Chapter 30B Overview: The Uniform Procurement Act

Chapter 30B Overview: The Uniform Procurement Act


Hello, my name is Glenn Cunha. I have
served as Inspector General of the Commonwealth of Massachusetts since my
appointment in 2012. Thank you for your interest in the work of our Office. As
you know, our Office is dedicated to preventing and detecting fraud, waste and
abuse in the expenditure of government funds. Because education is critical to
preventing the misuse of public funds, creating access to our training and
educational programs has been one of my priorities since 2012. With the
information you will learn today, as well as in the classes we teach, you will gain
the valuable tools that help protect government funds, in other words our tax
dollars. I’m grateful for your participation. Prevention of fraud, waste
and abuse is an important aspect of any government program, especially where
taxpayer funds are spent. If you are a government employee, or a member of a
public board or commission, learning the laws and regulations related to spending
public funds will help you do your job even better, while assisting my office in
fulfilling its vital mission. And if you are a member of the public your
participation in our programs will help ensure that our government dollars are
spent appropriately. If this is your first contact with our Office I
encourage you to go to our website and review our course schedule. Whether you
are looking for basic information on state procurement laws, or whether you
want to become a Certified Public Procurement Official, we can help you.
Please feel free to call or email our Office for more information. Thank you. Hello, my name is Natasha Bizanos.
I am Senior Counsel and Chapter 30B Director here at
the Office of the Inspector General. I’m also an instructor for the Office.
On behalf of the Massachusetts Office of the Inspector General, I want to welcome
you to our online video class entitled, Bidding Basics: An Overview of Chapter
30B, The Uniform Procurement Act. Chapter 30B
is a Massachusetts law which spells out the requirements and steps that
municipalities must follow before procuring supplies, services, and real
property. In this 30B Overview, we will talk about: who must follow Chapter 30B,
the purchasing thresholds and related requirements in Chapter 30B, the types of
purchases Chapter 30B applies to, the steps you need to take to purchase
supplies and services in the event of an emergency and the resources our Office
provides to help you prevent and detect fraud, waste and abuse. In this next
segment we will talk about Chapter 30B principles. Chapter 30B is based around four (4) guiding principles.
First, uniform procedures promote competition and fairness. Secondly, fair, robust competition saves tax dollars. Third, open and transparent processes promote
integrity and public confidence in government. And fourth,larger contracts require more formal
procedures; scaled procedures enable local governments to devote attention
and resources to larger contracts. Applicability. Chapter 30B applies to
certain governmental bodies. Let us now begin with which governmental bodies are
governed by Chapter 30B. Chapter 30B defines governmental bodies
to include Cities and Towns. This includes any of their agencies, boards
commissions, departments, authorities or instrumentalities. It also includes
Regional School Districts Horace Mann Charter Schools and Counties.
Chapter 30B does not apply to state agencies including the Executive Branch of the
Commonwealth. This includes all departments and agencies that fall under
the Executive Branch. Chapter 30B also does not apply to State Colleges
and Universities, although some colleges adopt a 30B model for their procurements.
Chapter 30B does not apply to County Sheriffs and Commonwealth Charter Schools. Chapter 30B Contracts. Now that you know which
governmental bodies must follow chapter 30B, the next question is which contracts
are subject 30B. 30B applies to the purchase of supplies. A supply includes
all property other than real property and includes: equipment such as computers,
copiers, and telephones; and materials, such as office supplies, ink and toner.
Next is the purchase of services. Services include: the furnishing of labor,
time or the production of a report. For example, janitorial services, copier and
printer maintenance, food service management contracts and a report on the
company’s strategic plan — are all examples of services. And finally, Chapter
30B applies to real property. Real property is defined as, property
consisting of land, buildings, crops or other resources still attached to or
upon the land, or improvements of fixtures permanently attached to the
land. Chapter 30B also covers the disposal of surplus supplies. Surplus
supplies include, all tangible assets with a resale or salvage value.
For example, motor vehicles, machinery, computer equipment, furniture and other
materials and supplies that you want to dispose of, would be covered under
Chapter 30B. Finally, Chapter 30B also covers the disposition of real property.
Examples of real property interests include: easements, leases and mortgages.
It is important to note that under Chapter 30B, the source of funding does
not matter. What matters is whether or not there is a contract between a
governmental body and a vendor. If there is, Chapter 30B applies.
Now, we will discuss the procurement thresholds of Chapter 30B.
In this section, we turn our attention to the competitive requirements of Chapter
30B that apply to the purchase of supplies and services. Before we continue,
do you recall the fourth principle of chapter 30B? It stated that scaled
procurement thresholds enable local governmental bodies to devote attention
and resources to larger contracts. Therefore, Chapter 30B has three
distinctive procurement thresholds. For purchases of less than $10,000,
Chapter 30B requires a use of Sound Business Practices.
For purchases of more than $10,000, but not more than $50,000, you are required
to solicit three written price quotations. For purchases of more than
$50,000, you are required to solicit competitive sealed bids or
proposals. The purchase requirements are scaled. As the total dollar value of the contract
increases, so do the procedural requirements. Now, let me introduce you to my colleague, Mark Till. Thank you, Natasha. My name, is Mark Till.
I am a Certified Fraud Examiner and instructor here at the Office of the
Inspector General. I want to welcome you to our online training class on Chapter 30B: The Uniform Procurement Act. In the
last segment, Natasha discussed the three distinctive procurement thresholds
outlined in Chapter 30B. Each procurement threshold has unique
and specific procedural requirements. We will discuss each threshold in detail
beginning with purchases with a total dollar value of less than $10,000 — the
use of sound business practices. Chapter 30B defines “sound business practices” as
ensuring the receipt of favorable prices by periodically soliciting price lists
or quotes. Chapter 30B does not specifically define the phrase
“periodically.” As a best practice, our Office recommends that you check prices
at least once a year depending on price fluctuations. You can check prices by:
examining vendor catalogs or price lists, or you may use online catalogs or
websites from companies such as amazon.com™ and WB Mason™. And finally,
you can check with other jurisdictions on the market prices they pay for supplies
or services. In addition you can solicit informal quotes as a way of testing the
market. The second threshold covers procurements with a value of at
least $10,000 but not more than $50,000: Price Quotations. Chapter 30B requires
that you solicit at least three written price quotes for procurements with an
estimated total dollar value of at least $10,000 but not more than $50,000. You
award the contract to the responsive and responsible vendor with the lowest
written price quote that meets your purchase description. If the contract
requires the vendor to make payments to your jurisdiction, you will want to award the
contract to the vendor with the highest written price quote that meets your
purchase description. Note, that you must award the contract to a responsive and a
responsible vendor. Under Chapter 30B, a responsive vendor is a person
or company who meets all of the minimum requirements specified in your written
purchase description and who has submitted all of the required
documentation. A responsible vendor has the capability, integrity and the
reliability to perform the contract as specified. You may solicit written price
quotes from three vendors that you know are responsible; in which case, the vendor
submitting the best price quote for the supply or service specified in your
written purchase description will be awarded the contract. You are not
required to accept inferior supplies or services. If a vendor submitting the
lowest quote offers a supply or service that deviates from your purchase
description, you can eliminate that offer and examine the offer from the vendor
providing you with the next lowest quote. Once you identify the best price quote
from a responsive and a responsible vendor that meets your purchase
description, you award the contract to that vendor. A written purchase
description protects you by helping to ensure that your description is accurate
and complete and it serves as a record of what you asked vendors to provide a
quote on. It also protects you by ensuring that all vendors have the same
information. Chapter 30B requires that you solicit written price quotes from at
least three vendors that customarily provide the supplies or services you are
seeking. Regardless of how you communicate the purchase description to
vendors, all vendor quotes must be in writing. As a best practice, you should
require vendors to submit quotes by a specific date and time. After you obtain
written quotes, you must identify the best price quote from a responsible
vendor that meets your purchase description. As previously stated, the
best price will usually mean the lowest price. However, if the contract will
require the vendor to make payments to your jurisdiction, then the best price
will be the highest price. Every now and then, you may have difficulty getting
quotes from three vendors. That’s okay, as long as you can document that you made
a good-faith effort to acquire three written price quotes. The law requires
that you solicit three written price quotes. Chapter 30B does not require you to obtain three written price quotes. You must document
your attempt to obtain three written quotes from vendors who reasonably could
have provided you with what you were looking for. What if after obtaining quotes you
conclude that your purchase description is inadequate to provide you with the
quality of supplies of services that your jurisdiction needs? In this case, you
do not have to award a contract at all. You can simply cancel your quote process
under Chapter 30B, Section 9, adjust your purchase description, and start the quote
process over again. The third and final procurement threshold under Chapter 30B
covers contracts with an estimated total dollar value of more than $50,000: Bids
or Proposals. The first thing you need to know about the procurement of supplies
or services with a value of more than $50,000, is that Chapter 30B allows you
two options for awarding these larger dollar contracts. Let us begin with the
Invitation for Bid or IFB process. The IFB process is a method available to all
jurisdictions when procuring supplies or services estimated to cost more than
$50,000. Under the IFB process, you award the contract to the responsive and
responsible bidder offering you the best price. The bid and quote process share a
common objective — establish written specifications that will ensure that you
obtain the best price for the supply or service you need, from a vendor that is
capable of performing the contract. The Request for Proposal or RFP process,
is an alternative method available under Chapter 30B to procure contracts for supplies and services valued at more than $50,000.
The RFP process permits you to weigh the relative merits of proposals submitted
by competing offerors. You award the contract to the responsive and
responsible offeror submitting the most advantageous proposal, taking into
consideration the proposal’s relative merits and prices.
Unlike quotes and bids, the RFP process may not always result in the selection
of the proposal that meets your quality requirements and offers the best price.
Chapter 30B still requires that you consider only responsive and responsible
proposals. Both bids and proposals share a common competitive advertised process:
two-weeks prior to the submission deadline for the bids or proposals, you
are required to advertise in a local newspaper, on the COMMBUYS website and on your
governmental body’s bulletin board or website. When should you use the RFP process
instead of the IFP process? You would use the RFP process when you want
to evaluate the relative merits of a responsive and responsible proposal
rather than selecting the responsive and responsible bidder offering the best
price as required under the IFB process. The RFP process also requires you to
establish comparative criteria which enables you to rate proposals on
qualitative features you are willing to pay more for. You only look at the price
after you complete the evaluation of the non-price portion of the proposal. The
Chief Procurement Officer or a person with authority delegated by the Chief
Procurement Officer, identifies the most advantageous proposal taking into
consideration the proposal’s evaluations and prices. The RFP process does not
require you to select the best price proposal. If you do not award the
contract to the responsive and responsible proposer offering the lowest
price proposal, you must prepare a written explanation of your reasons,
detailing your basis for determining that the quality of supplies or services under
the contract will not exceed your needs. Conversely, under the IFB process, the objective is to obtain the best price by
establishing quality requirements that will ensure that you obtain the quality
of supplies or services you need from a vendor that is capable of performing the
contract. Before we continue, let us take a moment to review what we’ve learned so
far. We begin with the discussion of the four principles on which Chapter 30B is
based, the different governmental bodies that must follow Chapter 30B,
as well as the type of contracts subject to Chapter 30B. And finally, the three procurement thresholds and their related procedural
requirements. Now, let us look at two specific types of purchases that create
your own unique set of challenges, beginning with Proprietary Specifications.
Occasionally, a situation will arise where someone will specify
that your jurisdiction procure a specific brand name supply or service.
Under Chapter 30B, a brand name is referred to as a Proprietary Specification.
On your screen are four examples of common brand-name vendors.
In general, we recommend that you avoid specifying a brand name when preparing
your purchase description or scope of service. In fact, Chapter 30B prohibits
the use of a proprietary specification unless, no other manner of description
suffices. And then, you must provide a written justification for your decision
and keep this document in your procurement file. You may be asking: why the prohibition on brand-name products or services? The reason is
simple: the use of a proprietary specification in effect, restricts competition
to a single supplier service that can be provided by only one
particular manufacturer or supplier. As a result, you may end up paying more
taxpayer dollars for a supply or service that is available from other vendors.
For example, the school nurse specifies band-aid™ brand adhesive bandages.
The generic description for the supply is an adhesive bandage with an absorbent center.
Under Chapter 30B you may use proprietary specifications
only when there is no other way to describe the supply or service you need.
For example, you are asked to purchase vacuum flasks for workers to allow them
to keep their coffee hot and their ice water cold. It is unlikely that the requester
used the phrase vacuum flasks. Instead, they probably specified the
brand name most associated with the product — Thermos™. If you believe that you
are justified in using proprietary specifications, you must document your
reasons in writing, and be prepared to defend your decision if a vendor protests.
Our Office finds that a governmental body will use a brand name
as shorthand to describe the characteristics of the product or service
they wish to procure. The brand name is usually followed by the phrase
“or equal to:” for example, Crayola Crayons™, or equal to. As a best practice our
Office discourages the use of an “or equal” clause. Instead, we recommend that
you specify characteristics or design features that you need. For example,
the type and amount of wax used in a crayon, the uniformity of the crayon
color or the specific shade of red that you need, require that crayons do not
have added chalk powder or talc. Keep in mind that even when you need to
use a brand name, you can often generate competition for the contract. If you
decide to purchase Crayola Crayons™, you will likely find that multiple vendors sell
Crayola Crayons™ at competitive prices. If you specify a brand name, you
must prepare a written determination justifying the use of the proprietary
specification. If you cannot comfortably defend your decision to specify Crayola
Crayon™s or any other brand name for that matter, it is a good indication that you
should not use a proprietary specification. The second example of a
special procurement with a unique set of challenges is Emergency Contracts.
Emergency Contracts of supplies and services are allowed under Chapter 30B, if
the time required to comply fully with a requirement of Chapter 30B
would endanger the health or safety of people or their property. In that case,
the governmental body may procure the needed supply or service without
complying with that particular requirement. Examples include: a flood
requires you to remove water from the basement of the building that houses the
police 911 dispatch or the defibrillator on an EMS vehicle is broken. Even under
these circumstances, Chapter 30B requires compliance to the extent practicable. For
example, if you do not have time to advertise bids for two weeks prior to
the bid opening, you may shorten or waive the advertising period. If you do not
have time to seek bids, you can solicit quotes. In addition, you may only procure
those supplies or services necessary to meet the emergency. Regardless of the
nature of the emergency or procurement process used, Chapter 30B contains
specific documentation and notice requirements. Chapter 30B requires the
following information be recorded: the basis for determining that the emergency
exists; the vendors name; the contract type and amount; a list of supplies and
services procured on an emergency basis; and the procedures used to solicit
competition. Finally, you must submit a record of the emergency procurement to
the Goods and Services Bulletin published by the Secretary of the
Commonwealth, as soon as possible after the emergency. It is important to
remember that Chapter 30B only allows you to shorten or waive procurement
requirements as a result of an actual emergency. Under Chapter 30B, an emergency
occurs if the time required to comply fully with a Chapter 30B requirement
would endanger the health or safety of people or their property, due to an
unforeseen set of circumstances. You may not artificially create an emergency by
simply putting off normal maintenance work. If you knew, or should have known,
something needed service, and you had the time to fix it using the normal bidding
process, you will have difficulty justifying the use of emergency
procedures to procure supplies and services when a problem arises.
The last Chapter 30B topic covers two prohibited actions — Bid Splitting and
Invalid Contracts. Be aware that Chapter 30B prohibits Bid Splitting. What the law
says is “that no person shall cause, or conspire to cause, the splitting or
division of any purchase for the purpose of evading a requirement of this chapter.”
An example of bid splitting is when you know that you need to order $20,000 worth
of paper, a procurement that requires the jurisdiction to solicit three written
price quotes. Instead of using the price quotation process, you intentionally
split each procurement into four five thousand dollar purchases that each fall
below the $10,000 threshold for competitive price quotations.
Now, sometimes there is a sound business reason for making multiple purchases of
the same item or items. For example, the food service department often makes
frequent purchases of fruits and vegetables because the market prices
fluctuate. If you have a sound business reason for your purchasing strategy, it
will not be considered bid splitting. If you are concerned that your plan to make
multiple purchases of an item of service could be viewed as bid splitting, please
contact our office to discuss the issue. The last topic covers Invalid Contracts.
Under Section 17 of Chapter 30B, a contract made in
violation of the chapter shall not be valid. This is a long-standing rule in
Massachusetts that applies where a violation of Chapter 30B has occurred —
even if all parties acted in good faith. However, minor informalities in the
contracting process will not invalidate a contract. An enforcement provision
contained in Chapter 30B prohibits any payment by a local jurisdiction under an
invalid contract — even if supplies have been delivered or work has been
performed. Now, let me reintroduce my colleague, Natasha Bizanos, who will
discuss the resources the Office of the Inspector General provides to help you
prevent and detect fraud, waste and abuse. Natasha. Thank you, Mark. The Office of the
Inspector General administers the Massachusetts Certified Public
Purchasing Official program also known as MCPPO. The MCPPO training program is
designed to help public purchasing officials operate government programs
effectively and to promote excellence in public purchasing. MCPPO classes include
live trainings on a variety of procurement topics, video conferences,
on-site specialized trainings and outside speaking engagements. You can
find a complete listing of current classes and seminar registration forms
by visiting our website at www.mass.gov/ig. If you have any question on a Chapter
30B matter, please call our 30B Hotline at 617-722-8838. We are available to answer questions daily Monday through
Friday from 9:00 a.m. to 4:30 p.m. If you’d like to report fraud, waste or
abuse, please call our fraud Hotline at 1-800-322-1323. Our website, www.mass.gov/ig, is a treasure trove
of information. It includes news and updates on a variety of topics, as well as our
quarterly Procurement Bulletin. You can access every Procurement Bulletin issued
by our Office and are able to search our index by subject name to get your
questions answered. We also have a couple of publications. The two procurement manuals
are The Chapter 30B Manual for Procuring Supplies, Services and Real Property, as
well as the Designing and Constructing Public Facilities manual, also available
on our website. For more information please visit www.mass.gov/ig. We can be reached at 617-727-9140.
Thank you Again, thank you for taking the time to participate
in this online training program.

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