Focus on New Laws: Competitive Bidding Threshold Increased

A helpful increase to the 10-year-old competitive bidding threshold has been enacted into law.
(Published Apr 30, 2018)

A new law will require cities and other local governments to engage in the competitive bidding process only for contracts over $175,000.

HF 3841 (Rep. Jim Nash, R-Waconia) increases the competitive bidding threshold from $100,000 to $175,000. It was signed into law by Gov. Dayton as Chapter 107 on April 26.

Legislative background

The competitive bidding threshold hasn’t been increased since 2008. Construction costs have increased at a greater rate than general cost of living. Small construction projects easily hit the current threshold of $100,000.

The League, the Association of Minnesota Counties, the Minnesota Association of Townships, and the Minnesota School Boards Association supported this bill. The groups argued that local government must be fiscally responsible with taxpayer money when contracting.

The Uniform Municipal Contracting Law requires competition among contractors, which helps ensure responsible use of municipal funds. The new law does not change that. If a local government entity contracts by direct negotiation, it is obligated to have at least two quotes.

Effective date

The new law takes effect on Aug, 1, 2018, and applies to contracts entered into on or after that date.

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