PRIOR PRINTER'S NO. 2499 PRINTER'S NO. 3244
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,
WATSON AND CREIGHTON, JULY 3, 2005
AS REPORTED FROM COMMITTEE ON LOCAL GOVERNMENT, HOUSE OF
REPRESENTATIVES, AS AMENDED, DECEMBER 6, 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.1141, NO.171), December 18, 1996 (P.L.1156,
12 No.176) and December 20, 1996 (P.L.1497, No.193), are amended
13 and the section is amended by adding a 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) EIGHTEEN THOUSAND DOLLARS <--
17 ($18,000) subject to annual adjustment under subsection (a.2),
1 except those hereinafter mentioned, shall not be made except
2 with and from the lowest responsible bidder after due notice in
3 one newspaper of general circulation in the borough, at least
4 two times at intervals of not less than three days where daily
5 newspapers of general circulation are available for such
6 publication, in case of weekly newspapers, such notice once a
7 week for two successive weeks. The first advertisement shall be
8 published not more than forty-five days and the second
9 advertisement not less than ten days prior to the date fixed for
10 the opening of bids. Advertisements for contracts or purchases
11 shall also be posted in a conspicuous place within the borough.
12 Advertisements for contracts and purchases shall contain the
13 date, time and location for opening of bids and shall state the
14 amount of the performance bond determined under subsection (c).
15 The amount of the contract shall in all cases, whether of
16 straight sale price, conditional sale, bailment lease, or
17 otherwise, be the entire amount which the borough pays to the
18 successful bidder or his assigns in order to obtain the services
19 or property, or both, and shall not be construed to mean only
20 the amount which is paid to acquire title or to receive any
21 other particular benefit or benefits of the whole bargain. In
22 awarding contracts, council shall have the right to take into
23 consideration such other factors as the availability, cost and
24 quality of service.
25 (a.1) Written or telephonic price quotations from at least
26 three qualified and responsible contractors shall be requested
27 for all contracts that exceed [four thousand dollars ($4,000)]
28 ten thousand dollars ($10,000) SEVEN THOUSAND DOLLARS ($7,000) <--
29 subject to annual adjustment under subsection (a.2) but are less
30 than the amount requiring advertisement and competitive bidding
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1 or, in lieu of price quotations, a memorandum shall be kept on
2 file showing that fewer than three qualified contractors exist
3 in the market area within which it is practicable to obtain
4 quotations. A written record of telephonic price quotations
5 shall be made and shall contain at least the date of the
6 quotation, the name of the contractor and the contractor's
7 representative, the construction, reconstruction, repair,
8 maintenance or work which was the subject of the quotation and
9 the price. Written price quotations, written records of
10 telephonic price quotations and memoranda shall be retained for
11 a period of three years.
12 (a.2) (1) The Department of Labor and Industry shall <--
13 determine the percentage change in the Consumer Price Index for
14 All Urban Consumers for the twelve-month period ending September
15 30 of the calendar year in which this subsection becomes
16 effective, and for each successive twelve-month period
17 thereafter.
18 (A.2) (1) ANNUALLY, BEGINNING WITH THE YEAR IN WHICH THIS <--
19 SUBSECTION BECOMES APPLICABLE TO CONTRACTS AND PURCHASES, THE
20 DEPARTMENT OF LABOR AND INDUSTRY SHALL CALCULATE THE PERCENTAGE
21 CHANGE IN THE CONSUMER PRICE INDEX FOR ALL URBAN CONSUMERS (CPI-
22 U) FOR THE UNITED STATES CITY AVERAGE FOR ALL ITEMS AS PUBLISHED
23 BY THE UNITED STATES DEPARTMENT OF LABOR, BUREAU OF LABOR
24 STATISTICS, FOR THE TWELVE-MONTH AVERAGE ENDING IN SEPTEMBER OF
25 THE PRIOR YEAR.
26 (2) The amount at which competitive bidding is required
27 under subsection (a) and the amount at which written or
28 telephonic price quotations are required under subsection (a.1)
29 shall be adjusted annually as follows:
30 (i) In the case of competitive bidding, the positive
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1 percentage change, as determined in accordance with clause (1),
2 shall be multiplied by the amount applicable under subsection
3 (a) for the current year and the product thereof shall be added
4 to the amount applicable under subsection (a) for the current
5 year, with the result rounded to the nearest multiple of ten
6 dollars ($10).
7 (ii) In the case of written or telephonic price quotations,
8 the positive percentage change, as determined in accordance with
9 clause (1), shall be multiplied by the amount applicable under
10 subsection (a.1) for the current year and the product thereof
11 shall be added to the amount applicable under subsection (a.1)
12 for the current year, with the result rounded to the nearest
13 multiple of ten dollars ($10).
14 (3) The annual determination required under clause (1) and
15 the calculation of the adjustments required under clause (2)
16 shall be made in the period between October 1 and November 15 of
17 the year following the effective date of this subsection, and
18 annually between October 1 and November 15 of each successive
19 year.
20 (4) The adjusted amounts obtained in accordance with clause
21 (2) shall become effective January 1 for the calendar year
22 following the year in which the determination required under
23 clause (1) is made.
24 (5) The Department of Labor and Industry shall give notice
25 in the Pennsylvania Bulletin prior to January 1 of each calendar
26 year of the annual percentage change determined in accordance
27 with clause (1) and the amounts, whether adjusted or unadjusted
28 in accordance with clause (2), at which competitive bidding is
29 required under subsection (a) and written or telephonic price
30 quotations are required under subsection (a.1) for the calendar
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1 year beginning the first day of January after publication of the
2 notice.
3 * * *
4 (d) The contracts or purchases made by council, which shall
5 not require advertising, bidding or price quotations as
6 hereinbefore provided, are as follows:
7 (1) Those for maintenance, repairs or replacements for
8 water, electric light or public works of the borough, provided
9 they do not constitute new additions, extensions or enlargements
10 of existing facilities and equipment, but a bond may be required
11 by council, as in other cases of work done;
12 (2) Those made for improvements, repairs and maintenance of
13 any kind, made or provided by any borough, through its own
14 employes: Provided, That all materials used for street
15 improvement, maintenance and/or construction in excess of [four
16 thousand dollars ($4,000)] the amount specified or adjusted
17 under subsection (a.1) be subject to the relevant price
18 quotation or advertising requirements contained herein;
19 (3) Those where particular types, models or pieces of new
20 equipment, articles, apparatus, appliances, vehicles or parts
21 thereof are desired by council, which are patented and
22 manufactured or copyrighted products;
23 (3.1) Those for used equipment, articles, apparatus,
24 appliances, vehicles or parts thereof being purchased from a
25 public utility.
26 (4) Those involving any policies of insurance or surety
27 company bonds; those made for public utility service under
28 tariffs on file with the Pennsylvania Public Utility Commission;
29 those made with another political subdivision, or a county, the
30 Commonwealth of Pennsylvania, the Federal Government, any agency
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1 of the Commonwealth or the Federal Government, or any municipal
2 authority, including the sale, leasing or loan of any supplies
3 or materials by the Commonwealth or the Federal Government or
4 their agencies. The price thereof shall not be in excess of that
5 fixed by the Commonwealth, the Federal Government, or their
6 agencies;
7 (5) Those involving personal or professional services.
8 * * *
9 Section 2. Sections 1403(a) and 1405 of the act, amended
10 July 10, 1990 (P.L.383, No.90), are amended to read:
11 Section 1403. Evasion of Advertising Requirements.--(a) No
12 member or members of council shall evade the provisions of
13 section 1402 hereof as to advertising for bids, by purchasing or
14 contracting for services and personal properties piecemeal for
15 the purpose of obtaining prices under [ten thousand dollars
16 ($10,000)] the amount specified or adjusted under section
17 1402(a) upon transactions, which transactions should, in the
18 exercise of reasonable discretion and prudence, be conducted as
19 one transaction amounting to more than [ten thousand dollars
20 ($10,000)] the amount specified or adjusted under section
21 1402(a). This provision is intended to make unlawful the evading
22 of advertising requirements by making a series of purchases or
23 contracts, each for less than the advertising requirement price,
24 or by making several simultaneous purchases or contracts, each
25 below said price, when, in either case, the transactions
26 involved should have been made as one transaction for one price.
27 Any members of council who so vote in violation of this
28 provision and who know that the transaction upon which they so
29 vote is or ought to be a part of a larger transaction and that
30 it is being divided in order to evade the requirements as to
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1 advertising for bids, shall be jointly and severally subject to
2 surcharge for ten percent of the full amount of the contract or
3 purchase. Whenever it shall appear that a member of council may
4 have voted in violation of this section but the purchase or
5 contract on which he so voted was not approved by council, this
6 section shall be inapplicable.
7 * * *
8 Section 1405. Separate Bids for Plumbing, Heating,
9 Ventilating and Electrical Work.--In the preparation for the
10 erection, construction and alteration of any public building,
11 when the entire cost of such work shall exceed [ten thousand
12 dollars ($10,000)] the amount specified or adjusted under
13 section 1402(a), the architect, engineer, or other person
14 preparing such specifications may, if so requested by the
15 borough council, prepare separate specifications for the
16 plumbing, heating, ventilating and electrical work. The person
17 or persons authorized to enter into contracts for the erection,
18 construction or alteration of such public buildings may, if such
19 separate specifications shall have been proposed, receive
20 separate bids upon each of the said branches of work and shall
21 thereupon award the contract for the same to the lowest
22 responsible bidder for each of said branches.
23 Section 3. This act shall apply to contracts and purchases
24 advertised after December 31 of the year in which this section
25 takes effect.
26 Section 4. This act shall take effect immediately.
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