PRINTER'S NO. 2500
No. 1858 Session of 2005
INTRODUCED BY MILLARD, HERMAN, LESCOVITZ, BIANCUCCI, HANNA,
ROSS, HARHAI, HICKERNELL, HARPER, KAUFFMAN, T. STEVENSON,
HENNESSEY, M. KELLER, PETRI, McNAUGHTON, GINGRICH, ARMSTRONG,
BALDWIN, BOYD, CAPPELLI, DALLY, DENLINGER, DeWEESE, FRANKEL,
GEIST, HARRIS, HERSHEY, McILHATTAN, PHILLIPS, SCAVELLO AND
WATSON, JULY 3, 2005
REFERRED TO COMMITTEE ON LOCAL GOVERNMENT, JULY 3, 2005
AN ACT
1 Amending the act of May 27, 1953 (P.L.244, No.34), entitled "An
2 act relating to and regulating the contracts of incorporated
3 towns and providing penalties," further providing for
4 regulation of contracts; providing for annual adjustment;
5 further providing for evasion of advertising requirements,
6 for contracts between $750 and $10,000 and for separate bids
7 for plumbing, heating, ventilating and electrical work.
8 The General Assembly of the Commonwealth of Pennsylvania
9 hereby enacts as follows:
10 Section 1. Section 2(a) of the act of May 27, 1953 (P.L.244,
11 No.34), entitled "An act relating to and regulating the
12 contracts of incorporated towns and providing penalties,"
13 amended July 10, 1990 (P.L.392, No.93), is amended to read:
14 Section 2. Regulation of Contracts.--(a) All contracts or
15 purchases of incorporated towns in excess of [ten thousand
16 dollars] twenty-five thousand dollars subject to annual
17 adjustment under section 2.1, except those hereinafter
18 mentioned, shall not be made except with and from the lowest
1 responsible bidder, after due notice in one newspaper of general
2 circulation published or circulated in the county in which the
3 town is situated at least three times at intervals of not less
4 than three days where daily newspapers of general circulation
5 are available for such publication, and in case of weekly
6 newspapers shall be published once a week for two successive
7 weeks. The first advertisement shall be published not less than
8 ten days prior to the date fixed for the opening of bids. The
9 amount of the contract shall in all cases, whether of straight
10 sale price, conditional sale, bailment lease or otherwise, be
11 the entire amount which the town pays to the successful bidder
12 or his assigns in order to obtain the services or property or
13 both, and shall not be construed to mean only the amount which
14 is paid to acquire title or to receive any other particular
15 benefit or benefits of the whole bargain.
16 * * *
17 Section 2. The act is amended by adding a section to read:
18 Section 2.1. Annual Adjustment.--(a) The Department of
19 Labor and Industry shall determine the percentage change in the
20 Consumer Price Index for All Urban Consumers for the twelve-
21 month period ending September 30 of the calendar year in which
22 this section becomes effective, and for each successive twelve-
23 month period thereafter.
24 (b) The amount at which competitive bidding is required
25 under section 2(a) and the amount at which written or telephonic
26 price quotations are required under section 3.1 shall be
27 adjusted annually as follows:
28 (1) In the case of competitive bidding, the positive
29 percentage change, as determined in accordance with subsection
30 (a), shall be multiplied by the amount applicable under section
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1 2 for the current year and the product thereof shall be added to
2 the amount applicable under section 2 for the current year, with
3 the result rounded to the nearest multiple of ten dollars.
4 (2) In the case of written or telephonic price quotations,
5 the positive percentage change, as determined in accordance with
6 subsection (a), shall be multiplied by the amount applicable
7 under section 3.1 for the current year and the product thereof
8 shall be added to the amount applicable under section 3.1 for
9 the current year, with the result rounded to the nearest
10 multiple of ten dollars.
11 (c) The annual determination required under subsection (a)
12 and the calculation of the adjustments required under subsection
13 (b) shall be made in the period between October 1 and November
14 15 of the year following the effective date of this section, and
15 annually between October 1 and November 15 of each successive
16 year.
17 (d) The adjusted amounts obtained in accordance with
18 subsection (b) shall become effective January 1 for the calendar
19 year following the year in which the determination required
20 under subsection (a) is made.
21 (e) The Department of Labor and Industry shall give notice
22 in the Pennsylvania Bulletin prior to January 1 of each calendar
23 year of the annual percentage change determined in accordance
24 with subsection (a), and the amounts, whether adjusted or
25 unadjusted in accordance with subsection (b), at which
26 competitive bidding is required under section 2 and written or
27 telephonic price quotations are required under section 3.1 for
28 the calendar year beginning the first day of January after
29 publication of the notice.
30 Section 3. Section 3 of the act, amended July 10, 1990
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1 (P.L.392, No.93), is amended to read:
2 Section 3. Evasion of Advertising Requirements.--(a) No
3 member or members of council shall evade the provisions of
4 Section two hereof by purchasing or contracting for services and
5 personal properties piecemeal for the purpose of obtaining
6 prices under [ten thousand dollars] twenty-five thousand dollars
7 subject to annual adjustment under section 2.1 upon transactions
8 which transaction should, in the exercise of reasonable
9 discretion and prudence, be conducted as one transaction
10 amounting to more than [ten thousand dollars] twenty-five
11 thousand dollars subject to annual adjustment under section 2.1.
12 This provision is intended to make unlawful the evading of
13 advertising requirements by making a series of purchases or
14 contracts each for less than the advertising requirement of
15 price, or by making several simultaneous purchases or contracts
16 each below said price, when, in either case, the transactions
17 involved should have been made as one transaction for one price.
18 Any members of council who so vote in violation of this
19 provision and who know that the transaction upon which they so
20 vote is or ought to be a part of a larger transaction and that
21 it is being divided in order to evade the requirements as to
22 advertising for bids shall be jointly and severally subject to
23 surcharge for ten per centum of the full amount of the contract
24 or purchase.
25 (b) Whenever it shall appear that a member of council may
26 have voted in violation of this section but the purchase or
27 contract on which he so voted was not approved by council, this
28 section shall be inapplicable.
29 (c) Any council member who votes to unlawfully evade the
30 provisions of section 2 and who knows that the transaction upon
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1 which he so votes is or ought to be a part of a larger
2 transaction and that it is being divided in order to evade the
3 requirements as to advertising for bids commits a misdemeanor of
4 the third degree for each contract entered into as a direct
5 result of that vote. This penalty shall be in addition to any
6 surcharge which may be assessed pursuant to subsection (a).
7 Section 4. Section 3.1 of the act, amended or repealed July
8 10, 1990 (P.L.392, No.93) and December 18, 1996 (P.L.1140,
9 No.170), is amended to read:
10 Section 3.1. Contracts between Seven Hundred Fifty Dollars
11 and [Ten thousand] Twenty-five Thousand Dollars; Written Bids.--
12 (b) Written or telephonic price quotations from at least
13 three qualified and responsible contractors shall be requested
14 for all contracts that exceed [four thousand dollars] ten
15 thousand dollars subject to annual adjustment under section 2.1
16 but are less than the amount requiring advertisement and
17 competitive bidding or, in lieu of price quotations, a
18 memorandum shall be kept on file showing that fewer than three
19 qualified contractors exist in the market area within which it
20 is practicable to obtain quotations. A written record of
21 telephonic price quotations shall be made and shall contain at
22 least the date of the quotation, the name of the contractor and
23 the contractor's representative, the construction,
24 reconstruction, repair, maintenance or work which was the
25 subject of the quotation and the price. Written price
26 quotations, written records of telephonic price quotations and
27 memoranda shall be retained for a period of three years.
28 Section 5. Section 5 of the act, amended July 10, 1990
29 (P.L.392, No.93), is amended to read:
30 Section 5. Separate Bids for Plumbing, Heating, Ventilating
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1 and Electrical Work.--In the preparation for the erection,
2 construction and alteration of any public building of an
3 incorporated town, when the entire cost of such work shall
4 exceed [ten thousand dollars] twenty-five thousand dollars
5 subject to annual adjustment under section 2.1, the architect,
6 engineer or other person preparing such specifications shall
7 prepare separate specifications for the plumbing, heating,
8 ventilating and electrical work. The person or persons
9 authorized to enter into contracts for the erection,
10 construction or alteration of such public buildings shall
11 receive separate bids upon each of the said branches of work and
12 award the contract for the same to the lowest responsible bidder
13 for each of said branches.
14 Section 6. This act shall apply to contracts and purchases
15 advertised on or after January 1 of the year following the
16 effective date of this section.
17 Section 7. This act shall take effect immediately.
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