THE GENERAL ASSEMBLY OF PENNSYLVANIA

SENATE BILL

INTRODUCED BY EICHELBERGER, KASUNIC, FOLMER, GORDNER, BOSCOLA, ORIE, RAFFERTY, YAW, M. WHITE, D. WHITE, ERICKSON, BAKER, ALLOWAY, BRUBAKER, GREENLEAF, SMUCKER, EARLL, WAUGH, FERLO, ROBBINS, VANCE, SCARNATI, McILHINNEY, PICCOLA, WARD AND BROWNE, JANUARY 26, 2011

SENATOR CORMAN, APPROPRIATIONS, RE-REPORTED AS AMENDED, SEPTEMBER 20, 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," further providing for contracts and acquisition of

property and for general regulations concerning contracts.

The General Assembly of the Commonwealth of Pennsylvania

hereby enacts as follows:

Section 1.  Section 1802(a) and (a.1) 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) 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] twenty-five thousand 

<--

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] seven

<--

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)  (1)  Every five years, beginning with the year in

<--

which this subsection becomes applicable to contracts and

purchases, the Department of Labor and Industry shall calculate

the average 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 preceding five-year

period.

(2)  The amount at which competitive bidding is required

under subsection (a) and the amount at which written or

telephonic price quotations are required under subsection (a.1)

shall be adjusted every five years as follows:

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

percentage change, as determined in accordance with clause (1),

shall be multiplied by the amount applicable under subsection

(a) for the current five-year period and the product thereof

shall be added to the amount applicable under subsection (a) for

the current five-year period, with the result rounded to the

nearest multiple of one hundred dollars.

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

the positive percentage change, as determined in accordance with

clause (1), shall be multiplied by the amount applicable under

subsection (a.1) for the current five-year period and the

product thereof shall be added to the amount applicable under

subsection (a.1) for the current five-year period, with the

result rounded to the nearest multiple of one hundred dollars.

(3)  The determination required under clause (1) and the

calculation of the adjustments required under clause (2) shall

be made in the period between October 1 and November 15 of the

year following the effective date of this subsection, and

between October 1 and November 15 of each successive year.

(4)  The adjusted amounts obtained in accordance with clause

(2) shall become effective January 1 for the five-year period

following the year in which the determination required under

clause (1) is made.

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

in the Pennsylvania Bulletin prior to January 1 of each calendar

year in which the annual percentage change determined in

accordance with clause (1) and the amounts, whether adjusted or

unadjusted in accordance with clause (2), at which competitive

bidding is required under subsection (a) and written or

telephonic price quotations are required under subsection (a.1)

for the five-year period beginning the first day of January

after publication of the notice.

(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 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 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 thousand 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 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) 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)  No adjustment to the base amounts specified under

subsection (a) shall exceed three percent of the most recently

adjusted base amount.

* * *

Section 2.  Section 1802.1 of the act, amended July 10, 1990

(P.L.389, No.92), is 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] twenty-five thousand 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] 

twenty-five thousand 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 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.