SB394 Alabama 2019 Session

Summary

Primary Sponsor

Bobby D. SingletonSenator

Democrat

Session

Regular Session 2019

Title

Public contracts, competitive bids, further provided, local preference zone, further provided, Sec. 41-16-50 am'd.

Summary

SB 394 would raise the bidding threshold for public contracts from $15,000 to $25,000 and expand local preference zones for multi-county awarding authorities.

What This Bill Does

Raises the minimum amount that requires competitive bidding from $15,000 to $25,000 for expenditures on labor, services, work, materials, equipment, supplies, or other personal property (including leases) by state and local entities. Allows awarding authorities located in more than one county to establish a local preference zone in the municipality where the authority's headquarters are located, or within the Core Based Statistical Area, with defaulting to the authority's boundaries if no action is taken. Provides bid-where-local preference rules: if a bid from a local resident bidder within the zone is within 5% of the lowest bid, the contract may be awarded to that local bidder; if only one bid is received, the authority may negotiate a lower price. Permits awarding to a local bidder over a lower foreign bid within 10% if the local bidder has in-state business or qualifies as a woman-owned, small, minority-owned, veteran-owned, or disadvantaged-owned business. Acknowledges that the bill would involve a new or increased local expenditure but states it is exempt from the Constitution’s 2/3 vote requirement due to specified exceptions, and specifies the act becomes effective after a set delay following passage and governor approval.

Who It Affects

• Public contracting entities in Alabama (state bodies, counties, municipalities, school districts, and their instrumentalities) will have a higher bidding threshold and can use local preference zones when awarding contracts.
• Local businesses and residents within the established local preference zones may have a better chance to win contracts, especially if they are within 5% of the lowest bid and meet residency or certification criteria (e.g., woman-owned, minority-owned, veteran-owned, small, or disadvantaged-owned).
• Foreign bidders remain eligible but local preference provisions allow in-state or qualified local firms to be favored if within 10% of the foreign bid and meet stated criteria.

Key Provisions

• Section 41-16-50: Increase the competitive bidding threshold from $15,000 to $25,000 for expenditures and leases by state and local entities, with exceptions for certain public works contracts.
• Section 41-16-50: Local preference zones may be established by multi-county authorities in the municipality where the HQ is located, or within the Core Based Statistical Area; if not specified, the zone equals the authority's boundaries.
• Section 41-16-50: If a bid from a resident within the local preference zone is within 5% of the lowest bid, the contract may be awarded to that local bidder; only one bid allows for negotiated price if lower than the bid.
• Section 41-16-50: If the lowest bid comes from a foreign entity, a local bidder within the zone may receive the award if their bid is within 10% and they meet criteria (in-state placement or being a woman-owned, small, minority-owned, veteran-owned, or disadvantaged-owned business).
• Section 2: The bill acknowledges it would require new or increased local expenditures but states it is exempt from Amendment 621's 2/3 vote requirement due to exceptions.
• Section 3: Effective date: the act takes effect on the first day of the third month after passage and governor approval.

AI-generated summary using openai/gpt-5-nano on Feb 24, 2026. May contain errors — refer to the official bill text for accuracy.

Subjects

Public Contracts