HB 432 (2026 Regular Session, Kentucky) – Summary
Purpose and intent
- The bill amends Kentucky’s local purchasing and bid requirements to clarify when noncompetitive (non-bid) procurement may be used and to reaffirm existing bidding thresholds. It broadens or codifies specific justifications for noncompetitive negotiation and sets unified dollar thresholds for bid requirements.
Key provisions and changes
1) Section 1 – Amendments to KRS 45A.380 (noncompetitive negotiation)
- Local public agencies may engage in noncompetitive negotiation only when a written determination shows competition is not feasible, and a written determination by a designated official supports one of the enumerated circumstances:
- (1) An emergency exists that would cause public harm if competitive procedures are delayed.
- (2) A single source exists within a reasonable geographic area for the product or service.
- (3) The contract is for licensed professionals (e.g., attorney, physician, CPA, nurse, educator specialist) or certain technicians (plumber, electrician, etc.) or artisans (sculptor, painter, musician); note: does not apply to architects or engineers providing construction management rather than professional architect/engineering services.
- (4) Purchase of perishable foods (meat, fish, poultry, eggs, fresh produce).
- (5) Replacement parts where need cannot be reasonably anticipated and stockpiling isn’t feasible.
- (6) Proprietary items for resale.
- (7) In school districts, contracts related to student-involved enterprise activities.
- (8) Expenditures for authorized travel outside agency boundaries.
- (9) Supplies sold at public auction or by sealed bids.
- (10) Various insurance contracts (group life, health, professional liability, worker’s comp, unemployment).
- (11) Sales of supplies at reduced prices enabling savings.
- (12) Private real estate development contracts with:
- (a) Requirement to increase sewer/storm-water collection capacity;
- (b) Local agency pays only proportional cost beyond original capacity.
- (13) Purchase of used vehicles/equipment where price is ≤ 75% of the current manufacturer’s suggested retail price (MSRP) for new equivalents.
2) Section 2 – Amendments to KRS 424.260 (advertised bids threshold)
- General bidding requirement: Contracts exceeding $40,000 (except certain categories) must be preceded by newspaper advertisement unless a statute fixes a higher threshold or provides an exception. Categories include:
- (a) Materials
- (b) Supplies (with exceptions for perishable foods or items sold at public auction)
- (c) Equipment (except used vehicles/equipment priced ≤ 75% of MSRP)
- (d) Contractual services (other than professional)
- If a fiscal court requires bidding for expenditures under $40,000, that requirement controls.
- School districts retain flexibility to bypass bidding for items meeting state price contracts, federal GSA pricing, or other school district bids, provided the district certifies price alignment and lower price. Limits apply:
- The exception cannot be used after bidding has begun for a specific item.
- If all bids are rejected, districts may again use the exception.
- Emergency purchases are exempt when certified by the local chief executive (or appropriate official) and filings are made as required.
- Additional exemptions:
- No application to wholesale electric power purchases for municipal utilities.
- No application to purchases under KRS 82.084.
Affected entities
- Local public agencies in Kentucky (cities, counties, districts, sheriffs, county clerks, boards/commissions) that undertake procurement.
- Public school districts, with special allowances for price-contract and inter-district bid compatibility.
- Private real estate developers in certain sewer/storm-water capacity improvement arrangements (shared financing/pricing terms).
- Vendors and contractors seeking purchases under the listed noncompetitive circumstances.
Procedural and timeline aspects
- The bill requires written determinations for noncompetitive procurement, including specifying the emergency or single-source conditions.
- Maintains existing statutory framework for bidding thresholds, while reaffirming standard exceptions and emergency provisions.
- The text indicates standard legislative progress: introduced in January 2026, committee referrals, committee substitute, and passage in House; Senate consideration follows.
Notes
- The House Committee Substitute aligns with supporting language and refinements from sponsor and co-sponsor.
- The bill’s effect is to provide clearer, enumerated grounds for noncompetitive procurement and standardize the $40,000 bid threshold with specified exceptions.
