OIG Bulletin, February 2022: Frequently Asked Questions

These FAQs about Chapter 30B include questions about purchasing road salt, using a real estate broker to sell a municipal building, and donating surplus supplies to a non-profit organization.

Purchasing Road Salt

Is the purchase of road salt exempt under Chapter 30B?

No. Chapter 30B does not list road salt as an exemption. See M.G.L. c. 30B, § 1(b). Therefore, jurisdictions must follow the procedural requirements of Chapter 30B when purchasing road salt. However, Section 13 of Chapter 30B states that road salt is an exception to the statute’s 25% rule. See id. at § 13(4). Although Chapter 30B generally prohibits increasing the total quantity of supplies or services purchased under a contract by more than 25%, the statute includes an exception for contracts for certain supplies, including gasoline, fuel oil, road salt and other ice and snow control supplies. Id. This means that Chapter 30B permits jurisdictions to purchase additional road salt from a vendor under contract beyond the 25% limit that typically applies. Remember, however, that certain other conditions must be met if a jurisdiction is going to exceed the 25% limit: (1) the unit price must remain the same or less; (2) the procurement officer must specify in writing that the increase is necessary and more economical than procuring a new contract; and (3) both parties must agree to the increase in writing. See id. at § 13(1-3).

Using a Real Estate Broker to Sell a Municipal Building

Our town would like to use a real estate broker to sell a municipal building. Instead of using the procedures in Section 16 of Chapter 30B, can we hire a real estate broker to handle the sale?

Your town may hire a real estate broker to handle the sale, but you must still follow the procedures set forth in Section 16 of Chapter 30B for the disposal of real property. You must declare the property available for disposition and specify the reuse restrictions on the property, if any. M.G.L. c. 30, § 16(a). In addition, you must determine the value of the property through procedures customarily accepted by the appraising profession. Id. at § 16(b). If the property is valued at more than $35,000, you must solicit proposals. Id. at § 16(c). Chapter 30B also requires that you advertise the solicitation of proposals in a local newspaper for at least two weeks. Id. at § 16(d).

It is also important to note that using a real estate broker is a “service” as defined by Chapter 30B. See id. at § 2. Therefore, you must conduct a procurement in accordance with Chapter 30B requirements for the anticipated price of the broker’s services. For example, if the anticipated broker fee is between $10,000 and $50,000, you must solicit three written quotes. Id. at § 4. If you anticipate the broker’s fee to be more than $50,000, you must use an invitation for bids or request for proposals to procure professional services to sell the property. Id. at §§ 5-6.

Donating Surplus Supplies to a Non-Profit Organization

My school district has surplus radio equipment that it would like to donate to a local non-profit organization. Does Chapter 30B apply to this transaction?

Yes. Chapter 30B sets forth the process by which a jurisdiction must dispose of supplies that are no longer useful to the jurisdiction but have resale value.

If your jurisdiction decides to dispose of surplus supplies at less than fair market value to a 501(c)(3) nonprofit organization, your jurisdiction’s governing body must approve the disposal by majority vote. See M.G.L. c. 30B, § 15(g). We recommend that you speak with legal counsel to ensure the donation does not violate the Anti-Aid Amendment to the Massachusetts Constitution. See MASS. CONST. amend. art. 18, as amended by arts. 46 and 103. You should also verify the charitable status of the organization with your legal counsel, the Internal Revenue Service or the Public Charities Division of the Massachusetts Office of the Attorney General.

If you choose not to donate the supplies to a nonprofit organization, and the supplies are valued at $10,000 or more, Chapter 30B requires that your jurisdiction dispose of the supplies through competitive sealed bids, public auction or established markets. See M.G.L. c. 30B, § 15(b). If the supplies are valued at less than $10,000, you must dispose of the supplies by following the written procedures your jurisdiction has established for surplus supplies disposal. Id. at § 15(f). These written procedures must be in place prior to disposing of the supplies.

For additional information about the disposal of surplus supplies, please see Chapter 7 of The Chapter 30B Manual.

Date published:	February 25, 2022