Effective January 1, 2012, local governments must advertise for low bids for contracts and purchases over $18,500. The previous legislation set the minimum threshold at $10,000. Similar legislation was adopted for the Townships, Boroughs, Counties and School Districts in Pennsylvania. The legislation permits telephonic quotes from three qualified and responsible contractors for purchases and contracts between $10,000 and $18,500. There are no solicitations necessary for purchases or contracts under $10,000.
The goal of any bid limit threshold is to provide the appropriate balance between speed and efficiency on one hand and competition, pricing, and transparency on the other. Proponents of the new legislation say the new limit will save time and money because the bidding procedures are cumbersome and the money expended preparing bid documents and advertising is not warranted for low dollar purchases. Opponents argue that competitive bidding is the only way to ensure prudent use of public monies and facilitate the acquisition of goods and services at the lowest possible cost.
Regardless of which way you lean on this issue, Pennsylvania’s thresholds are still among the lowest in the country. This is the first increase since 1990. To prevent this threshold from becoming stagnant, the new legislation provides an annual escalator based upon Consumer Price Index which takes effect for the 12-month period ending September 30, 2012.