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Annual Adjustment to Bid Threshold for Contracts

Letter Head: Tom Torlakson, State Superintendent of Public Instruction, California Department of Education

December 20, 2013

Dear County and District Superintendents and Chief Business Officials, and Charter School Administrators:

ANNUAL ADJUSTMENT TO BID THRESHOLD FOR CONTRACTS
AWARDED BY SCHOOL DISTRICTS

Public Contract Code (PCC) Section 20111(a) [http://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=PCC&sectionNum=20111] External link opens in new window or tab. requires school district governing boards to competitively bid and award any contracts involving an expenditure of more than $50,000, adjusted for inflation, to the lowest responsible bidder. Contracts subject to competitive bidding include:

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

  2. Services that are not construction services.

  3. Repairs, including maintenance as defined in PCC Section 20115, that are not public projects as defined in PCC Section 22002(c) [http://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=PCC&sectionNum=22002] External link opens in new window or tab..

The State Superintendent of Public Instruction (SSPI) is required to annually adjust the $50,000 amount specified in PCC Section 20111(a) to reflect the percentage change in the annual average value of 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 inflation adjustment is rounded to the nearest one hundred dollars ($100).

Pursuant to the above calculation, and effective January 1, 2014, the SSPI has determined that the inflation adjusted bid threshold will increase by $700, from $83,400 to $84,100. Shown below are the inflation adjusted bid thresholds for the current and two prior years.

Calendar Year Bid Threshold Percentage Change in Implicit Price Deflator

2012

$81,000

2.72%

2013

$83,400

2.99%

2014

$84,100

.858%

Also note that public projects as defined in PCC Section 22002(c), such as construction or reconstruction of publicly owned facilities, have a lower bid threshold of $15,000 that is not adjusted for inflation. For more information on bidding requirements for all projects, refer to PCC sections 20110 to 20118.4.

This letter (with links to the PCC sections cited above) is posted on the Office of Financial Accountability and Information Services Web page at http://www.cde.ca.gov/fg/ac/co/.

If you have questions regarding this subject, please contact the Office of Financial Accountability and Information Services by phone at 916-322-1770 or by e-mail at sacsinfo@cde.ca.gov.

Sincerely,

Peter Foggiato, Director
School Fiscal Services Division

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