M.G.L. c. 30B Bidding Basics
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1 M.G.L. c. 30B Bidding Basics Office of the Inspector General Commonwealth of Massachusetts Massachusetts Treasurers and Collectors Association August 14,
2 M.G.L. c. 30B: Applicability Cities Towns Districts Regional school districts Counties Agencies, boards, commissions, local authorities, departments, or instrumentalities of the above 2
3 M.G.L. c. 30B: Applicability Contracts for: Purchase of supplies and services Sale of surplus supplies Public works construction estimated to cost more than $10,000 but not more than $25,000 Real property acquisitions and dispositions 3
4 M.G.L. c. 30B: Exemptions include Issuance of bonds, notes, securities Insurance Labor relations representatives, lawyers, designers, or CPAs Retirement board services Collection of delinquent taxes Deputy tax collector services Deferred compensation plans 4
5 M.G.L. c. 30B: Exemptions include Contracts that: are funded by proceeds derived from a gift to a governmental body or a trust established for the benefit of a governmental body provide job-related training to government employees 5
6 M.G.L. c. 30B: Exemptions include Contracts that: are with another state, local or federal entity are between agencies, boards, commissions, authorities, departments, or public instrumentalities of one city or town 6
7 M.G.L. c. 30B: Exemptions include Compensating Balance Law allows a jurisdiction to obtain banking services in exchange for maintaining a minimum balance on deposit rather than paying direct fees for such services 7
8 M.G.L. c. 30B: Exemptions include Compensating Balance Law Compensating balance contracts are subject to the provisions of section 53F of M.G.L. c. 44, and rules established by the state Department of Revenue (DOR) Questions? Call DOR s Division of Local Services: (617)
9 M.G.L. c. 30B: Applicability Banking services in exchange for direct fee payment financial advisory services computer hardware, software, and consultants 9
10 Definition of Services Services does not include Grant agreements; Employment agreements; or Collective bargaining agreements 10
11 Collective Procurements Statewide Contracts & Commonwealth Department Contracts c. 30B, 1(c) & c. 7, 22A (Operational Services Division ) Collaborative purchases c. 30B, 1(c) & c. 7, 22B GSA federal supply schedules c. 30B, 1(f) Cooperative contracts c. 30B, 22 & c. 7, 22A 11
12 Supplies and Services Procurement Less than $5,000 sound business practices Between $5,000 and $25,000 Solicit 3 price quotes (oral or written) $25,000 or more competitive sealed bids or proposals 12
13 Supplies and Services Sound Business Practices Sound business practices defined as ensuring receipt of favorable prices by periodically soliciting price lists or quotes M.G.L. c. 30B, 2. 13
14 Supplies and Services: Price Quotes At least $5,000 but less than $25,000: Develop a purchase description Provide to at least three vendors The law requires that you solicit three quotes, not that you receive three quotes Request quote by phone, mail, fax, Award contract to the lowest-priced vendor that meets your purchase description 14
15 Supplies and Services: Price Quotes Record: Names and addresses of every vendor contacted for quotes Name of each vendor that submitted quote Date and amount of each quote received Record must be kept for six years from the final date of payment under the contract 15
16 Supplies and Services: Invitation for Bids (IFB) $25,000 or more: Prepare the IFB Advertise and distribute the IFB Receive, open, and record bids Evaluate bids Award contract to the responsive and responsible bidder offering best price Retain records 16
17 Preparing the IFB IFB includes: Purchase description/scope of services Quality requirements Standard forms Rule for award Contract terms and conditions Bid submission requirements 17
18 Purchase Description/ Scope of Services Describe your needs in sufficient detail to ensure realistic, comparable prices Don t forget to include delivery terms, warranty requirements, training or technical support 18
19 Quality Requirements Specify standards of quality for the supplies or services to be procured Ex: Laser printer must be able to print at least 15 black and white pages per minute Specify qualifications that a vendor must possess in order to properly perform the contract Ex: Vendor must have 5 years of experience working with jurisdictions of a similar size 19
20 Standard Forms Certificate of Good Faith ( non-collusion form ) Must be submitted by bidders with their bids Should be included in IFB package Price form should be included in IFB Bidders must also sign a Tax Compliance Certification (M.G.L. c.62c, 49A) 20
21 Rule for Award and Best Price The rule for award tells bidders how you will determine the best price Use a rule for award for multi-item bids: One contract for all items: The contract will be awarded to the responsive and responsible bidder offering the best price. Multiple contracts: The contract(s) will be awarded to the responsive and responsible bidder offering the lowest price for each item. 21
22 Contract Terms and Conditions Provide vendors with a copy of the contract that the successful bidder will be required to sign Consult with your legal counsel to develop a standard contract Consult the checklist in Chapter 2 of the IG s manual 22
23 Bid Submission Requirements Date and time when sealed bids are due Address where bids must be delivered Any instructions on how to mark bid packages Maximum amount of time you reserve to award the contract Instructions on correcting, modifying, or withdrawing bids 23
24 Advertising the IFB The advertisement must: State where, when, and for how long the IFB may be obtained Describe the supply or service needed Include a notice that your jurisdiction reserves the right to reject any/all bids Identify any board (or other body) that must approve the contract 24
25 Advertising the IFB Publish the ad in a local newspaper at least two weeks before bid due date Post the ad in your jurisdiction for at least two weeks, up to the bid due date If the purchase will cost $100,000 or more, advertise in the Goods and Services Bulletin, published by the Secretary of State 25
26 Receiving, Opening, and Recording Bids Open all bids at the time specified in the IFB Open bids in an open meeting or in front of one or more witnesses Reject any late bids Keep a record of the names of all bidders and the amounts of the bids All bids are public records 26
27 Evaluating Bids Follow the rules in your IFB Be consistent and fair Determine whether the bidder offering the best price is responsive and responsible 27
28 Evaluating Bids Responsive : Bidder offers what was specified in IFB Responsible : Bidder has the capability, integrity, and reliability to perform the contract 28
29 Final IFB steps Select the responsive and responsible bidder offering the best price Award and execute the contract Retain records for six years from the final date of payment under the contract Monitor contractor performance for the term of the contract 29
30 Construction Materials (No Labor) Procurements of construction materials (no labor) in excess of $10,000 are subject to M.G.L. c.30, 39M(a)(public construction) HOWEVER Jurisdiction may elect to use M.G.L. c.30, 5 IFB process instead. M.G.L. c.30, 39M(d)(5) For either option advertisement in the Central Register in addition to statutory advertising requirements 30
31 Supplies and Services: Request for Proposals (RFP) $25,000 or more: Jurisdiction must have appointed a CPO Use when there are factors in addition to price that you want to compare and you may be willing to pay more money for CPO must make a written determination that the selection of the most advantageous offer requires comparative judgments in addition to price before soliciting proposals 31
32 Unique RFP Requirements Develop comparative evaluation criteria for the specific features for which you might be willing to pay more money Decide how comparative criteria will be used to rate proposals Highly advantageous Advantageous Not advantageous Unacceptable Specify in RFP the factors that will differentiate each rating 32
33 Comparative Criteria Quality requirement At least three (3) years of relevant experience. (HA) The proposer has at least five (5) years of experience consulting with municipalities on projects of similar size and scope to this project. (A) The proposer has at least three (3) years of experience consulting with municipalities on projects of similar size and scope to this project. 33
34 Unique RFP Requirements Price and non-price proposals must be sealed in separate envelopes Proposals may not be opened publicly Non-price proposals must be opened at time specified in the RFP in front of one or more witnesses Register of proposals must be prepared and made available for public inspection 34
35 Unique RFP Requirements Individual(s) responsible for evaluating nonprice proposals may not see price proposals until the evaluation of non-price proposals is complete Most advantageous proposal is selected, taking into consideration proposal evaluations and proposal prices Proposals do not become public records until after the evaluation process is complete 35
36 Supplies and Services: Proprietary Specifications Cite a brand name or have the effect of restricting the procurement to one product Purchasing official must Document the procurement file with written justification that no other manner of description suffices Advertise and solicit competition as required by Chapter 30B. 36
37 Supplies and Services: Proprietary Specifications Examples of Proprietary Specifications Uniformity Crown Victoria automobiles Superior quality Windex Reliability Crayola crayons Can you certify (in writing) that no other manner of description will suffice? 37
38 Supplies and Services: Sole-Source Procurements Sole-source procurement: The award of a new contract for supplies or services to a single source, without soliciting price quotes, bids, or proposals Permitted only for contracts under $25,000, except: Educational materials, library books, and software maintenance if only one practicable source Regulated utilities: water, gas, electricity, sewer, and telephone if only one practicable source 38
39 Supplies and Services: Sole-Source Procurements Before making a sole-source procurement: Conduct a reasonable investigation to determine whether competition exists Document in writing that only one practicable source for the supply or service exists 39
40 Supplies and Services: Sole-Source Procurements Record of sole-source procurement must include: Vendor s name Contract amount and type List of supplies or services procured Written determination that only one practicable source existed 40
41 Supplies and Services: Emergency Procurements When the time needed to comply with any requirement of M.G.L. c. 30B would endanger the health or safety of people or their property, you may waive that requirement You must comply with M.G.L. c. 30B to the extent practicable 41
42 Supplies and Services: Emergency Procurements Document: Basis for determining that the emergency exists Vendor s name Contract type and amount List of the supplies or services procured Procedures used to solicit competition Submit the record of emergency procurement to 42 the Goods and Services Bulletin
43 Disposal of Surplus Supplies Advertised sealed bid process or public auction required for disposal of surplus supplies with net resale or salvage value of $5,000 or more May award to highest bidder or reject all bids and negotiate a sale price higher than the highest bid Dispose of supplies with a resale or salvage value of less than $5,000 following written procedures approved by the governmental body 43
44 Disposal of Surplus Supplies You can swap or sell surplus supplies within your own local government or with other local and state governments, the federal government or the Commonwealth These transactions are exempt from the surplus supply disposal procedures of Chapter 30B because they are intragovernmental agreements and intergovernmental agreements 44
45 Disposal of Surplus Supplies eprocurement: Chapter 30B and Online Auctions, Read together with Selling Surplus Supplies through online Auctions, Volume 12, Issue 2, May 2006, OIG s online Procurement Bulletin, p. 5, 45
46 Real Property Transactions Competitive procedures apply to real property and interests in real property Acquisition with a cost over $25,000 Disposition with a value over $25,000 Advertised proposal process required Other state statutes and municipal rules may apply 46
47 Interest in Real Property: Examples Fee/ownership Lease/rental or tenancy Easement Mortgage Option to purchase real property Licenses are NOT interests in real property 47
48 Real Property Acquisitions Determine needs Develop the RFP Advertise for proposals In local newspaper at least once per week for two consecutive weeks before proposal opening date, the second ad must appear at least eight days before the proposal opening date In the Central Register at least 30 days before proposal opening date if property exceeds 2,500 square feet 48
49 Real Property Acquisitions Distribute RFP Open and evaluate proposals Select proposal Execute contract and retain records Submit disclosures Publish name of selected proposer and transaction amount in the Central Register Submit disclosure of beneficial interests to the Division of Capital Asset Management (DCAM) 49
50 Disclosure of Beneficial Interests No contract to lease or sell property, or to lease or purchase property, is valid until disclosure is filed with DCAM List true names and addresses of all persons who have or will have a direct or indirect beneficial interest in said property Signed under the penalties of perjury 50
51 Real Property Acquisitions: Special Circumstances Emergency acquisition permitted when time required to comply would endanger health or safety of people or their property Central Register disclosure required ASAP Unique acquisition permitted when specific location or qualities of property satisfy unique requirements of jurisdiction Central Register disclosure required 30 days before binding agreement is executed 51
52 Real Property Dispositions Declare that the property is available and determine whether there are any restrictions on its subsequent use Determine the value of the property using procedures customarily accepted as valid by the appraising profession Develop the RFP 52
53 Real Property Dispositions Advertise for proposals In local newspaper at least once per week for two consecutive weeks before proposal opening date, the second ad must appear at least 8 days before the opening of proposals In the Central Register at least 30 days before proposal opening date if property exceeds 2,500 square feet Distribute RFP 53
54 Real Property Dispositions Open and evaluate proposals Select proposal Execute contract and retain records Submit disclosures Publish name of selected proposer and transaction amount in the Central Register, including the difference between the fair market value and the price to be received and the reason for the decision, if applicable Submit disclosure of beneficial interests to the Division of Capital Asset Management (DCAM) 54
55 Real Property Dispositions: Special Circumstances Emergency disposition permitted when time required to comply would endanger health or safety of people or their property Central Register disclosure required ASAP Note that unique acquisition provision does not apply to real property dispositions If you are disposing of property for less than the fair market value, and the value of the property is less than $25,000, you are required to post a notice in the Central Register stating the difference between the fair market value and the price to be received along with the reasons for the decision 55
56 Bidding Basics M.G.L. c. 30B Questions? Supplies Services Real Property 56
57 Office of the Inspector General Procurement Assistance Massachusetts Certified Public Purchasing Official (MCPPO) programs: Public Contracting Overview Supplies & Services Design & Construction CM at Risk Three day courses/reasonable prices CPE & PDP credits 57
58 Office of the Inspector General Procurement Assistance Massachusetts Certified Public Purchasing Official Assistance Joyce McEntee Emmett, MCPPO Director To register: 58
59 Chapter 30B Procurement Assistance OIG Publications found at mass.gov/ig The Chapter 30B Manual: Legal Requirements, Recommended Practices, and Sources of Advice for Procuring Supplies, Services, and Real Property (6 th ed.)(5/11)(the Chapter 30B Manual) The Procurement Bulletin (Published quarterly) 59
60 Chapter 30B Procurement Assistance OIG Publications found at mass.gov/ig (cont d) The Practical Guide to Drafting Effective Invitations for Bids and Requests for Proposals Charts on Public Procurement Procedures 60
61 Office of the Inspector General Procurement Assistance Chapter 30B Attorney of the Day (617) (phone) 9:00 a.m. to 4:30 p.m. 61
62 QUESTIONS OR COMMMENTS Nicholas Read, Deputy General Counsel Office of the Inspector General One Ashburton Place Room 1311 Boston, Massachusetts (t) (f) (e) 62
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