(a) With the exception of contracts for public works whose competitive bidding requirements are governed exclusively by Title 39, all expenditure of funds for labor, services, work, or for the purchase of materials, equipment, supplies, or other personal property involving thirty thousand dollars ($30,000) or more, and the lease of materials, equipment, supplies, or other personal property where the lessee is or becomes legally and contractually bound under the terms of the lease to pay a total amount of thirty thousand dollars ($30,000) or more, made by or on behalf of the Alabama Fire College, the district boards of education of independent school districts, the county commissions, the governing bodies of the municipalities of the state, and the governing boards of instrumentalities of counties and municipalities, including waterworks boards, sewer boards, gas boards, and other like utility boards and commissions, except as otherwise provided in this article, shall be made under contractual agreement entered into by free and open competitive bidding, on sealed bids, to the lowest responsible and responsive bidder.

Terms Used In Alabama Code 41-16-50

  • Contract: A legal written agreement that becomes binding when signed.
  • Corporation: A legal entity owned by the holders of shares of stock that have been issued, and that can own, receive, and transfer property, and carry on business in its own name.
  • Fiscal year: The fiscal year is the accounting period for the government. For the federal government, this begins on October 1 and ends on September 30. The fiscal year is designated by the calendar year in which it ends; for example, fiscal year 2006 begins on October 1, 2005 and ends on September 30, 2006.
  • following: means next after. See Alabama Code 1-1-1
  • Jurisdiction: (1) The legal authority of a court to hear and decide a case. Concurrent jurisdiction exists when two courts have simultaneous responsibility for the same case. (2) The geographic area over which the court has authority to decide cases.
  • Lease: A contract transferring the use of property or occupancy of land, space, structures, or equipment in consideration of a payment (e.g., rent). Source: OCC
  • person: includes a corporation as well as a natural person. See Alabama Code 1-1-1
  • Personal property: All property that is not real property.
  • personal property: includes money, goods, chattels, things in action and evidence of debt, deeds and conveyances. See Alabama Code 1-1-1
  • preceding: means next before. See Alabama Code 1-1-1
  • property: includes both real and personal property. See Alabama Code 1-1-1
  • state: when applied to the different parts of the United States, includes the District of Columbia and the several territories of the United States. See Alabama Code 1-1-1
(b)

(1) Prior to advertising for bids for an item of personal property or services, where a county, a municipality, or an instrumentality thereof is the awarding authority, the awarding authority may establish a local preference zone consisting of any of the following:

a. The legal boundaries or jurisdiction of the awarding authority.
b. The boundaries of the county in which the awarding authority is located.
c. The boundaries of the Core Based Statistical Area in which the awarding authority is located.
(2) If no action is taken by the awarding authority under subdivision (1), the boundaries of the local preference zone shall be deemed to be the same as the legal boundaries or jurisdiction of the awarding authority.
(3) In the event a bid is received for an item of personal property or services to be purchased or contracted for from a person, firm, or corporation deemed to be a responsible bidder, having a place of business within the local preference zone where the county, a municipality, or an instrumentality thereof is the awarding authority, and the bid is no more than five percent greater than the bid of the lowest responsible bidder, the awarding authority may award the contract to the resident responsible bidder.
(4) If no bids or only one bid is received at the time stated in the advertisement for bids, the awarding authority may advertise for and seek other competitive bids, or the awarding authority may negotiate through the receipt of informal bids not subject to the requirements of this article. Where only one responsible and responsive bid has been received, any negotiation for the work shall be for a price lower than that bid.
(5) In the event both or all bids exceed the awarding authority’s anticipated budget, the awarding authority may negotiate with the lowest responsible and responsive bidder, provided the negotiated price is lower than the bid price.
(c) The governing bodies of two or more contracting agencies, as enumerated in subsection (a), or the governing bodies of two or more counties, or the governing bodies of two or more city or county boards of education, may provide, by joint agreement, for the purchase of labor, services, or work, or for the purchase or lease of materials, equipment, supplies, or other personal property for use by their respective agencies. The agreement shall be entered into by similar ordinances, in the case of municipalities, or resolutions, in the case of other contracting agencies, adopted by each of the participating governing bodies, which shall set forth the categories of labor, services, or work, or for the purchase or lease of materials, equipment, supplies, or other personal property to be purchased, the manner of advertising for bids and the awarding of contracts, the method of payment by each participating contracting agency, and other matters deemed necessary to carry out the purposes of the agreement. Each contracting agency’s share of expenditures for purchases under any agreement shall be appropriated and paid in the manner set forth in the agreement and in the same manner as for other expenses of the contracting agency. The contracting agencies entering into a joint agreement, as permitted by this section, may designate a joint purchasing or bidding agent, and the agent shall comply with this article. Purchases, contracts, or agreements made pursuant to a joint purchasing or bidding agreement shall be subject to all terms and conditions of this article.

In the event that utility services are no longer exempt from competitive bidding under this article, non-adjoining counties may not purchase utility services by joint agreement under authority granted by this subsection.

(d) The awarding authority may require bidders to furnish a bid bond for a particular bid solicitation if the bonding requirement applies to all bidders, is included in the written bid specifications, and if bonding is available for the services, equipment, or materials.
(e) Notwithstanding subsection (a), in the event the lowest bid for an item of personal property or services to be purchased or contracted for is received from a foreign entity, where the county, a municipality, or an instrumentality thereof is the awarding authority, the awarding authority may award the contract to a responsible bidder whose bid is no more than 10 percent greater than the foreign entity if the bidder has a place of business within the local preference zone or is a responsible bidder from a business within the state that is a woman-owned enterprise, an enterprise of small business, as defined in Section 25-10-3, a minority-owned business enterprise, a veteran-owned business enterprise, or a disadvantaged-owned business enterprise. For the purposes of this subsection, foreign entity means a business entity that does not have a place of business within the state.
(f)

(1) No expenditure involving thirty thousand dollars ($30,000) or more may be split into parts involving sums of less than thirty thousand dollars ($30,000) for the purpose of evading the requirements of this article.
(2) If an awarding authority documents its reasonable belief, based on expenditures in previous years, that an expenditure will not meet the dollar threshold and, based upon that reasonable belief, makes the expenditure without bidding, but then circumstances arise that necessitate making a subsequent expenditure of like items or services that would increase the total to or above the dollar threshold, then the subsequent expenditure shall be bid pursuant to this article. The awarding authority shall not be deemed to have violated this article for the prior expenditure that was not bid, provided that the awarding authority documented its reasonable belief, based on expenditures in previous years, that the total amount would be below the dollar threshold and that the subsequent expenditure was bid.
(g) Beginning October 1, 2027, and every three years thereafter, all dollar amounts used in this article shall be subject to a cost adjustment based on the following procedure: The Chief Examiner of the Department of Examiners of Public Accounts may submit to the Chair of the Legislative Council a recommendation that the amount be increased based on the percentage increase in the Consumer Price Index for the immediately preceding three-year period, rounded to the nearest thousand dollars. The recommendation shall be subject to the approval of the Legislative Council. In the event the recommendation is not disapproved by the Legislative Council by the end of April following the submission of the recommendation, the recommendation shall be deemed to be approved. Upon approval, the Department of Examiners of Public Accounts shall notify the public of the adjusted dollar amounts by July 1 before the fiscal year in which the changes will take effect.
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