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, GERBER, 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 AND WATSON, JANUARY 27, 2011

REFERRED TO COMMITTEE ON LOCAL GOVERNMENT, JANUARY 27, 2011  

AN ACT

Amending the act of May 27, 1953 (P.L.244, No.34), entitled "An

act relating to and regulating the contracts of incorporated

towns and providing penalties," further providing for

regulation of contracts; providing for annual adjustment;

further providing for evasion of advertising requirements,

for contracts between $750 and $10,000 and for separate bids

for plumbing, heating, ventilating and electrical work.

The General Assembly of the Commonwealth of Pennsylvania

hereby enacts as follows:

Section 1.  Section 2(a) of the act of May 27, 1953 (P.L.244,

No.34), entitled "An act relating to and regulating the

contracts of incorporated towns and providing penalties,"

amended July 10, 1990 (P.L.392, No.93), is amended to read:

Section 2.  Regulation of Contracts.--(a)  All contracts or

purchases of incorporated towns in excess of [ten thousand

dollars] twenty-five thousand dollars subject to annual

adjustment under section 2.1, except those hereinafter

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

responsible bidder, after due notice in one newspaper of general

circulation published or circulated in the county in which the

town is situated at least three times at intervals of not less

than three days where daily newspapers of general circulation

are available for such publication, and in case of weekly

newspapers shall be published once a week for two successive

weeks. The first advertisement shall be published not less than

ten days prior to the date fixed for the opening of 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 town 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.

* * *

Section 2.  The act is amended by adding a section to read:

Section 2.1.  Annual Adjustment.--(a)  The Department of

Labor and Industry shall determine the percentage change in the

Consumer Price Index for All Urban Consumers 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.

(b)  The amount at which competitive bidding is required

under section 2(a) and the amount at which written or telephonic

price quotations are required under section 3.1 shall be

adjusted annually as follows:

(1)  In the case of competitive bidding, the positive

percentage change, as determined in accordance with subsection

(a), shall be multiplied by the amount applicable under section

2 for the current year and the product thereof shall be added to

the amount applicable under section 2 for the current year, with

the result rounded to the nearest multiple of ten dollars.

(2)  In the case of written or telephonic price quotations,

the positive percentage change, as determined in accordance with

subsection (a), shall be multiplied by the amount applicable

under section 3.1 for the current year and the product thereof

shall be added to the amount applicable under section 3.1 for

the current year, with the result rounded to the nearest

multiple of ten dollars.

(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 is required under section 2 and written or

telephonic price quotations are required under section 3.1 for

the calendar year beginning the first day of January after

publication of the notice.

Section 3.  Section 3 of the act, amended July 10, 1990

(P.L.392, No.93), is amended to read:

Section 3.  Evasion of Advertising Requirements.--(a)  No

member or members of council shall evade the provisions of

Section two hereof by purchasing or contracting for services and

personal properties piecemeal for the purpose of obtaining

prices under [ten thousand dollars] twenty-five thousand dollars

subject to annual adjustment under section 2.1 upon transactions

which transaction should, in the exercise of reasonable

discretion and prudence, be conducted as one transaction

amounting to more than [ten thousand dollars] twenty-five

thousand dollars subject to annual adjustment under section 2.1.

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 of

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.

(b)  Whenever 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.

(c)  Any council member who votes to unlawfully evade the

provisions of section 2 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 4.  Section 3.1 of the act, amended July 10, 1990

(P.L.392, No.93) and repealed in part December 18, 1996

(P.L.1140, No.170), is amended to read:

Section 3.1.  Contracts between Seven Hundred Fifty Dollars

and [Ten thousand] Twenty-five Thousand Dollars; Written 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] ten

thousand dollars subject to annual adjustment under section 2.1 

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.

Section 5.  Section 5 of the act, amended July 10, 1990

(P.L.392, No.93), is amended to read:

Section 5.  Separate Bids for Plumbing, Heating, Ventilating

and Electrical Work.--In the preparation for the erection,

construction and alteration of any public building of an

incorporated town, when the entire cost of such work shall

exceed [ten thousand dollars] twenty-five thousand dollars

subject to annual adjustment under section 2.1, the architect,

engineer or other person preparing such specifications shall

prepare separate specifications for the plumbing, heating,

ventilating and electrical work. 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.

Section 6.  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 7.  This act shall take effect immediately.