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DEPARTMENT OF
LABOR AND INDUSTRY

Consumer Price Index Adjustment of Base Amounts on Bids Effective January 1, 2017

[46 Pa.B. 7772]
[Saturday, December 10, 2016]

 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, or both, for certain contracts. The Department is required to announce the percentage change in the Consumer Price Index for All Urban Consumers (CPI-U): All Items 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, 2016, is 1.5%.

 The change to the base rate is determined as follows:

 1) Calculate the percentage change in CPI-U (I) from September 2015 to September 2016. This is derived as I = (CPI16—CPI15)/CPI15, where the subscripts refer to September 2016 and 2015 values of CPI-U. As reported by the BLS these values are (241.428 − 237.945)/237.945 = +3.483/237.945 = +1.4638%, which when rounded to 1 decimal place = 1.5%. (This was also reported as 1.5% in Table A of the BLS news release on the Consumer Price Index Summary for September 2016.)

 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 two subscripts. For illustration purposes, the subscripts are omitted.) Then P = B*PC. A common value for the base amount in 2016 for a public bid is $19,421.08. (The other two prior PABs, which are this year's bases for a variety of bid types, were $10,497.88 and $26,244.70.) For example, using B = $19,421.08, results in P = $19,421.08 * 1.5% = $291.32.

 4) Then the Preliminary Adjusted Base, PAB = P + B, which reduces to $291.32 + $19,421.08 = $19,712.40.

 5) The Final Adjusted Base Amount, FAA (which is used as the limit for the next year that is 2017), is the PAB rounded to the nearest 100. Therefore, the FAA = $19,700.00.

Final Adjusted Base Amount for Use in 2017
Entity and Legislation Public Bid Written/ Telephonic Bid Separate Bids Concessions
The County Code (16 P.S. §§ 1801—1803, 2317) $19,700 $10,700 $19,700
Second Class County Code (16 P.S. §§ 3112, 5001, 5511-A and 5517) $19,700 $10,700 $19,700
Public School Code (24 P.S. §§ 1-120, 7-751 and 8-807.1) $19,700 $10,700 $19,700
Public School Code, Thaddeus Stevens College of Technology (24 P.S. § 19-1913.1-B) $19,700
Public School Code, State System of Higher Education (24 P.S. §§ 20-2003-A.1 and 20-2010-A) $19,700
Prevention and Control of Floods, Flood Control Districts (32 P.S. §§ 662 and 662.1) $19,700
Housing Authorities (35 P.S. § 1551) $19,700 $10,700
Intergovernmental Cooperation (53 Pa.C.S. §§ 2308, 2311 and 2312) $19,700 $10,700
General Municipal Law, Flood Control (53 P.S. § 2863) $19,700 $10,700
Political Subdivisions Joint Purchases Law (53 P.S. § 5432) $19,700 $10,700
Parking Authorities (53 Pa.C.S. § 5511) $26,600 $10,700
Municipal Authorities (53 Pa.C.S. § 5614) $19,700 $10,700
Public Auditorium Authorities Law (53 P.S. § 23851; HB 2324) $19,700 $10,700
Third Class City Code (11 Pa.C.S. §§ 11901.1, 11901.2, 11901.4, 11902, 11903.1 and 11909) $19,700 $19,700
The Borough Code (53 P.S. §§ 46402 and 46405) $19,700 $10,700 $19,700
Incorporated Towns (53 P.S. §§ 53202, 53202.1, 53203, 53203.1 and 53205) $19,700 $10,700 $19,700
First Class Township Code (53 P.S. §§ 56802, 56803 and 56805) $19,700 $10,700 $19,700
Second Class Township Code (53 P.S. §§ 68102 and 68107) $19,700 $10,700 $19,700
Economic Development Financing Law (73 P.S. § 382) $19,700 $10,700
Metropolitan Transportation Authorities (74 Pa.C.S. § 1750) $26,600 $19,700

KATHY M. MANDERINO, 
Secretary

[Pa.B. Doc. No. 16-2154. Filed for public inspection December 9, 2016, 9:00 a.m.]



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