Purchasing and Procurement

Plain English Breakdown

The official source material does not provide information on the consequences of noncompliance with these new rules, nor does it specify how this change will affect bid numbers near the threshold limit.

Changes to Competitive Bidding Requirements for Local Governments

This bill modifies how local governments can purchase items by allowing them to use written quotations instead of competitive bids under certain conditions.

What This Bill Does

• Requires local governments to obtain at least three written quotations when purchasing items that cost more than 40% but less than the set threshold for nonemergency, nonproprietary purchases.
• Updates existing laws to reflect these changes in purchasing procedures.

Who It Names or Affects

• Local governments and their purchasing departments
• Vendors who sell goods or services to local governments

Terms To Know

competitive sealed bids

A process where vendors submit sealed proposals for a contract, and the lowest bidder wins.

threshold

The maximum amount of money before public bidding is required.

Limits and Unknowns

• Does not specify what happens if local governments do not follow these new rules.
• It's unclear how this change will affect the number of bids received for purchases near the threshold limit.

Official Summary Text

Subject to certain exceptions, the County Purchasing Law of 1983 requires that a
ll purchases and leases or lease-purchase agreements be made or entered
into only after public advertisement and competitive bid
. One exception to the public advertisement and competitive bidding requirement is for p
urchases costing less than the maximum applicable threshold over which public advertising and sealed competitiv
e bids or proposals are required for nonemergency, nonproprietary purchases as established
by resolution or ordinance of the applicable governing body
.

This bill specifies that a c
hange
in
the amount of the applicable threshold over which public advertise
ment and sealed competitive bids or proposals are required must be made by resolution of the governing body
.

Under present law, a local governing body
having centralized purchasing authority with a full-time purchasing agent may, by resolution or ordinan
ce of its governing body, increase the threshold over which public advertisement and sealed competitive bids or proposals are required to an amount not to exceed $50,000 for nonemergency,
n
onproprietary purchases
. A
local governmental entity having either
non-centralized purchasing authority or centralized purchasing authority but not a full-time purchasing agent
is authorized to
, by resolution or ordinance of its governing body, increase the threshold over which public advertisement and sealed competitive
bids or proposals are required to an amount not to exceed $25,000 for nonemergency, nonproprietary purchases.

The County Purchasing Law of 1983 also provides that
purchases, leases, or lease-purchase agreements with expenditures of less than the maximum
applicable threshold established
by the local governing body
in a fiscal year may be made in the open market without newspaper notice, but must, wherever possible, be based upon at least three competitive bids.
This bill replaces the requirement for thre
e competitive bids with
three written quotations
,
when possible, for purchases costing less than the bid threshold established
by the local governing body
but more than 40% of such bid threshold, or some lower amount as may be established by the governing
body by resolution.
This bill makes the same changes to the procedure for purchases less than the threshold under the Municipal Purchasing Law of 1983.

Current Bill Text

SENATE BILL 369
By Briggs

HOUSE BILL 742
By McKenzie

HB0742
001993
- 1 -

AN ACT to amend Tennessee Code Annotated, Section 5-
14-204; Section 5-14-205 and Section 6-56-305,
relative to competitive sealed bids.

BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF TENNESSEE:
SECTION 1. Tennessee Code Annotated, Section 5-14-204(1), is amended by adding
the following to the end of the subdivision:
Changes to the amount of the applicable threshold over which public
advertisement and sealed competitive bids or proposals are required must be
made by resolution of the governing body in accordance with § 12-3-1212.
SECTION 2. Tennessee Code Annotated, Section 5-14-205, is amended by deleting the
section and substituting instead:
All purchases, leases, or lease-purchase agreements with expenditures of less
than the maximum applicable competitive sealed bid threshold established pursuant to §
12-3-1212 in a fiscal year may be made in the open market without publishing a notice in
a newspaper of general circulation. At least three (3) written quotations are required,
when possible, for purchases costing less than the bid threshold established under § 12-
3-1212(a) or (b), but more than forty percent (40%) of such bid threshold, or some lower
amount as may be established by the governing body by resolution.
SECTION 3. Tennessee Code Annotated, Section 6-56-305, is amended by deleting the
section and substituting instead:
All purchases, leases, or lease-purchase agreements with expenditures of less
than the maximum applicable competitive sealed bid threshold established pursuant to §
12-3-1212 in a fiscal year may be made in the open market without publishing a notice in

- 2 - 001993

a newspaper of general circulation. At least three (3) written quotations are required,
when possible, for purchases costing less than the bid threshold established under § 12-
3-1212(a) or (b), but more than forty percent (40%) of such bid threshold, or some lower
amount as may be established by the governing body in an ordinance.
SECTION 4. This act takes effect upon becoming a law, the public welfare requiring it.