The Municipal Purchasing Law of 1983

The Municipal Purchasing Law of 1983 states “All purchases made from funds subject to the authority of this part shall be made within the limits of the approved budget, when required, and the appropriations, when required, for the department, office or agency for which the purchase is made.” T.C.A. § 6-56-303. In short, purchases must have appropriate budgetary authorization.

This law also covers advertising and bidding requirements, the exceptions to those requirements, and the authority of municipalities to increase and/or lower advertisement and bidding amounts. One of the exceptions to the advertising and bidding requirements is emergencies.

T.C.A. § 6-56-304(3) states:

… A record of any such emergency purchase shall be made by the person or body authorizing such emergency purchases, and shall specify the amount paid, the items purchased, from whom the purchase was made and the nature of the emergency. A report of any emergency purchase shall be made as soon as possible to the municipal governing body and the chief executive officer of the municipality, and shall include all items of information as required in the record.

The Municipal Purchasing Law also refers to provisions in the Public Purchases chapter of T.C.A. Title 12, including provisions applicable to local governments concerning competitive purchasing, purchases from other governmental entities, public auctions, and cooperative purchasing agreements. Compliance with applicable purchasing requirements is an important part of effective budget management and control.

The Municipal Purchasing Law references T.C.A. § 12-3-1212 for the applicable threshold over which public advertisement and sealed competitive bids or proposals are required for nonemergency, nonproprietary purchases. A municipality may, by resolution or ordinance of its governing body, establish a bid threshold of up to $50,000 if it has centralized purchasing authority and a full-time purchasing agent, or up to $25,000 if it has non-centralized purchasing authority or does not have a full-time purchasing agent. At least three written quotations are required, when possible, for purchases exceeding 40% of the municipality's established bid threshold but falling below that threshold. Purchases of like items must be aggregated when applying the threshold (T.C.A. § 12-3-1212).