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C. Contracts
<br />All cities contract for services and equipment, and laws govern many of those
<br />Minn. Stat. § 471.345.
<br />contracts. The most important contracting law to be familiar with is the
<br />uniform municipal contracting law.
<br />Minn. Stat. § 471.345, subd. 2.
<br />If a city plans to enter an agreement with any party for the sale, purchase, or
<br />rental of supplies, materials, or equipment, or the construction, alteration,
<br />Competitive Bidding
<br />repair, or maintenance of any city property, there is a process (competitive
<br />Requirements in Cities Memo
<br />bidding) cities must follow depending upon the estimated dollar amount of the
<br />contract. This is true regardless of the source of funds, the size of the city, and
<br />whether a statutory or charter city.
<br />Minn. Stat. § 471.345, subd. 3.
<br />If the amount of the contract is estimated to exceed $175,000, sealed bids
<br />must be solicited by public notice. Generally, the council must award the
<br />Minn. Stat. § 471.345, subd.
<br />contract to the lowest responsible bidder. If a contract for supplies, materials,
<br />15(a).
<br />or equipment is estimated to exceed $25,000, the city must consider the
<br />State CPV program.
<br />availability, price, and quality available through the states cooperative
<br />Minn. Stat. § 473subd.
<br />3a.
<br />purchasing venture (CPV) program. If the CPV is not used, cities may purchase
<br />Minn. Stat. § 471.345, subs,
<br />the supplies, materials, or equipment from certain national municipal
<br />15(b).
<br />associations' purchasing alliances or cooperatives.
<br />Minn. Stat. § 471.345, subs
<br />If the contract to exceed $175,000 is for construction, alteration, repair, or
<br />3a.
<br />maintenance work, and the city has received requisite "training," the contract
<br />may be awarded to the vendor or contractor offering the best value under a
<br />request for proposals described in statute.
<br />Minn. Stat. § 471.345, subds. 4,
<br />If a contract subject to the law is estimated to exceed $25,000, but not
<br />4a.
<br />$175,000, the contract may be made either upon sealed bids or by direct
<br />negotiation. If by direct negotiation, the city obtains two or more quotations
<br />when possible, and without advertising for bids or otherwise going through
<br />competitive bidding. The best value provision applies to these contracts as
<br />well, and, again, the CPV must be considered.
<br />Minn. Stat. § 471.345. subd. 5.
<br />If the amount of the contract is estimated to be $25,000 or less, the contract
<br />may be made either upon quotation or in the open market, whichever council
<br />prefers. If the contract is made upon quotation, it must be based, so far as
<br />practicable, on at least two quotations, which must be kept on file for at least
<br />one year after their receipt. Best value is again an option for certain contracts.
<br />None of these provisions apply to professional service contracts, and there are
<br />many other exceptions out of the scope of this handbook. Mayors should
<br />simply remember these laws as a basic starting point as well as the fact that
<br />only a majority of council may approve a contract on behalf of the city.
<br />Minnesota
<br />Mayors Chapter 1-12
<br />Association
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