HOUSE AMENDED

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, PICCOLA, WARD AND BROWNE, JANUARY 26, 2011

AS REPORTED FROM COMMITTEE ON LOCAL GOVERNMENT, HOUSE OF REPRESENTATIVES, AS AMENDED, OCTOBER 4, 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.  Sections 2308 and 2311, 2311 and 2312 of Title 53

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of the Pennsylvania Consolidated Statutes are amended to read:

§ 2308.  Bids for certain joint purchases.

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

more than [$10,000] a the base amount of $18,500, subject to

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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)  Adjustments.--Adjustments to the base amounts amount 

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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 12-month period

ending September 30, 2012, and for each successive 12-month

period thereafter.

(2)  If the department determines that there is no

positive percentage change, then no adjustment to the base

amounts amount shall occur for the relevant time period

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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 the base

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amount and the products product shall be added to the

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base amounts amount, respectively, and the sums shall be

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preliminary adjusted amounts amount.

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(ii)  The preliminary adjusted amounts amount shall

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be rounded to the nearest $100 to determine the final

adjusted base amounts amount for purposes of subsection

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(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 amount and

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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 $100 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)  The annual increase in the preliminary adjusted base

amounts obtained under paragraphs (3) and (4) shall not

exceed 3%.

§ 2311.  Written or telephonic price quotations required.

(a)  Amount.--Written or telephonic price quotations from at

least three qualified and responsible contractors shall be

requested for all contracts [that exceed $4,000] in excess of

the base amount of $10,000, subject to adjustment under

subsection (b), 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.

(b)  Adjustments.--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 12-month period

ending September 30, 2012, and for each successive 12-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 $100 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 $100 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

written or telephonic price quotations bids are required

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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 

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amount under this subsection for the ensuing calendar year.

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(8)  The annual increase in the preliminary adjusted base

amounts obtained under paragraphs (3) and (4) shall not

exceed 3%.

§ 2312.  Division of transactions provided.

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No local government shall evade the provisions of section

2308 (relating to bids for certain joint purchases) as to

advertising for bids or purchasing materials or contracting for

services piecemeal for the purpose of obtaining prices under

[$10,000] the base amount of $18,500 subject to adjustment under

section 2308(b) (relating to bids for certain joint purchases) 

upon transactions which should in the exercise of reasonable

discretion and prudence be conducted as one transaction

amounting to more than [$10,000] the base amount of $18,500

subject to adjustment under section 2308(b). This provision is

intended to make unlawful the practice of evading 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 such

price when in either case the transaction involved should have

been made as one transaction for one price.

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] in excess of the

base amount of $10,000, 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.--Adjustments to the base amounts

specified under subsections (a), (b) and (c) 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 12-month period

ending September 30, 2012, and for each successive 12-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 $100 to determine the final

adjusted base amounts for purposes of subsections (a),

(b) and (c).

(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 $100 to determine the new final adjusted base

amounts for purposes of subsections (a), (b) and (c).

(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) or (b)

and written or telephonic price quotations are required under

subsection (c), 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)  The annual increase in the preliminary adjusted base

amounts obtained under paragraphs (3) and (4) shall not

exceed 3%.

* * *

(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] a base

amount of $18,500, 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 with

a base price costing at least [$10,000] $18,500, 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] in excess of the

base amount of $10,000, 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.--Adjustments to the base amounts

specified under subsections (a)(1), (b) and (c) 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 12-month period

ending September 30, 2012, and for each successive 12-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 $100 to determine the final

adjusted base amounts for purposes of subsections (a)(1),

(b) and (c).

(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 $100 to determine the new final adjusted base

amounts for purposes of subsections (a)(1), (b) and (c).

(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)(1) and

(b) and written or telephonic price quotations are required

under subsection (c), 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)  The annual increase in the preliminary adjusted base

amounts obtained under paragraphs (3) and (4) shall not

exceed 3%.

* * *

(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 with a base

price under [$10,000] $18,500, 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] the base amount of $18,500,

subject to adjustment under subsection (l), over the period for

which the concession is granted.

(l)  Adjustments.--Adjustments to the base amounts specified

under subsections (b), (d) and (k) 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 12-month period

ending September 30, 2012, and for each successive 12-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 $100 to determine the final

adjusted base amounts for purposes of subsections (b),

(d) and (k).

(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 $100 to determine the new final adjusted base

amounts for purposes of subsections (b), (d) and (k).

(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 (b) or (k)

and the amount at which competitive bidding may apply to

purchase sales under subsection (d), 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)  The annual increase in the preliminary adjusted base

amounts obtained under paragraphs (3) and (4) shall not

exceed 3%.

Section 4.  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 5.  This act shall take effect immediately.