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OIG Bulletin, November 2020: Are You Paying for Supplies or Services with Federal Funds?

Recently, our Chapter 30B hotline has received a number of calls asking whether Chapter 30B applies when a local jurisdiction pays for supplies or services with federal funds. The short answer is: it depends.

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Determining When Chapter 30B Applies

Generally, Chapter 30B applies even when a local jurisdiction uses federal funds to pay for supplies or services. Federal regulations require a local jurisdiction to apply state and local procurement laws for federally funded procurements, provided that the procurements also conform to federal law and regulations. See 2 C.F.R. § 200.317-318.

However, Chapter 30B does not apply to federally funded procurements if following Chapter 30B would conflict with federal laws or regulations. See M.G.L. c. 30B, §1(d)Therefore, when your jurisdiction uses federal funds to pay for supplies or services, you need to check your federal funding documents and any other federal guidance applicable to the type of funding you received to determine which procurement laws to follow. (For instance, the Department of Justice (DOJ) publishes a guide to procurements using DOJ grant funds.)

If you are still unclear about the requirements for your particular source of funding, we recommend that you contact the grantor or federal funding entity for clarification.

    Important Reminders

    1. Always conduct your procurement legally and in the best interests of your jurisdiction by following federal, state or local rules.
    2. If you seek federal reimbursement for your supplies or services procurement ‒ meaning that you make the purchase first ‒ then you generally must abide by the requirements of Chapter 30B.
    3. If you do not follow Chapter 30B because of federal requirements, make sure you document this in writing in your procurement file.
    4. Federal procurement laws and regulations typically require that you use a fair, open and competitive process, even though price thresholds, advertising requirements and contract award language may differ from the requirements of Chapter 30B. See, e.g., 2 C.F.R. § 200.319-320 (describing the competitive processes required for procurements made with federal funds).
    5. Purchases made directly from the federal government are exempt from Chapter 30B. See M.G.L. c. 30B, § (1)(b)(9).
    6. Purchases made from a vendor pursuant to a General Services Administration federal supply schedule, available for use by governmental bodies, comply with the requirements of Chapter 30B. See M.G.L. c. 30B, § 1(f).
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