Are municipalities in South Carolina required to adopt a procurement code?
State law requires municipalities to adopt a procurement code. According to SC Code Section 11-35-5320 “all political subdivisions of the state shall adopt ordinances or procedures embodying sound principles of appropriately competitive procurement.” The law does not require municipalities to adopt state procedures.
Are there any model ordinances or procedures available?
Yes. The same law from 1981 requiring a procurement code also established a state task force to develop a model ordinance for political subdivisions including cities and towns. That model ordinance is available at the State Fiscal Accountability Authority’s Procurement Services website. This ordinance is most suitable for larger municipalities with a full-time purchasing staff.
To assist smaller municipalities, the Municipal Association of SC developed a simplified model purchasing ordinance. Municipalities should adapt the model ordinance to meet local needs and operating requirements.
Can a municipality establish preferences in its procurement code?
Yes. State law only requires that the procurement codes adopted by cities and towns “embody sound principals of competitive procurement.”
Including preferences is a local policy decision, and state and federal courts have upheld properly constructed and applied geographic or socioeconomic preferences. Examples include awarding bids to minority-owned businesses or to local businesses if its bid is within a defined percentage — for example, 5% — of the next lowest bid.
Generally, a procurement code specifies the percentage of preference in a schedule that varies with the value of the purchase. The percentage is often capped on purchases over a defined value. Cities that are considering procurement preferences should consult the city or town attorney before adopting the policy.
What determines the method used to solicit and advertise for bids?
The local procurement code adopted by the council should specify the dollar threshold or thresholds that trigger implementation of bid procedures. The code should also indicate what methods must be used in each procedure and whether advertising is required. The dollar values in the Municipal Association’s model ordinance are suggested amounts which can be altered to meet the specific needs of the municipality and its form of government.
View the Association’s model purchasing ordinance.