Annual Adjustment to Threshold for Competitively Bid Contracts

Under Public Contract Code sections 20111 and 20651, school and community college districts must competitively bid and award a contract involving the expenditure of more than $50,000, adjusted for inflation, to the lowest responsible bidder. The threshold for the bidding requirement is increased annually to reflect the change in the Implicit Price Deflator for State and Local Government Purchases of Goods and Services for the United States, as published by the United States Department of Commerce for the 12-month period ending in the prior fiscal year. The adjustment is not the same as the revenue limit cost-of-living adjustment.

On January 1, 2013, a new bid threshold for contracts which must be competitively bid became effective. The State Superintendent of Public Instruction and the Board of Governors of the California Community Colleges have raised the bid threshold by 2.99% to $83,400 for the following contracts:

1.  Purchase of equipment, materials, or supplies to be furnished, sold, or leased to a district.

2.  Services that are not construction services.

3.  Repairs, including maintenance as defined in Public Contract Code sections 20115 and 20656, that are not public projects as defined in Public Contract Code Section 22002(c).

The State Superintendent of Instruction’s December 20, 2012 letter effectuating these changes for school districts is posted on the Office of Financial Accountability and Information Services Web page. The California Community College Chancellor’s Office’s January 3, 2013 letter effectuating these changes in relation to community colleges is available through their website.

Note that the current $15,000 threshold for construction contracts under Public Contract Code sections 20111(b) and 20651 (b) remains unchanged. This threshold is not adjusted for inflation.

School and community college districts must not apply the adjusted bid threshold to repair projects which will qualify as public projects under Public Contract Code Section 22002(c). We recommend that districts consult legal counsel to confirm whether a particular project falls within the definition of a repair project, and if so, whether the repair project would be considered a public project.

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