Background
The Municipal Purchasing Act of 1983 details the process by which municipalities may make purchases.
Under the provisions of the 1983 law with amendments, open market purchases under $1,000 are unrestrained by law, requiring no bidding or advertisement at all. For purchases between $1,000 and $10,000, there is no requirement to advertise and a city may make purchases on the open market, provided they have obtained at least three (3) competitive quotes, when possible. For purchases, leases or lease-purchase agreements that exceed $10,000 in any fiscal year, municipalities are required to publicly advertise and competitively bid all purchases.
The competitive bidding process, by nature, is limited in scope. With the competitive bid, only the bid specifications may be evaluated for the bid award.
Problem
Circumstances arise in municipal government that present a problem for which soliciting competing solutions would be a more desirable course of action. In many of these circumstances, the need to evaluate a proposed solution based on discussion and evaluation with qualified professionals is demanded to best tailor a solution to the needs of the municipality.
Because of the restrictive nature of the competitive bidding process, a more flexible tool in these limited circumstances is the Request for Proposal (RFP). Beyond the cost or bid, RFP's would provide an alternative to present a problem confronting a municipal government to qualified professionals and solicit their respective solutions. Upon discussion and evaluation of these competing solutions, a more educated decision can be made with regard to what is in the best interest of the municipality.
Unfortunately, RFP's are limited in the state of Tennessee to licensed professionals such as architects, engineers, attorneys, financial advisors, and educators.
Proposed Remedy
Amend Tennessee Code Annotated, Section 12-3-10 to authorize any municipality to utilize request for proposals in limited circumstances where multiple solutions are being sought.
Anticipated Benefits to Municipalities
If the statutes were amended to allow municipal governments to utilize RFP's, more flexibility in circumstances best suited for this type of scenario could be utilized to make sound decisions based on competing solutions and ultimately be better stewards of public funds.
