Under the Uniform Municipal Contracting Law, the contracting procedures a local government must follow depend on the estimated amount of the contract.
Specifically, if the amount of a contract is estimated to exceed $25,000, but not to exceed $100,000, the contract may be made either upon sealed bids or by direct negotiation. If direct negotiations are used, then two or more quotes for the purchase or sale must be obtained when possible. The quotations must be kept on file for a period of at least one year.
If the amount of the contract is estimated to be $25,000 or less, the governing body can then decide to use quotations or the open market. If the contract is made upon quotations, it must then be based, so far as practicable, on at least two quotations that must be kept on file for at least one year.
The Office of the State Auditor has published two Statements of Position on the topic. The Statement on City Bidding and Contract Requirements can be found at:
The Statement on County Bidding and Contract Requirements can be accessed at:
Date this Avoiding Pitfall was most recently published: 08/31/2012