Public Contracts Law

The public contracts law regulates the purchase of goods and services by municipalities in the United States. Although this law is very confusing, all municipality officials need to be aware of the law details, as it will help them to ensure that public contracts are awarded in a fair and correct manner. By following the process stipulated under this law, the municipality buys the required goods and services at the lowest bid cost, thus enabling get to make optimal use of the taxpayer’s money. Also, not only does this law specify purchase procedure, it also lays down the manner of sale or disposition of any property belonging to the municipal body which is not being used anymore.

Bidding threshold under the public contracts law

The public contracts law has fixed a bidding threshold and contracts above this limit have to be awarded through public bidding. However, it does provide an alternative process called ‘competitive contracting’ for other contracts. There are also some other contracts wherein public bidding is not required even if the contract amount is above the bidding threshold. For example, contracts for professional services, contracts for extraordinary services and contracts with government entities.

Different states have different bidding thresholds. For instance, in New Jersey, the bidding threshold is $21,000. Generally, this amount is modified every five years.

Purchasing Agent

Under the public contracts law, the municipal body can have a purchasing agent for the purpose of purchase. It can also constitute a purchasing department and assign to it the responsibility of the purchase process, including advertising for the bids and receiving the bids.

Bid Rejection

All the bids made can be rejected by the municipal body in certain situations:

  • When the lowest bid exceeds the estimated cost of the project
  • When it is decided that the project will be abandoned
  • When the project specifications change
  • When there is a violation of the public contracts law

As mentioned earlier, this law can be quite confusing. So, municipal officials should contact the Municipal attorney in the case of any doubts about the public contracts law.

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