What is meant by the term "bid threshold"?

The term "bid threshold" refers specifically to the monetary limit established by law or policy, which determines when a public entity must solicit formal bids for contracts. In municipal governance, this threshold indicates the point at which purchases must be competitively bid, ensuring transparency and fairness in procurement processes. When expenditures exceed this set amount, municipalities are required to seek multiple bids from potential suppliers to promote accountability and cost-effectiveness in public spending.

Understanding the bid threshold is crucial for municipal clerks, as it impacts budgeting, planning, and compliance with state laws governing public contracts. Lower amounts may allow for quicker purchases without the need for formal bidding, while exceeding the threshold initiates a more structured procurement process.