SENATE BILL REPORT
SB 6689
BYSenators Rinehart and Saling
Raising state purchasing bid limits.
Senate Committee on Governmental Operations
Senate Hearing Date(s):January 29, 1990
Senate Staff:Rod McAulay (786-7754)
AS OF JANUARY 25, 1990
BACKGROUND:
Insofar as practicable, the purchase of goods and services by the state must be based on competitive bids in a formal sealed bid procedure. The exceptions to this requirement include purchases not exceeding $5,000. Purchases over $400 and under $5,001 may be made without utilizing the sealed bid process, but the buyer must obtain quotations by telephone or in writing to assure a competitive price. Purchases up to $400 may be made directly without any competitive bids. To adjust for inflation, the $400 limit may be raised, in increments, up to a maximum of $800 on approval of ten of the twelve members of the State Supply Management Advisory Board.
The $5,000 limit may be adjusted by the Office of Financial Management, and must be adjusted for inflation on July 1 of each odd-numbered year. The next mandatory adjustment will be in 1991.
The sealed bid process requires giving notice to an approved list of suppliers with appropriate response time. It is believed that this process is not cost effective for some purchasers who make frequent buys in the $5,000 to $10,000 range.
It is believed that it would be more cost effective to increase the $400 limit on direct buys without any competitive solicitations to $1,000 with a $2,000 inflationary cap on future increases approved by the State Supply Management Advisory Board.
SUMMARY:
Formal sealed bidding is not necessary for purchases by the state not exceeding $10,000 or subsequent limits set by OFM. Competitive bids need not be obtained for purchases up to $1,000. This $1,000 limit may be increased in increments to adjust for inflation to a maximum of $2,000 on approval of ten of the twelve members of the State Supply Management Advisory Board.
Appropriation: none
Revenue: none
Fiscal Note: requested