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House of Representatives
Session of 2021 - 2022 Regular Session


Posted: January 29, 2021 12:39 PM
From: Representative Perry A. Stambaugh
To: All House members
Subject: Raise Threshold of Separations Act
 In the near future I plan to introduce legislation (previous HB1646) to amend Act 104 of 1913, commonly referred to as the "Separations Act", to raise the public project cost threshold (before law applies) from $4,000 to $250,000. The legislation requires that the Department of Labor and Industry annually adjust the threshold upwards for inflation.

The Separations Act of 1913 requires that public entities solicit separate bids and award separate contracts for electrical, heating, ventilating and plumbing work undertaken as part of public construction projects in which total project costs exceed $4,000. The law was passed in 1913 with an original threshold of $1,000 which was last adjusted in 1981 to its current level of $4,000.

The Act's requirement, known as the multiple prime delivery system, renders the public entity responsible for the management and coordination of multiple contracts. The Separations Act is a general state law, with parallel provisions in some of the local government codes (County Code, i.g.) and in the School Code. My legislation would not affect the distinct "multiple prime bid" requirements in these other laws.

Arguably, perhaps the merits of "multiple prime" bidding requirements may be necessary for larger public projects. But I believe it is sound public policy to establish a reasonable threshold that allows a public body to complete a small project (storage shed, etc...) without having to go through the bureaucracy of following Separations Act requirements. I believe that the current threshold amount is far too low and causes public bodies to have to spend taxpayer money on meeting requirements that are archaic. After all, the original purpose of the law was not to apply to relatively small projects, which it now does.

Please consider joining me in cosponsoring this legislation.

Introduced as HB710