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Municipal Law Update: Proposed Government Bid Limits Package

Earlier this year Representative Mark K. Keller (R – Perry and part of Franklin Counties) sponsored the Government Bid Limits Package to overhaul the manner in which governmental entities (including municipalities, counties, school districts and the Commonwealth) bid contracts. Since 1990, State and local governments have had to seek at least three (3) telephonic quotes for purchases greater than $4,000 and accept bids for purchases starting at $10,000. While the intent of this process is to encourage competition among governmental contractors and to guard against patronage, this process can be very time consuming and expensive. Further, the dollar thresholds that were set in 1990 have not accounted for the impact of inflation on governmental purchasing over the last twenty-one (21) years.

Generally, the Government Bid Limits Package seeks to increase the bidding requirement threshold from $10,000 to $25,000. Similarly, the threshold for quote gathering would be increased to $10,000; meaning that governmental purchases of $9,999.99 or less would be exempt from the bidding process. Additionally, the proposed Bid Limits Package would task the Pennsylvania Department of Labor and Industry with periodically adjusting the bidding thresholds to reflect changes in the Consumer Price Index.

While the bidding exemption of contracts for less than $10,000 may be distressing to some who fear this may lead to an increase in governmental waste and favoritism, the prohibition against large“piecemeal projects”, the Sunshine Act and other legislative protections should minimize these concerns.

As of the publication of this article, the Bid Limits Packaage was passed by the House and has been referred to the State Senate’s Local Government Committee for consideration.

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