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 23, 1931 (P.L.932, No.317), entitled

"An act relating to cities of the third class; and amending,

revising, and consolidating the law relating thereto," in

contracts, further regulating contracts as to purchasing and

advertising requirements.

The General Assembly of the Commonwealth of Pennsylvania

hereby enacts as follows:

Section 1.  Section 1901(a), (b) and (d) of the act of June

<--

23, 1931 (P.L.932, No.317), known as The Third Class City Code,

reenacted and amended June 28, 1951 (P.L.662, No.164) and 

amended March 25, 1988 (P.L.289, No.32) and July 11, 1996

(P.L.647, No.109), are amended to read:

Section 1901.  Power to Make Contracts; Regulations

Concerning Contracts.--(a)  Each city may make contracts for

carrying into execution the provisions of this act and the laws

of the Commonwealth. The council shall, by ordinance, provide

for and regulate the award of all contracts. All contracts or

purchases not in excess of [ten] the base amount of twenty-five 

thousand dollars, subject to annual adjustment under section

1903.1, shall be by note or memorandum in writing, signed by the

officer or employe making the purchase or contract.

(b)  All services and personal properties required by any

city, or any department thereof, where the amount exceeds the

[sum of ten] base amount of twenty-five thousand dollars,

subject to annual adjustment under section 1903.1, shall be

furnished and performed under written contract, and the contract

shall be awarded and given to the lowest responsible bidder,

after advertising two times, each publication on a different

day, in not more than two newspapers, in accord with the

provisions of section one hundred and nine of this act, and the

bids shall not be opened until at least ten days have elapsed

after the first advertisement. A notice of the advertisement for

contracts or purchases shall also be posted at the city hall.

* * *

(d)  The contracts or purchases made by council involving an

expenditure [of over ten] in excess of the base amount of

twenty-five thousand dollars, subject to annual adjustment under

section 1903.1, 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 of the city,

provided they do not constitute new additions, extensions or

enlargements of existing facilities and equipment, but a bond

may be required by council as in other cases of work done.

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

any kind made or provided by any city through its own employes:

Provided, however, That this 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 council, which are patented and

manufactured or copyrighted products.

(4)  Those involving any policies of insurance or surety

company bonds; those made for public utility service under

tariffs on file with the Pennsylvania Public Utility Commission;

those made with another political subdivision or a county, the

Commonwealth of Pennsylvania, the Federal government, any agency

of the Commonwealth or the Federal government, or any municipal

authority, including the sale, leasing or loan of any supplies

or materials by the Commonwealth or the Federal government, or

their agencies, but the price thereof shall not be in excess of

that fixed by the Commonwealth, the Federal government, or their

agencies.

(5)  Those involving personal or professional services.

(6)  Those made during a state of emergency declared by the

mayor or chief executive in accord with section one thousand two

hundred and three of this act.

* * *

Section 2.  Section 1902 of the act, amended March 25, 1988

(P.L.289, No.32), is amended to read:

Section 1902.  Evasion of Advertising Requirements.--No

member or members of council shall evade the provisions of the

preceding section as to advertising for bids by purchasing or

contracting for services and personal properties piecemeal for

the purpose of obtaining prices under [ten] the base amount of

twenty-five thousand dollars, subject to annual adjustment under

section 1903.1, upon transactions which should, in the exercise

of reasonable discretion and prudence, be conducted as one

transaction amounting to more than [ten] the base amount of

twenty-five thousand dollars, subject to annual adjustment under

section 1903.1. 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

transactions involved should have been made as one transaction

for one price. Any members of council 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. Wherever it shall appear that a member

of council may have voted in violation of this section but the

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

council, this section shall be inapplicable.

Section 3.  The act is amended by adding a section to read:

Section 1903.1.  Adjustments Based on Consumer Price Index

for All Urban Consumers.--

 Adjustments to the base amounts specified under sections

1901, 1902 and 1909 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 section 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 section.

(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 sections 1901, 1902 and

1909.

(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 sections 1901, 1902 and 1909.

(5)  The determinations and adjustments required under this

section 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 1901, 1902 and

1909, 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 section for

the ensuing calendar year.

Section 4.  Section 1909 of the act, amended March 25, 1988

(P.L.289, No.32), is amended to read:

Section 1909.  Separate Bids for Plumbing, Heating,

Ventilating and Electrical Work, Elevators and Moving Stairs.--

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] the base amount of

twenty-five thousand dollars, subject to annual adjustment under

section 1903.1, the architect, engineer, or other person

preparing such specifications, shall prepare only the following

separate specifications; (1) plumbing, (2) heating, (3)

ventilating, (4) electrical work, (5) elevators and moving

stairs, and (6) one complete set of specifications for all the

other work to be done in such erection, construction and

alteration. The person or persons authorized to enter into

contracts for the erection, construction, or alteration of such

public buildings 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,

including the balance of the work in addition to the plumbing,

heating, ventilating and electrical work and elevators and

moving stairs. Where it is desired to install an air

conditioning unit, the heating and ventilating so involved may

be regarded as one branch of work having only one set of

specifications, and bids may be received and a contract awarded

thereon as hereinbefore provided.

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.

Section 1.  Section 1901(a), (b) and (d) of the act of June

<--

23, 1931 (P.L.932, No.317), known as The Third Class City Code,

reenacted and amended June 28, 1951 (P.L.662, No.164) and 

amended March 25, 1988 (P.L.289, No.32) and July 11, 1996

(P.L.647, No.109), are amended to read:

Section 1901.  Power to Make Contracts; Regulations

Concerning Contracts.--(a)  Each city may make contracts for

carrying into execution the provisions of this act and the laws

of the Commonwealth. The council shall, by ordinance, provide

for and regulate the award of all contracts. All contracts or

purchases not in excess of [ten] the base amount of eighteen 

thousand five hundred dollars, subject to adjustment under

section one thousand nine hundred and three point one of this

act, shall be by note or memorandum in writing, signed by the

officer or employe making the purchase or contract.

(b)  All services and personal properties required by any

city, or any department thereof, where the base amount exceeds

the sum of [ten] eighteen thousand five hundred dollars, subject

to adjustment under section one thousand nine hundred and three

point one of this act, shall be furnished and performed under

written contract, and the contract shall be awarded and given to

the lowest responsible bidder, after advertising two times, each

publication on a different day, in not more than two newspapers,

in accord with the provisions of section one hundred and nine of

this act, and the bids shall not be opened until at least ten

days have elapsed after the first advertisement. A notice of the

advertisement for contracts or purchases shall also be posted at

the city hall.

* * *

(d)  The contracts or purchases made by council involving an

expenditure [of over ten] in excess of the base amount of

eighteen thousand five hundred dollars, subject to adjustment

under section one thousand nine hundred and three point one of

this act, 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 of the city,

provided they do not constitute new additions, extensions or

enlargements of existing facilities and equipment, but a bond

may be required by council as in other cases of work done.

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

any kind made or provided by any city through its own employes:

Provided, however, That this 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 council, which are patented and

manufactured or copyrighted products.

(4)  Those involving any policies of insurance or surety

company bonds; those made for public utility service under

tariffs on file with the Pennsylvania Public Utility Commission;

those made with another political subdivision or a county, the

Commonwealth of Pennsylvania, the Federal government, any agency

of the Commonwealth or the Federal government, or any municipal

authority, including the sale, leasing or loan of any supplies

or materials by the Commonwealth or the Federal government, or

their agencies, but the price thereof shall not be in excess of

that fixed by the Commonwealth, the Federal government, or their

agencies.

(5)  Those involving personal or professional services.

(6)  Those made during a state of emergency declared by the

mayor or chief executive in accord with section one thousand two

hundred and three of this act.

* * *

Section 2.  Section 1902 of the act, amended March 25, 1988

(P.L.289, No.32), is amended to read:

Section 1902.  Evasion of Advertising Requirements.--No

member or members of council shall evade the provisions of the

preceding section as to advertising for bids by purchasing or

contracting for services and personal properties piecemeal for

the purpose of obtaining prices under [ten] the base amount of

eighteen thousand five hundred dollars, subject to adjustment

under section one thousand nine hundred and three point one of

this act, upon transactions which should, in the exercise of

reasonable discretion and prudence, be conducted as one

transaction amounting to more than [ten] the base amount of

eighteen thousand five hundred dollars, subject to adjustment

under section one thousand nine hundred and three point one of

this act. 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

transactions involved should have been made as one transaction

for one price. Any members of council 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. Wherever it shall appear that a member

of council may have voted in violation of this section but the

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

council, this section shall be inapplicable.

Section 3.  The act is amended by adding a section to read:

Section 1903.1.  Adjustments to Base Amount Based on Consumer

Price Index for All Urban Consumers.--

(a)  Adjustments to the base amounts specified under sections

one thousand nine hundred and one, one thousand nine hundred and

two and one thousand nine hundred and nine 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 section.

(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 sections one thousand nine

hundred and one and one thousand nine hundred and two.

(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 sections one thousand nine hundred

and one and one thousand nine hundred and two.

(5)  The determinations and adjustments required under this

section 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 section one thousand nine hundred and one, advertising is

required under section one thousand nine hundred and two or

separate bids are required under section one thousand nine

hundred and nine 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 section 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 per centum.

Section 4.  Section 1909 of the act, amended March 25, 1988

(P.L.289, No.32), is amended to read:

Section 1909.  Separate Bids for Plumbing, Heating,

Ventilating and Electrical Work, Elevators and Moving Stairs.--

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] the base

amount of eighteen thousand five hundred dollars, subject to

adjustment under section one thousand nine hundred and three

point one of this act, the architect, engineer, or other person

preparing such specifications, shall prepare only the following

separate specifications; (1) plumbing, (2) heating, (3)

ventilating, (4) electrical work, (5) elevators and moving

stairs, and (6) one complete set of specifications for all the

other work to be done in such erection, construction and

alteration. The person or persons authorized to enter into

contracts for the erection, construction, or alteration of such

public buildings 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,

including the balance of the work in addition to the plumbing,

heating, ventilating and electrical work and elevators and

moving stairs. Where it is desired to install an air

conditioning unit, the heating and ventilating so involved may

be regarded as one branch of work having only one set of

specifications, and bids may be received and a contract awarded

thereon as hereinbefore provided.

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.