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DEPARTMENT OF
LABOR AND INDUSTRY

Consumer Price Index Adjustment of Base Amounts on Bids Effective January 1, 2013

[42 Pa.B. 7616]
[Saturday, December 15, 2012]

 Each year the Department of Labor and Industry (Department) is required by the following listed statutes to publish changes to the base amounts triggering the requirement for public, telephonic bids or separate bids for certain contracts, or both. The Department is required to announce the percentage change in the Consumer Price Index for All Urban Consumers (CPI-U): All items CPI-U for the United States city average for the 12-month period ending September 30 of each year. The Department utilizes the most current nonseasonally adjusted series, as published by the United States Bureau of Labor Statistics (BLS), which at present uses 1982-1984 as the index base period (set equal to 100). The percentage change for the 12-month period ending September 30, 2012, is 2.0%.

 The change to the base rate is determined as follows:

 1) Calculate the percentage change in CPI-U (I) from September 2011 to September 2012. This is derived as I = (CPI12 - CPI11) / CPI11, where the subscripts refer to September 2012 and 2011 values of CPI-U. As reported by the BLS these values are (231.407 – 226.889) / 226.889 = 4.518 / 226.889 = 1.9913%, which when rounded to 1 decimal place = 2.0%. (This was also reported as 2.0% in Table A of the BLS news release on the Consumer Price Index Summary for September 2012).

 2) The legislation puts a floor of 0 and a cap of 3% on the percentage change to be used in the calculations (technically these restrictions are on the Preliminary Adjusted Base (PAB), defined in step 4, however this is mathematically equivalent). Letting PC be the truncated value of the percentage change to be used in the adjustment formula, it is:

 a) PC = I, for 0 <= I <= 3%,

 b) PC = 0, for I < 0 and

 c) PC = 3%, for I > 3%.

 3) Let the initial base value set in the legislation be designated as B and the product of B and PC (determined previously) be P. (There are different values of the base depending on the entity and the type of bid, so technically B could be designated with 2 subscripts. Since the Department will illustrate for some specific one, the subscripts are omitted.) Then P = PC*B. A common value for the base amount for a public bid is $18,500. Letting B = 18,500 as an example, it would be P = 18,500 *2.0% = 370.

 4) Then the Preliminary adjusted base, PAB = P + B, which in this case reduces to 370 + 18,500 = 18,870.

 5) The final adjusted base amount, FAA, (which is used as the limit for the next year, that is 2013), is the PAB rounded to the nearest 100. Therefore the FAA = 18,900.

Final Adjusted Base Amount for use in 2013
Entity and Legislation Public Bid Written / Telephonic
Bid
Separate Bids Concessions
The County Code (16 P. S. §§ 1801—1803 and 2317) 18,900.00 10,200.00 18,900.00
Second Class County Code (16 P. S. §§ 3112, 5001, 5511-A and 5517) 18,900.00 10,200.00 18,900.00
Public School Code (24 P. S. §§ 1-119, 7-751 and 8-807.1) 18,900.00 10,200.00
Public School Code, Thaddeus Stevens College of Technology (24 P. S. § 19-1913.1-B) 18,900.00
Public School Code, State System of Higher Education (24 P. S. § 20.2003-A.1); HB 2325 (pending) [3] 18,900.00
Prevention and Control of Floods, Flood Control Districts (32 P. S. §§ 662 and 662.1) 18,900.00
Housing Authorities (35 P. S. § 1551) 18,900.00 10,200.00
Intergovernmental Cooperation (53 Pa.C.S. §§ 2308, 2311 and 2312) 18,900.00 10,200.00
General Municipal Law, Flood Control (53 P. S. § 2863) 18,900.00 10,200.00
Political Subdivisions Joint Purchases Law (53 P. S. § 5432) 18,900.00 10,200.00
Parking Authorities (53 Pa.C.S. § 5511) 25,500.00 10,200.00
Municipal Authorities (53 Pa.C.S. § 5614) 18,900.00 10,200.00
Public Auditorium Authorities Law (53 P. S. § 2385); HB 2324 (pending) [4] 18,900.00 10,200.00
Third Class City Code (53 P. S. §§ 36901, 36902, 36903.1 and 36909) 18,900.00 18,900.00
The Borough Code (53 P. S. §§ 46402 and 46405) 18,900.00 10,200.00 18,900.00
Incorporated Towns (53 P. S. §§ 53202, 53202.1, 53203, 53203.1 and 53205) 18,900.00 10,200.00 18,900.00
First Class Township Code (53 P. S. §§ 56802, 56803 and 56805) 18,900.00 10,200.00 18,900.00
Second Class Township Code (53 P. S. §§ 68102 and 68107) 18,900.00 10,200.00 18,900.00
Metropolitan Transportation Authorities (74 Pa.C.S. § 1750) 25,500.00 18,900.00

JULIA K. HEARTHWAY, 
Secretary

[Pa.B. Doc. No. 12-2440. Filed for public inspection December 14, 2012, 9:00 a.m.]



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