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DEPARTMENT OF LABOR AND INDUSTRY

Consumer Price Index Adjustment of Base Amounts on Bids Effective January 1, 2014

[43 Pa.B. 7352]
[Saturday, December 14, 2013]

 Each year the Department of Labor and Industry (Department) is required by the following statutes to publish changes to the base amounts triggering the requirement for public bids, 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, 2013, is 1.2%.

 The change to the base rate is determined as follows:

 1) Calculate the percentage change in CPI-U (I) from September 2012 to September 2013. This is derived as I = (CPI13 − CPI12) / CPI12, where the subscripts refer to September 2013 and 2012 values of CPI-U. As reported by the BLS these values are (234.149 − 231.407) / 231.407 = 2.742 / 231.407 = 1.1849%, which when rounded to 1 decimal place = 1.2%. (This was also reported as 1.2% in Table A of the BLS news release on the Consumer Price Index Summary for September 2013.)

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

 a) PC = I, for 0 <= I <= 3%,

 b) PC = 0, for I < 0 and

 c) PC = 3%, for I > 3%.

 3) The base value (either original for new legislation or the prior year's PAB) is designated as B and the product of B and PC (determined previously) is 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. For illustration purposes, the subscripts are omitted.) Then P = PC*B. A common value for the base amount in 2013 for a public bid is $18,870. (The other two prior PABs, which are this year's bases for a variety of bid types, were $10,200 and $25,500.) For example, using B = 18,870, results in P = 18,870 *1.2% = 226.44.

 4) Then the preliminary adjusted base, PAB = P + B, which reduces to 226.44 + 18,870 = 19,096.44.

 5) The final adjusted base amount, FAA, (which is used as the limit for the next year, that is 2014), is the PAB rounded to the nearest 100. Therefore the FAA = 19,100.


Final Adjusted Base Amount for Use in 2014
Entity and Legislation Public Bid Written/
Telephonic Bid
Separate
Bids
Concessions &
Small
Purchases
The County Code (16 P. S. §§ 1801—1803 and 2317) 19,100.00 10,300.00 19,100.00
Second Class County Code (16 P. S. §§ 3112, 5001, 5511-A and 5517) 19,100.00 10,300.00 19,100.00
Public School Code (24 P. S. §§ 1-120, 7-751 and 8-807.1) 19,100.00 10,300.00 19,100.00
Public School Code, Thaddeus Stevens College of Technology (24 P. S. § 19-1913.1-B) 19,100.00
Public School Code, State System of Higher Education (24 P. S. §§ 20-2003-A.1 and 20-2010-A) 19,100.00
Prevention and Control of Floods, Flood Control Districts (32 P. S. §§ 662 and 662.1) 19,100.00
Housing Authorities (35 P. S. § 1551) 19,100.00 10,300.00
Intergovernmental Cooperation (53 Pa.C.S. §§ 2308, 2311 and 2312) 19,100.00 10,300.00
General Municipal Law, Flood Control (53 P. S. § 2863) 19,100.00 10,300.00
Political Subdivisions Joint Purchases Law (53 P. S. § 5432) 19,100.00 10,300.00
Parking Authorities (53 Pa.C.S. § 5511) 25,800.00 10,300.00
Municipal Authorities (53 Pa.C.S. § 5614) 19,100.00 10,300.00
Public Auditorium Authorities Law (53 P. S. § 23851) 19,100.00 10,300.00
Third Class City Code (53 P. S. §§ 36901, 36902, 36903.1 and 36909) 19,100.00 19,100.00
The Borough Code (53 P. S. §§ 46402 and 46405) 19,100.00 10,300.00 19,100.00
Incorporated Towns (53 P. S. §§ 53202, 53202.1, 53203, 53203.1 and 53205) 19,100.00 10,300.00 19,100.00
First Class Township Code (53 P. S. §§ 56802, 56803 and 56805) 19,100.00 10,300.00 19,100.00
Second Class Township Code (53 P. S. §§ 68102 and 68107) 19,100.00 10,300.00 19,100.00
Economic Development Financing Law
(73 P. S. § 382)
19,100.00 10,300.00
Metropolitan Transportation Authorities
(74 Pa.C.S. § 1750)
25,800.00 19,100.00

JULIA K. HEARTHWAY, 
Secretary

[Pa.B. Doc. No. 13-2332. Filed for public inspection December 13, 2013, 9:00 a.m.]



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