THE GENERAL ASSEMBLY OF PENNSYLVANIA

SENATE BILL

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

REFERRED TO LOCAL GOVERNMENT, JANUARY 26, 2011  

AN ACT

Amending Titles 53 (Municipalities Generally) and 74

(Transportation) of the Pennsylvania Consolidated Statutes,

further providing for competitive bidding of contracts by

intergovernmental units, by parking authorities, by municipal

authorities and by metropolitan transportation authorities.

The General Assembly of the Commonwealth of Pennsylvania

hereby enacts as follows:

Section 1.  Section 2308 of Title 53 of the Pennsylvania

Consolidated Statutes is amended to read:

§ 2308.  Bids for certain joint purchases.

(a)  Notice.--All joint purchases involving an expenditure of

more than [$10,000] $25,000, subject to adjustment under

subsection (b), shall be made by contract, in writing, only

after notice for bids once a week for two weeks in at least one

and not more than two newspapers of general circulation in the

joining local governments. All contracts shall be let to the

lowest responsible bidder. Every contract for the construction,

reconstruction, alteration, repair, improvement or maintenance

of public works shall comply with the provisions of the act of

March 3, 1978 (P.L.6, No.3), known as the Steel Products

Procurement Act.

(b)  Adjustment.--

(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) shall be adjusted every five years. The

positive percentage change, as determined in accordance with

paragraph (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 $100.

(3)  The determination required under paragraph (1) and

the calculation of the adjustments required under paragraph

(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

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

year period following the year in which the determination

required under paragraph (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 percentage change determined

in accordance with paragraph (1) and the amounts, whether

adjusted or unadjusted in accordance with paragraph (2), at

which competitive bidding is required under subsection (a)

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

after publication of the notice.

Section 2.  Sections 5511(c) and (h)(1) and 5614(a)(1), (b),

(c) and (h)(1) of Title 53 are amended and the sections are

amended by adding subsections to read:

§ 5511.  Competition in award of contracts.

* * *

(c)  Quotations.--Written or telephonic price quotations from

at least three qualified and responsible contractors shall be

requested for a contract which exceeds [$4,000] $7,000, subject

to adjustment under subsection (c.1), but is less than the

amount requiring advertisement and competitive bidding. 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.

(c.1)  Adjustments.--

(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) or (b) and the amount at which written

or telephonic price quotations are required under subsection

(c) shall be adjusted every five years as follows:

(i)  For subsections (a) and (b):

(A)  Multiply the positive percentage change

under paragraph (1) by the amount applicable under

subsection (a) or (b) for the current five-year

period.

(B)  Add the product under clause (A) to the

amount applicable under subsection (a) or (b) for the

current five-year period.

(C)  Round the sum under clause (B) to the

nearest multiple of $100.

(ii)  For subsection (c):

(A)  Multiply the positive percentage change, as

determined under paragraph (1) by the amount

applicable under subsection (c) for the current five-

year period.

(B)  Add the product under clause (A) to the

amount applicable under subsection (c) for the

current five-year period.

(C)  Round the sum under clause (B) to the

nearest multiple of $100.

(3)  The determination required under paragraph (1) and

the calculation of the adjustments required under paragraph

(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 under paragraph (2)

shall become effective January 1 for the five-year period

following the year in which the determination required under

paragraph (1) is made.

(5)  The department shall give notice in the Pennsylvania

Bulletin prior to January 1 of each calendar year in which

the percentage change determined in accordance with paragraph

(1) and the amounts, whether adjusted or unadjusted in

accordance with paragraph (2), at which competitive bidding

is required under subsection (a) or (b) and written or

telephonic price quotations are required under subsection (c)

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

after publication of the notice.

* * *

(h)  Evasion.--

(1)  An authority may not evade the provisions of this

section as to bids or purchasing materials or contracting for

services piecemeal for the purpose of obtaining prices under

[$25,000] the amount required by this section upon

transactions which should, in the exercise of reasonable

discretion and prudence, be conducted as one transaction

amounting to more than [$25,000] the amount required by this

section.

* * *

§ 5614.  Competition in award of contracts.

(a)  Services.--

(1)  Except as set forth in paragraph (2), all

construction, reconstruction, repair or work of any nature

made by an authority if the entire cost, value or amount,

including labor and materials, exceeds [$10,000] $25,000,

subject to adjustment under subsection (c.1), shall be done

only under contract to be entered into by the authority with

the lowest responsible bidder upon proper terms after public

notice asking for competitive bids as provided in this

section.

* * *

(b)  Supplies and materials.--All supplies and materials

costing at least [$10,000] $25,000, subject to adjustment under

subsection (c.1), shall be purchased only after advertisement as

provided in this section. The authority shall accept the lowest

bid, kind, quality and material being equal, but the authority

shall have the right to reject any or all bids or select a

single item from any bid. The provisions as to bidding shall not

apply to the purchase of patented and manufactured products

offered for sale in a noncompetitive market or solely by a

manufacturer's authorized dealer.

(c)  Quotations.--Written or telephonic price quotations from

at least three qualified and responsible contractors shall be

requested for a contract which exceeds [$4,000] $7,000, subject

to adjustment under subsection (c.1), but is less than the

amount requiring advertisement and competitive bidding. 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.

(c.1)  Adjustments.--

(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)(1) or (b) and the amount at which

written or telephonic price quotations are required under

subsection (c) shall be adjusted every five years as follows:

(i)  For subsections (a)(1) and (b):

(A)  Multiply the positive percentage change

under paragraph (1) by the amount applicable under

subsection (a) or (b) for the current five-year

period.

(B)  Add the product under clause (A) to the

amount applicable under subsection (a)(1) or (b) for

the current five-year period.

(C)  Round the sum under clause (B) to the

nearest multiple of $100.

(ii)  For subsection (c):

(A)  Multiply the positive percentage change, as

determined under paragraph (1) by the amount

applicable under subsection (c) for the five-year

period.

(B)  Add the product under clause (A) to the

amount applicable under subsection (c) for the

current five-year period.

(C)  Round the sum under clause (B) to the

nearest multiple of $100.

(3)  The determination required under paragraph (1) and

the calculation of the adjustments required under paragraph

(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 under paragraph (2)

shall become effective January 1 for the five-year period

following the year in which the determination required under

paragraph (1) is made.

(5)  The department shall give notice in the Pennsylvania

Bulletin prior to January 1 of each calendar year in which

the percentage change determined in accordance with paragraph

(1) and the amounts, whether adjusted or unadjusted in

accordance with paragraph (2), at which competitive bidding

is required under subsection (a)(1) or (b) and written or

telephonic price quotations are required under subsection (c)

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

after publication of the notice.

* * *

(h)  Evasion.--

(1)  An authority may not evade the provisions of this

section as to bids or purchasing materials or contracting for

services piecemeal for the purpose of obtaining prices under

[$10,000] the amount required by this section upon

transactions which should, in the exercise of reasonable

discretion and prudence, be conducted as one transaction

amounting to more than [$10,000] the amount required by this

section.

* * *

Section 3.  Section 1750 of Title 74 is amended to read:

§ 1750.  Contracts, procurement and sale of property.

(a)  Competitive bids.--Except in the purchase of unique

articles or articles which, for any other reason, cannot be

obtained in the open market and except as provided in section

1741 (relating to general powers) and as provided in this

chapter, competitive bids shall be secured before any purchase

or sale, by contract or otherwise, is made or before any

contract is awarded for construction, alterations, supplies,

equipment, repairs or maintenance or for rendering any services

to the authority other than professional services. Purchases

shall be made from or the contract shall be awarded to the

lowest responsive, responsible bidder. Sales shall be made to

the highest responsive, responsible bidder. No purchase of any

unique article or other articles which cannot be obtained in the

open market shall be made without express approval of the board

where the amount involved is in excess of $25,000. The authority

shall not be subject to [the act of November 26, 1978 (P.L.1309,

No.317), referred to as the Public Works Contract Regulation

Law.] 62 Pa.C.S. Ch. 39 (relating to contracts for public

works). Nothing in this section or any other law of this

Commonwealth shall require the authority to competitively bid

architectural design, engineering, construction management or

other professional services required by the authority.

(b)  Procedure.--All purchases and sales in excess of $25,000

shall be awarded after advertising in a local newspaper of

general circulation in the metropolitan area at least two weeks

prior to the bid opening. Bids shall be publicly opened and read

aloud at a date, time and place designated in the invitation to

bid. Invitations to bid shall be sent at least one week prior to

the bid opening to at least three potential bidders who are

qualified technically and financially to submit bids, or, in

lieu thereof, a memorandum shall be kept on file showing that

less than three potential bidders so qualified exist in the

market area within which it is practicable to obtain bids.

[(c)  Qualified vendors.--Written price quotations from at

least three qualified and responsible vendors shall be solicited

for all purchases and sales under $25,000 and over $10,000, or,

in lieu thereof, a memorandum approved by the general manager

shall be kept on file showing that less than three vendors so

qualified exist in the market area within which it is

practicable to obtain quotations, except as provided in this

chapter.]

(d)  Small purchases.--[Purchases] Except as set forth in 62

Pa.C.S. § 3742 (relating to procurement limits for mass

transportation authorities), purchases or sales under [$10,000]

$25,000, subject to adjustment under subsection (l), may be

negotiated with or without competitive bidding under sound

procurement procedures as promulgated and established by the

general manager.

(e)  Waiver.--Competitive bidding requirements may be waived

if it is determined by the general manager, or in such other

manner as the board may provide, that an emergency directly and

immediately affecting customer service or public health, safety

or welfare requires immediate delivery of supplies, materials,

equipment or services. A record of circumstances explaining the

emergency shall be submitted to the board at its next regular

meeting and thereafter kept on file.

(f)  Sale or lease of real property.--Contracts for the sale

or lease of real property owned by the authority shall be

awarded after competitive bidding as shown in subsection (b),

except as provided in section 1741(a)(22) where the contract is

entered into with the Commonwealth or any government agency or

with the United States government or any agency or

instrumentality thereof or as provided in section 1741(a)(24).

(g)  Property management contracts.--Contracts for the

management of authority-owned property, such as bus routes or

subway systems, may be negotiated and awarded by an affirmative

vote of one more than a majority of all members of the board.

(h)  Avoidance prohibited.--Requirements shall not be split

into parts for the purpose of avoiding the provisions of this

section.

(i)  Rejection of bids.--The authority shall have the right

to reject any or all bids or parts of any or all bids, whenever,

in the opinion of the board, rejection is necessary for the

protection of the interests of the authority. In every case, a

record shall be made setting forth the reason for the rejection,

which record shall thereafter be kept on file.

(j)  Rules and regulations.--The board may by resolution

adopt policies to effectuate the provisions of this section.

(k)  Concessions.--All concessions granted by the authority

for the sale of products or the rendition of services for a

consideration on authority property shall be awarded only under

written specifications after competitive bidding and to the

highest responsive, responsible bidder in a manner similar to

that required by subsection (b) [or (c) as appropriate]. This

requirement for competitive bidding shall not apply to any

concession which has been granted by a transportation system

acquired by the authority and which by the terms of the

agreement granting it will terminate within one year from date

of the acquisition of the transportation system by the authority

nor to any concession involving the estimated receipt by the

authority of less than [$10,000] $25,000, subject to adjustment

under subsection (l), over the period for which the concession

is granted.

(l)  Consumer Price Index adjustments.--

(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 (b) or (k) and the amount at which

competitive bidding may apply to purchases and sales under

subsection (d) shall be adjusted every five years as follows:

(i)  For subsections (b) and (k):

(A)  Multiply the positive percentage change

under paragraph (1) by the amount applicable under

subsection (b) or (k) for the current five-year

period.

(B)  Add the product under clause (A) to the

amount applicable under subsection (b) or (k) for the

current five-year period.

(C)  Round the sum under clause (B) to the

nearest multiple of $100.

(ii)  For subsection (d):

(A)  Multiply the positive percentage change, as

determined under paragraph (1) by the amount

applicable under subsection (d) for the current five-

year period.

(B)  Add the product under clause (A) to the

amount applicable under subsection (d) for the

current five-year period.

(C)  Round the sum under clause (B) to the

nearest multiple of $100.

(3)  The determination required under paragraph (1) and

the calculation of the adjustments required under paragraph

(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

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

year period following the year in which the determination

required under paragraph (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 percentage change determined

in accordance with paragraph (1) and the amounts, whether

adjusted or unadjusted in accordance with paragraph (2), at

which competitive bidding is required under subsection (b) or

(k) and the amount at which competitive bidding may apply to

purchases and sales under subsection (d) for the five-year

period beginning the first day of January after publication

of the notice.

Section 4.  This act shall apply to contracts and purchases

advertised after December 31 of the year in which this section

takes effect.

Section 5.  This act shall take effect immediately.