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Annual Adjustment to Bid Threshold for Contracts

California Department of Education
Official Letter
California Department of Education
Official Letter
December 14, 2016

Dear County and District Superintendents, County and District 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) 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).

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, 2017, the SSPI has determined that the inflation adjusted bid threshold will increase by $500, from $87,800 to $88,300. 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

2015

$86,000

2.26%

2016

$87,800

 2.12%

2017
$88,300
.626%


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 is posted on the Office of Financial Accountability and Information Services Correspondence 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

Last Reviewed: Wednesday, December 28, 2016

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