Cities, counties, and other local governmental entities may now increase their threshold for advertising for bids.  Prior to incurring an expenditure of more than $30,000, these entities were required to place an advertisement for bids; however, effective July 1, 2023, this threshold was increased to $40,000.  Cities, counties, and other local governmental entities are now authorized to increase their threshold for advertising for bids to $40,000, under KRS 424.260.  This change will be a welcome development for many local governments.

In addition, many local governments currently utilize state master agreements to purchase goods without advertising for bids, as an exception to the above rule. Beginning July 1, 2023, the state failed to competitively bid out vehicles under the state master agreement and the current agreement does not include a negotiated or bid vehicle price.  The state agreement now requires state governmental agencies to obtain three quotes from the approved vendor listing, prior to using the state master agreement.  However, cities, counties, and other local governmental entities are not authorized under KRS 424.260 to obtain quotes.  Therefore, local governmental entities will no longer be able to utilize the state master agreement for vehicle purchases over $40,000.  Local governments should competitively advertise for bid all vehicle purchases over $40,000 to stay in compliance with KRS 424.260.

For questions, please contact a member of our governmental accounting here.