Statewide Contracts
Q: Our jurisdiction wants to purchase a new computer mainframe. Our IT director found a statewide contract for the mainframe, but the cost is $75,000. My finance director insists that we cannot use the statewide contract because the value of the mainframe is over $50,000. Instead, they think that we have to put the contract out to bid and conduct our own procurement under Chapter 30B. Do we need to conduct a separate procurement, or can we use the statewide contract?
A: Your jurisdiction may use the statewide contract to purchase the computer mainframe without conducting your own separate procurement under Chapter 30B. A statewide contract is a contract that the Commonwealth’s Operational Services Division (OSD) has already procured in accordance with state procurement law on behalf of local jurisdictions and other eligible public entities. Jurisdictions do not need to follow the procedural requirements of Chapter 30B when using a statewide contract because OSD satisfied the statutory requirements when procuring the contract. See M.G.L. c. 30B, § 1(c). Chapter 30B thresholds do not apply when a jurisdiction purchases supplies or services through a statewide contract. See id.
However, there are some important points to keep in mind when using a statewide contract. First, a jurisdiction that purchases supplies or services from a statewide contract must comply with the contract’s terms and conditions. OSD’s user guide for each statewide contract outlines these requirements.
Second, the jurisdiction should verify with OSD that the statewide contract vendor is authorized to offer the specific supplies or services sought by the jurisdiction. Remember that the jurisdiction cannot alter the scope of the statewide contract or the type of product or service offered under the contract. For example, if a statewide contract offers white tents, you cannot procure a different color tent or another type of covering under that contract.
Finally, we strongly recommend that a local jurisdiction execute its own contract with a statewide contract vendor that incorporates the terms of the statewide contract. A jurisdiction should also consult with legal counsel about any additional terms and conditions to include. Remember that the jurisdiction is responsible for contract management, performance issues and payment issues relative to the contract.
Proprietary Specifications
Q: What are the Chapter 30B procurement rules concerning proprietary specifications, and how do proprietary specifications relate to sole source procurements?
A: Chapter 30B allows the use of proprietary specifications in the purchase description of supplies or services only in certain narrow circumstances.
Creating a clear and detailed purchase description is an essential part of the procurement process. See M.G.L. c. 30B, §§ 4(a), 5(b), 6(b). This description needs to be clear and detailed enough that potential respondents can understand what your jurisdiction is seeking and can determine if and how they will respond to the solicitation.
As a general rule, Chapter 30B prohibits you from including in the purchase description brand names or other proprietary specifications that would restrict the procurement to one manufacturer or supplier. Id. at § 14. However, you may include proprietary specifications if “no other manner of description suffices.” Id. If you include proprietary specifications, you must provide a written justification of why they were necessary, which you should keep in your procurement file. Id.
Even if a proprietary specification is necessary, it does not automatically mean that you can procure the supply or service from a sole source without competition. Indeed, Chapter 30B specifically directs procurement officers to procure proprietary items by competition if more than one potential bidder exists. Id. at § 7(a). For example, several vendors may sell the same brand or model of the specific item or items you are seeking. Therefore, you may be able to obtain multiple competitive quotes, bids or proposals for an item even if you use proprietary specifications.
Municipal Contracts for Energy or Energy-related Services
Q: Our town is seeking a contract for alternative energy credits to decrease its electricity bills. Does Chapter 30B apply?
A: Municipal contracts for energy or energy-related services are exempt from Chapter 30B’s procurement requirements. See M.G.L. c. 30B, § 1(b)(33). However, within fifteen days of signing a contract for energy or energy-related services, Chapter 30B requires a municipality to submit to the Department of Public Utilities, the Department of Energy Resources and the Office of the Inspector General a copy of the contract and a report of the process the municipality used to execute the contract. Id. If the contract contains confidential information pursuant to M.G.L. c. 4, § 7(s), the municipality instead must maintain a record of the procurement processes and awards for six years after the date of the final payment. Id. The OIG’s Chapter 30B Manual, available on our website, contains a sample compliance form for energy and energy-related services contracts for municipalities to fill out and submit.
Although energy and energy-related contracts are exempt, the OIG recommends that municipalities still follow the procurement process outlined in Chapter 30B for non-exempt contracts. Doing so can help a municipality obtain the best price possible through fair and open competition.
Chapter 30B and Federal Procurement Regulations
Q: Our school food service management contract expires at the end of this year. We receive funding from the U.S. Department of Agriculture (USDA) to help pay for our free and reduced-price meal programs. If we issue a request for proposals (RFP) for a new food service management contract, do we follow Chapter 30B or federal procurement regulations?
A: Most likely, both. Federal regulations require you to apply state and local procurement laws when conducting federally funded procurements, provided that the state and local procurement laws conform to federal law and regulations. See 2 C.F.R. § 200.317-318. This means that you would generally follow Chapter 30B when issuing an RFP for a school food service management contract. However, if any Chapter 30B requirement conflicts with federal law or regulations, then you would not follow those specific provisions of Chapter 30B. See M.G.L. c. 30B, § 1(d). A direct conflict between Chapter 30B and federal law and regulations is rare. If you think there may be a conflict, you should discuss it with your legal counsel.
USDA Guidance
Q: What about the USDA’s Contracting with Food Service Management Companies: Guidance for School Food Authorities (USDA guidance), which says when using an RFP, “price remains the primary consideration when awarding a contract under the competitive proposal method”? Does this mean we do not follow Chapter 30B for our RFP?
A: No. You must still follow Chapter 30B as doing so would not conflict with the federal regulations on which the USDA guidance is based. The USDA guidance requires you to award the contract to the responsible offeror whose proposal is “most advantageous to” your school, with “price and other factors considered.” USDA guidance at 54; see also 2 C.F.R. § 200.320(b)(2)(iii). This requirement is very similar to Section 6 of Chapter 30B, which requires you to award the contract to a responsible and responsive offeror with the most advantageous proposal, taking into consideration price and non-price criteria. See M.G.L. c. 30B, § 6. The USDA guidance and Chapter 30B do differ in that the USDA explicitly requires you to consider price the “primary consideration” in awarding contracts. USDA guidance at 52. However, this requirement does not conflict with Chapter 30B, which also requires you to consider price. While Chapter 30B does not make price the primary factor for determining which offer is most advantageous when using an RFP, the statute does require that you provide a written explanation when choosing a vendor who did not offer the lowest price. See M.G.L. c. 30B, § 6(h).
For more information on paying for supplies or services with federal funds, see the November 2020 issue of the OIG Bulletin.
Additional Resources
Contact for OIG Bulletin, June 2021: Frequently Asked Questions
Online
Phone
Available 8:30 a.m. to 4:30 p.m., M-F. Our confidential Hotline is for public employees and individuals with Chapter 30B procurement questions. Direct questions related to design and construction procurement to the Attorney General’s Office.
Address
| Date published: | June 9, 2021 |
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