a).

(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 to determine the new final adjusted base

amounts for purposes of subsection (a).

(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 clauses (3) and (4) shall become

effective January 1 for the calendar year following the year in

which the determination required under clause (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 clause (1) and the unadjusted

or final adjusted base amounts determined under clauses (3) and

(4) at which competitive bidding is required under subsection

(a) 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 clauses (3) and (4) shall not exceed

three per centum.

* * *

(d)  The contracts or purchases made by the commissioners

which shall not require advertising, bidding or price

quotations, as hereinbefore provided, are as follows:

* * *

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

any kind made or provided by any township through its own

employes: Provided, however, That all materials used for street

improvement, maintenance, and/or construction in excess of

[four] the base amount of ten thousand dollars be subject to the

relevant price quotation or advertising requirements as

contained herein and to annual adjustment under subsection

<--

(a.2).

* * *

Section 2.   Sections 1802.1 and 1805 of the act, amended

<--

July 10, 1990 (P.L.389, No.92),  are amended to read:

Section 1802.1.  Evasion of Advertising Requirements.--(a)

No commissioner or commissioners shall evade the provisions of

section one thousand eight hundred two as to advertising for

bids, by purchasing or contracting for services and personal

properties piecemeal for the purpose of obtaining prices under

[ten thousand dollars] the base amount of twenty-five thousand

dollars subject to annual adjustment under section 1802(a.2) 

upon transactions, which transactions should, in the exercise of

reasonable discretion and prudence, be conducted as one

transaction amounting to more than [ten thousand dollars] the

base amount of twenty-five thousand dollars subject to annual

adjustment under section 1802(a.2). This provision is intended

to make unlawful the evading of 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 transactions involved should have been made as one

transaction for one price. Any commissioners who so vote in

violation of this provision, and who know that the transaction

upon which they so vote is or ought to be a part of a larger

transaction, and that it is being divided in order to evade the

requirements as to advertising for bids, shall be jointly and

severally subject to surcharge for ten per centum of the full

amount of the contract or purchase. Whenever it shall appear

that a commissioner may have voted in violation of this section,

but the purchase or contract on which he so voted was not

approved by the board of commissioners, this section shall be

inapplicable.

(b)  Any commissioner who votes to unlawfully evade the

provisions of section one thousand eight hundred two and who

knows that the transaction upon which he so votes is or ought to

be a part of a larger transaction and that it is being divided

in order to evade the requirements as to advertising for bids

commits a misdemeanor of the third degree for each contract

entered into as a direct result of that vote. This penalty shall

be in addition to any surcharge which may be assessed pursuant

to subsection (a).

Section 2.  Sections 1802.1 and 1805 of the act, amended July

<--

10, 1990 (P.L.389, No.92), are amended to read:

Section 1802.1.  Evasion of Advertising Requirements.--(a) No

commissioner or commissioners shall evade the provisions of

section one thousand eight hundred two as to advertising for

bids, by purchasing or contracting for services and personal

properties piecemeal for the purpose of obtaining prices under

[ten thousand dollars] eighteen thousand five hundred dollars

subject to adjustment under section 1802(a.2) upon transactions,

which transactions should, in the exercise of reasonable

discretion and prudence, be conducted as one transaction

amounting to more than [ten thousand dollars] eighteen thousand

five hundred dollars subject to adjustment under section

1802(a.2). This provision is intended to make unlawful the

evading of 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

transactions involved should have been made as one transaction

for one price. Any commissioners who so vote in violation of

this provision, and who know that the transaction upon which

they so vote is or ought to be a part of a larger transaction,

and that it is being divided in order to evade the requirements

as to advertising for bids, shall be jointly and severally

subject to surcharge for ten per centum of the full amount of

the contract or purchase. Whenever it shall appear that a

commissioner may have voted in violation of this section, but

the purchase or contract on which he so voted was not approved

by the board of commissioners, this section shall be

inapplicable.

(b)  Any commissioner who votes to unlawfully evade the

provisions of section one thousand eight hundred two and who

knows that the transaction upon which he so votes is or ought to

be a part of a larger transaction and that it is being divided

in order to evade the requirements as to advertising for bids

commits a misdemeanor of the third degree for each contract

entered into as a direct result of that vote. This penalty shall

be in addition to any surcharge which may be assessed pursuant

to subsection (a).

Section 1805.  Separate Specifications for Branches of

Work.--In the preparation of specifications for the erection or

alteration of any public building, when the entire cost of such

work exceeds [ten] twenty-five thousand] the base amount of

<--

eighteen thousand five hundred dollars, subject to annual

adjustment under section 1802(a.2), the architect, engineer, or

person preparing such specifications shall prepare separate

specifications for the plumbing, heating, ventilating, and

electrical work, and the township shall receive separate bids

upon each of such branches of work, and award the contract for

the same to the lowest responsible bidder.

Section 3.  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 4.  This act shall take effect immediately.