Do the State’s procurement laws apply to CPA projects?

August 2008 (updated Novermber 2014): One of the most common questions we receive on The Coalition’s technical assistance hotline is whether the state’s procurement and prevailing wage laws apply to CPA projects, particularly grants to private groups. The answer may not always be straightforward, since many projects involve unique circumstances, but this article provides some general information to help guide you on this issue.   

When might procurement and prevailing wage laws apply to CPA projects? Does it matter if a private organization is orchestrating the project?

The procurement laws are multiple state statutes that deal with various aspects of municipal procurement including building construction, public works construction, design services, supplies, services, and real property. In addition, prevailing wage laws apply for construction projects undertaken by public entities in the state as well as to some limited services provided to them.

For the purposes of describing the applicability of procurement laws to CPA projects, there are three main categories that CPA projects could fall into: capital improvement projects, the purchase of real property, and contracting for professional services. Each of these three project categories must adhere to different procurement laws as explained in more detail below.

Capital Improvement Projects (MGL c.149 and c.30 s.39M)
Capital improvement projects are “brick and mortar” projects such as creation of a new playground, restoration of a building, construction of housing, wetlands restoration, etc.

The matrix below very generally describes how the procurement laws may apply to the various types of capital improvement projects, depending on who owns the property and who administers the project.   

Property Owner

Project Administrator

Do Procurement & Prevailing Wage Laws Apply?

Municipality/State/Other public entity

Municipal/State/Other Public Entity

YES

Municipality/State/Other public entity

Community Group (e.g., PTO, friends group, neighborhood association, etc.)   

YES*

Private entity (non-profit organization, private citizen, etc.)

Private entity

NO

Municipally owned and leased by private entity

Private leasing entity

POSSIBLY**

*Note:  Even if a service is discounted or donated, prevailing wage may still apply.
**Note:  For complex situations, an opinion from municipal counsel or the Attorney General’s Office may be needed.

Acquisition of Real Property (MGL c.30B)
Acquisition of real property includes buying land, buildings, artifacts or a real estate interest (such as a deed restriction). The purchasing laws (c.30B) that apply to acquisition of real property using public funds deal with how to establish fair market value. This area of the law makes a special exception specifically for real property acquired with Community Preservation Act funds. 

The Community Preservation Act (MGL c.44B s.5(f)) states that “Section 16 of chapter 30B shall not apply to the acquisition by a city or town of real property or an interest therein . . . no such real property, or interest therein, shall be acquired . . . for a price exceeding the value of the property as determined by such city or town through procedures customarily accepted by the appraising profession as valid.” 

The bottom line is: Acquisitions of real property interests under CPA are exempt from MGL c.30B, but you must get an appraisal prior to acquiring any real property interest. And the municipality cannot appropriate more than the appraised value to acquire the real property interest.

Contracting Professional Services (MGL c.7 s.44-57 and c.30B)
Contracting professional services includes hiring a housing consultant, planner, appraiser, landscape architect, etc. 

MGL c.7 s.44-57 applies when procuring design services for public building projects and establishes a designer selection process for construction projects with estimated pricetags over $100K and estimated design fees of $10K or more. Prevailing wage does not apply to these types of design services. 

MGL c.30B applies to other professional services and establishes three monetary thresholds that trigger different selection and procurement procedures, with the most latitude established for contract amounts under $10K. If a contract is between $10K and $34,999, then three quotes must be solicited. And, for contracts at and over $35K, sealed bids or proposals are required.

More Information
The procurement and prevailing wage laws are complicated – they apply in various ways depending on circumstances of the situation and sometimes exemptions may apply. That is why it’s important to ask the advice of your procurement officer, town counsel, and/or the appropriate state agency, as described below.

General Procurement
The Massachusetts Inspector General’s Office has created a helpful chart for use as a reference guide on public procurement laws. In addition, the Inspector General’s Office website has a variety of helpful information available, and the phone numbers below can be used to obtain more information. 

Goods, Services, and Real Property (MGL C.30B)
Inspector General’s Office MGL C.30B hotline: 617-722-8838

Construction and Design Services
Attorney General’s Office, Div. of Fair Labor: 617-727-3465

Prevailing Wage
Department of Labor Standards: 617-626-6953