SCOPE OF PROCUREMENT AND PURCHASING OVERSIGHT BY OSD
SCOPE OF PROCUREMENT AND PURCHASING OVERSIGHT BY OSD
The statutory authority vested in the Assistant Secretary for Operational Services (also referred to as the State Purchasing Agent), or designee, and OSD to oversee the procurement of commodities and services by Commonwealth entities is found in M.G.L. c. 7, s. 22, M.G.L. c. 30, s. 51 and M.G.L. c. 30, s. 52. These statutes form the basis of the applicable procurement regulation, 801 CMR 21.00, which provides all Commonwealth Departments with uniform rules and standards governing the procurement of commodities or services, or both, including human and social services for clients. OSD is an oversight agency whose primary responsibilities are to oversee the procurement and acquisition of goods and services by executive branch Departments, establish statewide contracts on behalf of Commonwealth public purchasers, provide procurement guidance and technical assistance to Departments, and ensure that Departments conduct procurements in compliance with all applicable statutes, regulations, and policies.
Compliance with 801 CMR 21.00
Absent a superseding law or regulation, 801 CMR 21.00, Procurement of Commodities or Services, including Human and Social Services, covers the acquisition of ALL commodities and services by Departments within the Executive Branch. Additional procurement and contracting requirements Additional procurement and contracting requirements apply to purchase of service (POS) contracts; these are addressed in Appendix F.
Applicability of 801CMR 21.00 - Procurement Levels III, II and I
For the purposes of delineating which Massachusetts Management Accounting and Reporting System (MMARS) Departments follow regulation 801 CMR 21.00, the Operational Services Division and the Office of the Comptroller (CTR) have defined three levels of Departments:
- Level III: All Executive Branch Departments must follow 801 CMR 21.00.
- Level II: Non-Executive Departments, such as constitutional offices, elected offices, and public institutions of higher education, may choose to follow 801 CMR 21.00 and many have elected to do so by filing a document with OSD and the Office of the Comptroller (CTR) attesting to their compliance with 801 CMR 21.00. Non-Executive Departments, however, are required to follow MGL c. 7, s. 22, M.G.L. c. 30, s. 51 and M.G.L. c. 30, s. 52 and are strongly encouraged to voluntarily use 801 CMR 21.00.
- Level I: Exempt Departments, such as the legislative and judicial branches, the military division, and independent public authorities are not required to follow 801 CMR 21.00. However, they also may elect to adhere to the procurement principles and processes under 801 CMR 21.00.
OSD and CTR have provided extensive guidance pertaining to adherence to the regulation, the underlying statutes, and compliance with State Finance Law. Additional information may be found at: OFFICE OF THE COMPTROLLER - FY15 DEPARTMENT BY SECRETARIAT
Entities Not Required to Follow 801 CMR 21.000
OSD’s procurement statutes specifically exempt the legislative branch and military division. Additionally, the regulations do not apply to all or part of the procurements of the following Commonwealth entities:
- The judicial branch pursuant to Article 30 of the Declaration of Rights of the Constitution of the Commonwealth of Massachusetts, which sets forth the separation of powers principle in the Massachusetts Constitution. There also is case law that supports the separation of powers of the three branches of state government, but specifically states that it does not preclude participation on a voluntary basis.
- Cities and towns and other public purchasers that follow M.G.L. c. 30B may purchase from OSD statewide contracts per M.G.L. c. 7, s. 22A and M.G.L. c. 30B, s. 1(c) and they also may purchase from contracts procured by Commonwealth Departments that issue procurements subject to 801 CMR 21.00. See the Contract Categories section in this document regarding municipal use of Commonwealth Statewide and Department contracts. OSD has no oversight authority over M.G.L. c. 30B or these entities. Although not required to do so, cities and towns frequently purchase from statewide contracts because it saves them the time of conducting their own M.G.L. c. 30B procurements and also because statewide contract prices often are more competitive due to the Commonwealth’s purchasing power.
- Public Universities, Community Colleges, and the Higher Education Consortium, that have statutory authority to conduct certain procurements pursuant to M.G.L. c. 75, s. 13; M.G.L. c. 73, s. 15; M.G.L. c. 15A, s. 24 and M.G.L. c. 15A, s. 24A. However, where these statutes are silent, these entities fall under OSD’s statutes and authority.
Commodities and Services not Covered by 801 CMR 21.00
801 CMR 21.00 and these policies apply to all goods and services procurements, unless subject to a competitive procurement exception. They do not apply to the following:
- Horizontal Construction: The Massachusetts Department of Transportation (MassDOT) is the oversight Department for horizontal construction.
- Vertical Construction: The Division of Capital Asset Management and Maintenance (DCAMM) is the oversight Department for vertical construction.
- Real Property Sales and Leasing: DCAMM is the oversight Department for real property transactions.
- InterDepartmental Service Agreements and Chargebacks: The Office of the Comptroller is the oversight Department for these agreements and chargebacks; 815 CMR 6.00 is the governing regulation.
- Grants and Subsidies: The Office of the Comptroller is the oversight Department for grants and subsidies; 815 CMR 2.00 is the governing regulation. If a federal grant will result in a named partner other than the Commonwealth, then the process for selecting the named partner must be subject to competitive procurement regulations.
Delegation of Procurement Authority
Authority to issue procurements and enter into contracts up to a specified threshold has been delegated by OSD and CTR to Level III Executive Branch Departments, as well as to Level I and II entities. This delegation authority is premised upon compliance with all applicable statutes, regulations, and policies. Departments must document and verify that all purchases have been made in accordance with prescribed laws, regulations, policies and procedures to ensure that the acquisition represents “best value” to the Commonwealth. Please see Section IV for additional information.
OSD Quality Assurance Program
The OSD Quality Assurance (QA) Program is a key element in the success of the procurement and purchasing policies established by OSD. The purpose of the program is to assist Departments in achieving and maintaining compliance with 801 CMR 21.00 and the related OSD policies and guidance, including use of COMMBUYS. This goal is accomplished by:
- Examining procurement and purchasing activities (including contracting) from data captured in COMMBUYS and MMARS;
- Scheduling on-site visits to meet with a Department’s Chief Procurement Officer (CPO), Chief Fiscal Officer (CFO), and procurement staff in addition to reviewing procurement files; and
- On-going communication with the CPO, CFO, and procurement staff at the individual Departments.
The QA review identifies a Department’s level of compliance with procurement rules and regulations and provides a basis for:
- Identifying the amount of support needed by Departments to meet compliance;
- Ensuring delegation levels for Departments are appropriate; and
- Updating appropriate OSD training to target specific areas of concern.
Depending on the results of a QA review, Departments may be required to:
- Schedule regular meetings over a period of time to maximize the benefits of the assistance;
- Develop a Corrective Action Plan (CAP) to resolve non-compliance issues with a deadline and provide a copy to the OSD QA team; and/or
- Have procurement and purchasing activities monitored for a determined duration after the QA review.
The OSD QA Team will monitor and assist Executive Departments to ensure compliance with applicable laws, regulations, and policies. In addition to conducting queries on Department encumbrance activity, the QA Team may review COMMBUYS use and records, and conduct regular site visits to review Department procurement files and internal procurement practices. These in-depth reviews not only determine compliance with requirements and policies, but also facilitate provision of training, technical support, or assistance, as needed.
Additional OSD Resources
OSD offers a number of additional tools to Departments to understand and comply with applicable requirements. In support of OSD’s mission, the OSD training team provides a variety of free training opportunities for both the buying and selling communities that support a Department’s ability to understand and follow 801 CMR 21.00 and associated policies and to use COMMBUYS to conduct procurement and purchasing activities. Webinars and classroom training cover all aspects of procurement and purchasing. In addition, OSD’s Help Desk is available to assist Executive Departments and others with use of COMMBUYS and OSD’s statewide contracts.
Using the Office of the Comptroller's Expenditure Classification Handbook
The Office of the Comptroller issues a handbook of expenditure object classes and object codes known as the Expenditure Classification Handbook, which is helpful in determining coverage of 801 CMR 21.00. Object classes are identified under lettered categories such as “JJ - Programmatic Operational Services.” Object codes are more specific expenditure breakdowns within an object class, such as “J50 - Instructors/Lecturers/Trainers.” In addition to describing the types of expenditures that should be classified under specified object classes and object codes, the Expenditure Classification Handbook includes helpful information on relevant legal citations, regulations, restrictions, and contract and encumbrance requirements. Departments should review the Expenditure Classification Handbook (available on the Comptroller’s website) for information on the specific object codes that are covered under 801 CMR 21.00. Departments must determine the object code that applies to their anticipated purchase prior to beginning the purchasing process to determine the applicable procurement requirements.
ROLES AND RESPONSIBILITIES OF DEPARTMENTS
ROLES AND RESPONSIBILITIES OF DEPARTMENTS
M.G.L. c. 7, s. 22 establishes OSD oversight of “the manner and method of the purchasing, delivering, and handling of, and the contracting for” goods and services. As noted above, Executive Branch Departments maintain procurement and acquisition authority via delegation. An ongoing obligation associated with that delegated authority is full compliance with applicable regulations and policies. Specific obligations are detailed below.
Required Use of Statewide Contracts
Executive Branch Departments must utilize established statewide contracts for the purchase of commodities and services. Specifically, Executive Departments are required to use OSD’s statewide contracts, including designated statewide contracts, if available, for their specific commodity and service needs. Exceptions only will be permitted with prior written approval from the Assistant Secretary for Operational Services, or designee. The process Departments must follow when requesting this approval is explained in Section III, A, ii.
Follow Procurement and Purchasing Policies and Regulations
Conduct all procurements for and acquisitions of commodities and services for the Department consistent with all applicable Commonwealth statutes, regulations, policies, and procedures. This includes accepting responsibility for delegated procurement authority and accountability for the actions of all members of the Department under 801 CMR 21.00 and associated forms and policy guidance. Compliance with applicable procurement and purchasing requirements includes applicable Executive Orders.
Designate a Chief Procurement Officer
Pursuant to Executive Order 533, each Secretariat and each Executive Branch Department must designate a Department CPO who serves as the head of procurement and sourcing within the agency. The CPO is the individual with primary responsibility for ensuring that Department procurement practices comply with OSD requirements.
Best Practices – Training
To be effective in the role, it is highly recommended that agency CPOs attend relevant OSD training opportunities. Agency CPOs must attend OSD’s five-day Strategic Sourcing Certificate Program. Additionally, to ensure that agency practices conform to procurement and purchasing requirements, CPOs periodically should identify agency staff involved in these activities and propose appropriate training opportunities. OSD’s Training course catalog, available on the OSD website, includes a full range of introductory and advanced classes that allow both new and experienced staff to develop and maintain appropriate skills.
Maintain and Use COMMBUYS Account
All Departments must maintain and keep up-to-date a COMMBUYS organization account. COMMBUYS provides online public access to public solicitation and contract documents. Web-based distribution of procurement information and receipt of bid responses increases the volume and quality of competition, reduces the time and money spent creating and managing paper documents, and provides greater and more immediate procurement transparency.
Departments and other entities using COMMBUYS must designate an Organization Administrator (OA), who is responsible for attending training, determining individual access, and assigning appropriate user roles and approval paths that determine the features for which access will be allowed or restricted within COMMBUYS. Organization Administrators typically are CFOs or CPOs, or their designees, and these individuals often serve as MMARS liaisons. The designated OA should maintain the COMMBUYS account with current staff information and authorizations. For Executive Departments, purchaser roles associated with the approval of Release Requisitions, Purchase Orders (including MBPOs), and Change Orders must align with Security Roles assigned in MMARS, to comply with CTR’s Department Head Signatory Authorization (DHSA) and Electronic Signatures for MMAS Transactions Policy. Additional information to support OA account maintenance may be found in the COMMBUYS resource center.
Required Use of COMMBUYS
To comply with applicable procurement and acquisition laws, regulations, policies, and practices, and to achieve the Commonwealth’s procurement goals to streamline processes and conduct strategic analysis, Departments are required to post records on COMMBUYS when conducting the following:
- Creating requisitions to initiate purchases in the system;
- Posting all solicitations for goods and services, including RFQs;
- Recording procurement exceptions;
- Posting Procurement Notifications: Due Diligence Postings, RFIs, WTO Notices;
- Receiving only electronic responses for Small and Large Procurements;
- Awarding contracts, creating electronic catalogs, and placing orders; and
- Announcements of grant funding availability and grantee selection for State Discretionary Grants.
Department Role in QA reviews
Departments undergoing review by OSD’s QA unit are expected to provide full access to relevant documents and personnel, respond to requests and inquiries in a timely manner, and to be available for meetings, as requested. In addition, Departments are obligated to comply with any required corrective actions that result from QA reviews.