Overview of Statewide Contractor Administration Fee
Based on your feedback and our internal review of the Administration Fee collection process, the Operational Services Division has implemented several changes to the Administration Fee process effective January 2017:
- Our Payment Portal service has moved to a new contractor, nCourt, to accommodate additional online features that will facilitate payment capture and processing:
- Vendors now are able to report $0 payments, when applicable, directly through the Payment Portal;
- A new Payment Portal feature enables vendors named on multiple Statewide Contracts to record and remit all quarterly payments in one transaction.
- Discover Card payments have been added to our list of credit card options.
- Our previous waiver that enabled vendors to defer payments of less than $50 to the following payment period no longer will be available unless authorized by your contract manager.
Payment notices going out January 2017 for the payment quarter ending December 2016 will provide information to link to the new Payment Portal – http://osdadminfee.com.
Don’t forget – all Administration Fee payments must be submitted through the Payment Portal via ACH debit or credit card payments only. Checks no longer should be sent as a form of payment unless approved by your contract manager.
If you have questions in the short term, please direct them to OSD’s Fee Administrator at firstname.lastname@example.org
Statewide Contracts are subject to a 1% Contract Administration Fee, which is created pursuant to MGL c. 7, § 3B, 801 CMR 4.02, the Transaction Fee section in solicitations and/or incorporated by reference into Statewide Contracts with the Operational Services Division (OSD). Per their contractual agreement with the OSD, Statewide Contractors pay a quarterly Administration Fee equal to 1% of the total dollar amounts (adjusted for credits and refunds) paid by Eligible Entities purchasing from the associated Statewide Contract(s). Statewide Contractors are subject to the Fee regardless of whether the contract was awarded for statewide or regional coverage.
Eligible entities include, but are not limited to:
- Cities, towns, districts, counties and other political subdivisions;
- Executive, Legislative and Judicial Branches, including all departments and elected offices therein;
- Independent public authorities, commissions, and quasi-public agencies;
- Local public libraries, public school districts, and charter schools;
- Public hospitals owned by the Commonwealth;
- Public institutions of higher education;
- Public purchasing cooperatives;
- Non-profit, UFR-certified organizations that are doing business with the Commonwealth;
- Other states and territories with no prior approval by the State Purchasing Agent required; and
- Other entities when designated in writing by the State Purchasing Agent.
Note: If the 1% Administration Fee is deductible as a business expense for federal income tax purposes, it is also deductible as an expense for Massachusetts tax purposes.
Quarterly Administration Fee Schedule
Quarterly Administration Fee payments are due to the Operational Services Division (OSD) on or before 45 days following the close of each Payment Period, as specified below.
|Quarter||Payment Period||Quarterly Payment Due Date|
|First Quarter||January 1st – March 31st||May 15th|
|Second Quarter||April 1st – June 30th||August 15th|
|Third Quarter||July 1st – September 30th||November 15th|
|Fourth Quarter||October 1st – December 31st||February 15th|
Quarterly payments also apply to any Payment Period wherein the contractor participates on the contract less than a full calendar quarter (i.e. if the contract starts after the first day or ends before the last day of the quarter). Contractors who fail to make prescribed quarterly Administrative Fee payments will be considered in breach of contract (see Audit section below).
Making Quarterly Administration Fee Payments
OSD has set up a web-based Secure Payment Center to facilitate quarterly Administration Fee payments. Following the close of each Payment Period, Statewide Contractors will receive an e-mail from OSD that includes information to enable submission of payments via OSD’s Secure Payment Center. Contractors also may link to the Secure Payment Center.
Payments through the Secure Payment Center may be submitted:
- Via Automatic Clearing House (ACH) debit. Payments made via ACH debit will have no associated fee.
- By credit card: American Express, Discover, MasterCard, and/or Visa. Contractors opting to pay by credit card will incur a convenience fee. This non-refundable fee is in addition to the 1% Administration Fee. The current rate is posted on the Secure Payment Center.
As part of the Secure Payment Center payment process, Contractors also will submit their Quarterly Statewide Contractor Administration Fee Report. Further guidance for this reporting requirement is provided below.
Quarterly Administration Fee Reporting Requirements
Contractors are required to submit one Statewide Contractor Administration Fee Report for each Statewide Contract each Payment Period and are able to satisfy this requirement when electronically submitting their payment via the Secure Payment Center.
During the term of the Statewide Contract and for a period of six years thereafter, the Operational Services Division, its auditors, the Office of the Inspector General or other authorized representatives shall be afforded access at reasonable times to Contractor's accounting records, including sales information on any system, reports or files, in order to audit all records relating to goods sold or services performed pursuant to their agreement with the Commonwealth. If such an audit indicates that the Contractor has materially underpaid OSD, then the Contractor shall remit the underpayment and be responsible for payment of any costs associated with the audit.
If contractors have questions about using the Secure Payment Center or the Administration Fee process, they are encouraged to visit our Administration Fee Frequently Asked Questions page or send an email to email@example.com. Other Administration Fee questions or updates to contractor contact information should be directed to the contractor’s contract manager at OSD.