THE GENERAL ASSEMBLY OF PENNSYLVANIA

SENATE BILL

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

REFERRED TO LOCAL GOVERNMENT, JANUARY 26, 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 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 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.  Adjustment.--(a)  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.

(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 every five years 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 five-year period and the product

thereof shall be added to the amount applicable under section 2

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

nearest multiple of one hundred 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 five-year period and the

product thereof shall be added to the amount applicable under

section 3.1 for the current five-year period, with the result

rounded to the nearest multiple of one hundred dollars.

(c)  The 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

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 five-

year period 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 in which the 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 five-year period 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 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

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] seven

thousand dollars subject to 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 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.