CLIENT ALERT
By Janet B. Fierman
On November 7, 2016, Chapter 218 of the Act of 2016, “An Act modernizing Municipal Finance and Government”, became effective. Among other things, Sections 2 through 12 of Chapter 218 change the public bid laws for government construction, procurement and repair projects by amending Chapter 30, Section 39M and making related changes to Chapter 30B and Chapter 149, Sections 44Ato 44J. Its changes affect advertising, bid amount thresholds and bidding procedures for municipalities and other public entities subject to public bid laws.
The new Section 39M specifically states that contracts estimated to cost less than $10,000 shall be obtained through the exercise of “sound business practices” (defined as “ensuring the receipt of favorable prices by periodically soliciting price lists or quotes”). Use of blanket contracts (aggregating different needs into a single contract) is defined as sound business practice. Using vendors on a statewide contract procured through the Massachusetts Operational Services Division also is defined as sound business practice.
Contracts estimated to cost between $10,000 and $50,000 require notice/advertisement and use of a written scope-of-work statement to solicit written responses from no fewer than three persons who customarily perform such work. The awarding authority must award the contract to the responsible bidder offering to perform the contract at the lowest price. Use of blanket contracts is authorized here, too. In addition, awarding authorities are specifically authorized to use blanket contracts to “establish a listing of vendors in certain defined categories of work that are under contract to provide services for multiple individual tasks of not more than $50,000 each, and from whom written responses will be sought”.
The revised Section 39M increases the threshold for the next category of bids (submission of sealed competitive bids, public opening, award to the lowest eligible, responsible bidder) to $50,000. It also eliminates Chapter 30B, Section 23 (cooperative purchasing agreements).
* * *
Janet B. Fierman is a Shareholder at Sheehan Phinney and a member of the firm’s Corporate Department.
This article is intended to serve as a summary of the issues outlined herein. While it may include some general guidance, it is not intended as, nor is it a substitute for, legal advice.