In December 2021, the State Superintendent of Public Instruction released its annual update to the bid threshold set forth under Public Contract Code section 20111(a). Section 20111 provides a maximum limit for many types of contracts K-12 school districts may enter into without utilizing competitive bidding procedures. The bid threshold for 2022 increases from $96,700 to $99,100. The bid threshold is a critically important number for school facilities professionals because it has a significant impact on their freedom of action to purchase goods and services.
The bid threshold in Section 20111(a) applies to contracts for the following:
(A) The purchase of equipment, materials, or supplies to be furnished, sold, or leased to the district.
(B) Services, except construction services.
(C) Repairs, including maintenance as defined in Section 20115, that are not a public project as defined in subdivision (c) of Section 22002 (significant improvements, renovations, construction, and painting).
Every year, the threshold is updated to reflect changes to the Implicit Price Deflator for State and Local Government Purchases of Goods and Services for the United States, which is published by the United States Department of Commerce. (Pub. Contract Code, § 20111, subd. (e).) This year’s change represents an increase of 2.48%. The modest increase is surprising since inflation has soared to its highest level since the early 1980s. However, it is possible that high levels of inflation will be better accounted for in next year’s bid threshold increase.
Please note that many contracts are not subject to the new $99,100 threshold but are subject to other limitations. For instance, public projects, as defined in Public Contract Code section 22002(c), have a bid threshold of $15,000 that is not adjusted for inflation. (Pub. Contract Code, § 20111(b)(1).) This includes “Construction, reconstruction, erection, alteration, renovation, improvement, demolition, and repair work involving any publicly owned, leased, or operated facility.” (Pub. Contract Code, § 22002(c)(1).)
The California Community Colleges Chancellor’s Office is expected to announce a similar increase to the bid threshold for community college districts, under Public Contract Code section 20651(a), sometime soon.
If you have any questions about the bid threshold increase, or about contracting generally, please reach out to us. We have years of experience advising school districts on the intricacies of the Public Contract Code and can address any questions you may have.