Contracts
The Minnesota Uniform Municipal Contract law governs government
contracts for most government units other than the State of Minnesota itself.
It is found at Minnesota Statutes Section 471.345. By its terms,
the UMC applies to any "municipality", defined as a "county, town, city,
school district or other municipal corporation or political subdivision
of the state authorized by law to enter into contracts." Uniform
Municipal Contract Law
What contracts are covered. Under the law
A "contract" means
- an agreement entered into by a municipality for
the sale or purchase of supplies, materials, equipment or the rental
thereof, or the construction, alteration, repair or maintenance of real
or personal property.
The UMC does not apply to purchase of services, such as legal or accounting services. Sometimes it requires some judgment to determine whether a contract falls under the UMC. There are a number of special exceptions which have been removed from coverage for one reason or another.
Sealed Bids Required. The UMC requires municipalities
to follow the statutory sealed bid procedure for all covered contracts
exceeding $25,000.
Sealed Bids or Negotiation. If a covered
contracts is estimated to exceed $10,000 but not to exceed $25,000, the
municipality has an option. It may either use the sealed bid procedure,
or it may use a direct negotiation procedure. In the latter case,
the negotiation process must meet the following requirement:
-
The municipality must obtain two or more quotations if possible;
-
The municipality negotiates for the lowest possible price
by negotiation;
-
All quotations obtained must be kept on file for a period
of at least one year after receipt thereof.
Counties or towns may use the negotiation procedure for rental contracts estimated at $60,000 or less.
Purchase on the open market. If the amount
of the contract is estimated to be $10,000 or less, the contract
may be made either upon quotation or in the open market, in the discretion
of the governing body. If the contract is made upon quotation it
must be based, so far as practicable, on at least two quotations.
The quotations must be kept on file for a period of at least one year after
their receipt.
Specifications. Sometimes a municipality
seems to favor a particular supplier by crafting specifications which exclude
competitors. For this reason, the UMC requires most contracts to
prepare specifications which do not exclude all but one type or kind.
Specifications must thus "include competitive supplies and equipment."
An exception applies for "noncompetitive" types of supplies and equipment."
Chapter
471 Municipal law Chapter.
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