PRINTER'S NO. 2499
No. 1857 Session of 2005
INTRODUCED BY GINGRICH, HERMAN, LESCOVITZ, BIANCUCCI, HANNA,
ROSS, HARHAI, HICKERNELL, HARPER, KAUFFMAN, T. STEVENSON,
HENNESSEY, M. KELLER, PETRI, McNAUGHTON, ARMSTRONG, BALDWIN,
BOYD, CAPPELLI, DALLY, DENLINGER, DeWEESE, FRANKEL, GEIST,
HARRIS, HERSHEY, McILHATTAN, PHILLIPS, PICKETT, SCAVELLO AND
WATSON, JULY 3, 2005
REFERRED TO COMMITTEE ON LOCAL GOVERNMENT, JULY 3, 2005
AN ACT
1 Amending the act of February 1, 1966 (1965 P.L.1656, No.581),
2 entitled "An act concerning boroughs, and revising, amending
3 and consolidating the law relating to boroughs," further
4 providing for regulation of contracts, for evasion of
5 advertising requirements and for certain purchase contracts.
6 The General Assembly of the Commonwealth of Pennsylvania
7 hereby enacts as follows:
8 Section 1. Section 1402(a), (a.1) and (d) of the act of
9 February 1, 1966 (1965 P.L.1656, No.581), known as The Borough
10 Code, amended or added July 10, 1990 (P.L.383, No.90), December
11 18, 1996 (P.L.1156, No.176) and December 20, 1996 (P.L.1497,
12 No.193), are amended and the section is amended by adding a
13 subsection to read:
14 Section 1402. Regulation of Contracts.--(a) All contracts
15 or purchases in excess of [ten thousand dollars ($10,000)]
16 twenty-five thousand dollars ($25,000) subject to annual
17 adjustment under subsection (a.2), except those hereinafter
1 mentioned, shall not be made except with and from the lowest
2 responsible bidder after due notice in one newspaper of general
3 circulation in the borough, at least two times at intervals of
4 not less than three days where daily newspapers of general
5 circulation are available for such publication, in case of
6 weekly newspapers, such notice once a week for two successive
7 weeks. The first advertisement shall be published not more than
8 forty-five days and the second advertisement not less than ten
9 days prior to the date fixed for the opening of bids.
10 Advertisements for contracts or purchases shall also be posted
11 in a conspicuous place within the borough. Advertisements for
12 contracts and purchases shall contain the date, time and
13 location for opening of bids and shall state the amount of the
14 performance bond determined under subsection (c). The amount of
15 the contract shall in all cases, whether of straight sale price,
16 conditional sale, bailment lease, or otherwise, be the entire
17 amount which the borough pays to the successful bidder or his
18 assigns in order to obtain the services or property, or both,
19 and shall not be construed to mean only the amount which is paid
20 to acquire title or to receive any other particular benefit or
21 benefits of the whole bargain. In awarding contracts, council
22 shall have the right to take into consideration such other
23 factors as the availability, cost and quality of service.
24 (a.1) Written or telephonic price quotations from at least
25 three qualified and responsible contractors shall be requested
26 for all contracts that exceed [four thousand dollars ($4,000)]
27 ten thousand dollars ($10,000) subject to annual adjustment
28 under subsection (a.2) but are less than the amount requiring
29 advertisement and competitive bidding or, in lieu of price
30 quotations, a memorandum shall be kept on file showing that
20050H1857B2499 - 2 -
1 fewer than three qualified contractors exist in the market area
2 within which it is practicable to obtain quotations. A written
3 record of telephonic price quotations shall be made and shall
4 contain at least the date of the quotation, the name of the
5 contractor and the contractor's representative, the
6 construction, reconstruction, repair, maintenance or work which
7 was the subject of the quotation and the price. Written price
8 quotations, written records of telephonic price quotations and
9 memoranda shall be retained for a period of three years.
10 (a.2) (1) The Department of Labor and Industry shall
11 determine the percentage change in the Consumer Price Index for
12 All Urban Consumers for the twelve-month period ending September
13 30 of the calendar year in which this subsection becomes
14 effective, and for each successive twelve-month period
15 thereafter.
16 (2) The amount at which competitive bidding is required
17 under subsection (a) and the amount at which written or
18 telephonic price quotations are required under subsection (a.1)
19 shall be adjusted annually as follows:
20 (i) In the case of competitive bidding, the positive
21 percentage change, as determined in accordance with clause (1),
22 shall be multiplied by the amount applicable under subsection
23 (a) for the current year and the product thereof shall be added
24 to the amount applicable under subsection (a) for the current
25 year, with the result rounded to the nearest multiple of ten
26 dollars ($10).
27 (ii) In the case of written or telephonic price quotations,
28 the positive percentage change, as determined in accordance with
29 clause (1), shall be multiplied by the amount applicable under
30 subsection (a.1) for the current year and the product thereof
20050H1857B2499 - 3 -
1 shall be added to the amount applicable under subsection (a.1)
2 for the current year, with the result rounded to the nearest
3 multiple of ten dollars ($10).
4 (3) The annual determination required under clause (1) and
5 the calculation of the adjustments required under clause (2)
6 shall be made in the period between October 1 and November 15 of
7 the year following the effective date of this subsection, and
8 annually between October 1 and November 15 of each successive
9 year.
10 (4) The adjusted amounts obtained in accordance with clause
11 (2) shall become effective January 1 for the calendar year
12 following the year in which the determination required under
13 clause (1) is made.
14 (5) The Department of Labor and Industry shall give notice
15 in the Pennsylvania Bulletin prior to January 1 of each calendar
16 year of the annual percentage change determined in accordance
17 with clause (1) and the amounts, whether adjusted or unadjusted
18 in accordance with clause (2), at which competitive bidding is
19 required under subsection (a) and written or telephonic price
20 quotations are required under subsection (a.1) for the calendar
21 year beginning the first day of January after publication of the
22 notice.
23 * * *
24 (d) The contracts or purchases made by council, which shall
25 not require advertising, bidding or price quotations as
26 hereinbefore provided, are as follows:
27 (1) Those for maintenance, repairs or replacements for
28 water, electric light or public works of the borough, provided
29 they do not constitute new additions, extensions or enlargements
30 of existing facilities and equipment, but a bond may be required
20050H1857B2499 - 4 -
1 by council, as in other cases of work done;
2 (2) Those made for improvements, repairs and maintenance of
3 any kind, made or provided by any borough, through its own
4 employes: Provided, That all materials used for street
5 improvement, maintenance and/or construction in excess of [four
6 thousand dollars ($4,000)] the amount specified or adjusted
7 under subsection (a.1) be subject to the relevant price
8 quotation or advertising requirements contained herein;
9 (3) Those where particular types, models or pieces of new
10 equipment, articles, apparatus, appliances, vehicles or parts
11 thereof are desired by council, which are patented and
12 manufactured or copyrighted products;
13 (3.1) Those for used equipment, articles, apparatus,
14 appliances, vehicles or parts thereof being purchased from a
15 public utility.
16 (4) Those involving any policies of insurance or surety
17 company bonds; those made for public utility service under
18 tariffs on file with the Pennsylvania Public Utility Commission;
19 those made with another political subdivision, or a county, the
20 Commonwealth of Pennsylvania, the Federal Government, any agency
21 of the Commonwealth or the Federal Government, or any municipal
22 authority, including the sale, leasing or loan of any supplies
23 or materials by the Commonwealth or the Federal Government or
24 their agencies. The price thereof shall not be in excess of that
25 fixed by the Commonwealth, the Federal Government, or their
26 agencies;
27 (5) Those involving personal or professional services.
28 * * *
29 Section 2. Sections 1403(a) and 1405 of the act, amended
30 July 10, 1990 (P.L.383, No.90), are amended to read:
20050H1857B2499 - 5 -
1 Section 1403. Evasion of Advertising Requirements.--(a) No
2 member or members of council shall evade the provisions of
3 section 1402 hereof as to advertising for bids, by purchasing or
4 contracting for services and personal properties piecemeal for
5 the purpose of obtaining prices under [ten thousand dollars
6 ($10,000)] the amount specified or adjusted under section
7 1402(a) upon transactions, which transactions should, in the
8 exercise of reasonable discretion and prudence, be conducted as
9 one transaction amounting to more than [ten thousand dollars
10 ($10,000)] the amount specified or adjusted under section
11 1402(a). This provision is intended to make unlawful the evading
12 of advertising requirements by making a series of purchases or
13 contracts, each for less than the advertising requirement price,
14 or by making several simultaneous purchases or contracts, each
15 below said price, when, in either case, the transactions
16 involved should have been made as one transaction for one price.
17 Any members of council who so vote in violation of this
18 provision and who know that the transaction upon which they so
19 vote is or ought to be a part of a larger transaction and that
20 it is being divided in order to evade the requirements as to
21 advertising for bids, shall be jointly and severally subject to
22 surcharge for ten percent of the full amount of the contract or
23 purchase. Whenever it shall appear that a member of council may
24 have voted in violation of this section but the purchase or
25 contract on which he so voted was not approved by council, this
26 section shall be inapplicable.
27 * * *
28 Section 1405. Separate Bids for Plumbing, Heating,
29 Ventilating and Electrical Work.--In the preparation for the
30 erection, construction and alteration of any public building,
20050H1857B2499 - 6 -
1 when the entire cost of such work shall exceed [ten thousand
2 dollars ($10,000)] the amount specified or adjusted under
3 section 1402(a), the architect, engineer, or other person
4 preparing such specifications may, if so requested by the
5 borough council, prepare separate specifications for the
6 plumbing, heating, ventilating and electrical work. The person
7 or persons authorized to enter into contracts for the erection,
8 construction or alteration of such public buildings may, if such
9 separate specifications shall have been proposed, receive
10 separate bids upon each of the said branches of work and shall
11 thereupon award the contract for the same to the lowest
12 responsible bidder for each of said branches.
13 Section 3. This act shall apply to contracts and purchases
14 advertised after December 31 of the year in which this section
15 takes effect.
16 Section 4. This act shall take effect immediately.
E20L08VDL/20050H1857B2499 - 7 -