Personal services contracts and equipment purchases freeze - Q&A
- General application of the freeze
- How the contract purchase process differs from freeze directive process
- Effective date of freeze directive
- Exemption process
- Personal services contract freeze
- Equipment purchase freeze
Yes. Only contracts/equipment purchases that are fully funded by a private grant or federal funds are exempt from the freeze. If the contract or equipment purchase requires state matching funds or any state dollars, you must submit an exemption request to OFM for approval.
Yes, agencies may still enter into funded grant agreements with other entities, both public and private. Agencies do not need to submit an exemption request for these agreements.
Yes, they are exempt if they are funded through bond proceeds.
Yes, agencies may submit an exemption request for a “class” of purchases/engagements. OFM will review the items in the “class” and will determine whether a class exemption is appropriate. If the class exemption is not appropriate, OFM will ask the agency to submit individual exemption requests.
No. However, if an agency determines that a contract or purchase meets one of the exemptions, it must document in its contract file how and why it made that determination.
Approved information technology projects are those which have gone through the Office of the Chief Information Officer process. Projects are approved in phases or gates. Contracts for the current approved phase or gate of the project are the only contracts exempted from the freeze.
Yes, if the contract meets this criteria, then it is exempt from the freeze.
It depends. Generally, amendments to existing contracts are subject to the freeze, and agencies must submit the amendments to OFM for approval. However, agencies do not need to submit zero-cost amendments and administrative amendments (for example, changing the contract manager) for approval.
It depends. If the agreement would be subject to the freeze directive if it had been entered into with a non-governmental organization, then the interagency/intergovernmental agreement is not exempt from the freeze and the agency must submit an exemption request. Agencies may not enter into interagency or intergovernmental agreements to circumvent the freeze requirements.
Yes, as long as the contract meets the definition in RCW 39.26.130 for the protection of life or public safety. These emergency contracts would fall within the directive’s exemption for contracts related to the protection of life or public safety. However, agencies must still file all emergency contracts with DES pursuant to the statute.
Such purchases are not automatically exempt under the governor’s directive. However, there may be sufficient justification to obtain an exemption from OFM. Agencies should submit an exemption request and clearly articulate how the purchase will drive economic recovery.
No, if the contract is to provide these services for a project listed in the enacted capital or transportation budget and is funded by bond proceeds. If an agency uses a fund source other than bond proceeds, it must submit an exemption request.
It depends. It is the subject matter of the contract that determines whether it is subject to the freeze, not the method of procurement.
Yes. The agency must submit an exemption request to OFM to go forward with whatever procurement method is appropriate for the purchase.
Yes. OFM’s approval of your request is for the expenditure of funds only. All other legal, policy, and authorizing requirements continue to apply.
Yes. Competitive solicitations that are in process, but for which a contract has not yet been awarded, must be submitted to OFM for approval.
If the agreement is partially signed before the effective date of the freeze, but the effective date of the contract is after the freeze, the agency should reassess if it should still go forward with the agreement. Although OFM will not require the agency to obtain an exemption, the agency should document in its contract file the assessment it made and why the agreement should go forward.
Yes. OFM’s approval is for the expenditure of funds, not the procurement method. It is the subject of the purchase that will determine whether the acquisition is exempt from the freeze.
If no material commitment has been made, then the agency should determine whether continuing the purchase is warranted. If yes, then submit an exemption request to OFM. The agency may suspend the procurement while awaiting a response. OFM’s response will determine whether you must cancel the procurement.
If no material commitment has been made, the agency should determine whether announcing the apparently successful bidder is warranted. If yes, then submit an exemption request to OFM.
The agency should determine whether executing the contract is warranted. If yes, then submit an exemption request to OFM.
Please send your request to ExemptionRequest@ofm.wa.gov. If you send it to any other e-mail account, you will likely experience a delay in the review of your request.
OFM will review and approve or deny exemption requests as quickly as possible. To ensure a timely response, agencies must fully complete the exemption form with all the requested information, including the signature of the agency director. Other helpful tips include:
- Be clear and concise in your request.
- Context is important to our review. Please provide enough substantive information to show that the purchase is necessary to support your agency’s mission critical activities and/or operational requirements.
- Please provide a complete, succinct description of your justification.
- Spell out acronyms and provide a description of the program/project/business activity.
- Before you submit your exemption request, contact your OFM budget analyst to determine the likelihood of it being approved.
Requests will be reviewed by the OFM contract lead and budget analyst for the agency. Together, they will make a recommendation to the assistant directors for Legal and Legislative Affairs and Budget as to whether the request meets the exemption requirements. The assistant directors will brief the OFM director, who will make the final decision. OFM will then communicate the approval or denial to the agency via email.
OFM will grant an exemption request if the contract is necessary to provide critical services related to the agency’s continuity of operations or to fulfill its statutory responsibilities. OFM will consider the following:
- Is the related operation or activity critical?
- Is there no other way to achieve this support?
- Is the risk/liability for failure to receive this support greater than the cost of the contract?
- What is the state of the agency’s budget?
This is not an exclusive list, but it represents the main criteria OFM will use in making its determination.
OFM will email approved and denied exemption requests to the director of the requesting agency.
No. By signing the request, your agency head acknowledges that the exemption request is a critical need for your agency.
If the agency head is going to be unavailable for a period of time and must delegate signature authority to another manager for that period of time, the other party may sign exemption request forms. Include the explanation and/or attach a copy of the signature delegation to your request. If there is no formal delegation of signature authority and the director is unavailable to sign, explain why the agency head is not available to sign the request.
No. That’s why it is important to clearly and fully articulate the mission critical case for your exemption from the start.
Possibly. As we move through the process, OFM may post exemption request examples to show the level of clarity, reason, and thoroughness that is required. We do not want agencies to use these examples as templates. Agencies should use them as a resource to prepare justifications that fit their unique circumstances.
For the purposes of the contract freeze under the governor’s directive, personal services contracts are agreements with contractors for labor, work, analysis, or similar activities provided by a contractor to accomplish a specific scope of work.
The exemptions in chapter 39.26 RCW represent contracts that do not have to follow the procurement rules. Those exemptions are not the same as the exemptions in the governor’s directive. The only contracts that are exempt from the directive are those that fit within the following categories specifically listed in the directive:
- The protection of life or public safety
- Tax collection of other revenue-generating activities
- Those funded exclusively from private or federal funding sources
- Approved information technology projects, and
- Other essential categories included in guidelines established by OFM.
Contracts necessary for hazardous materials response and emergency cleanup are exempt because they support the protection of life and public safety. Agencies must submit non-emergency environmental and cleanup contracts so OFM can determine if they address the protection of life or safety.
Agencies can use the revenue generating exemption only when the costs for services relate to the generation or collection of revenue for the state. If an agency pays for a contract with agency fees that does not support revenue generation, OFM does not consider it revenue generating for purposes of the governor’s directive. Contracts related to the sale of lottery tickets and Discover Passes, or to recover unpaid taxes are examples of revenue generating activities.
Purchased services that support the operations of an agency (such as interpreters) or maintain agency facilities (such as janitorial services) will generally be exempt from the freeze. If you are unsure whether your agreement meets either of these categories, please contact OFM Contract Services.
Because the purpose of the governor’s directive is to reduce spending, zero-cost amendments will generally be acceptable if they don’t indirectly obligate future costs. Deduct amendments are also acceptable.
Yes. An agency must request a preliminary opinion from OFM before proceeding with the second-tier competition.
Yes. Agency convenience contracts are awarded competitively for the agency’s own use. They are typically awarded to multiple firms to provide quick access to services on an as-needed or on-call basis. Work orders or task orders issued under an agency’s convenience contracts are subject to the freeze.
Yes. The freeze on equipment purchases does not apply to equipment:
- with a cost less than or equal to $5,000,
- necessary to protect life or public safety, or
- funded by private or federal grants.
Equipment means furniture, equipment, and software typically accounted for in Objects JB, JC and JQ (noted in Section 75.70.10 of the State Administrative and Accounting Manual) with:
- a useful life of more than one year, and
- an individual unit value of $5,000 or more.
Agencies must seek pre-approval from OFM on orders of furniture, equipment, and software in excess of $5,000 that do not meet the automatic exemption criteria above.
Yes. The limit applies to the total cost of the purchase.
The $5,000 threshold for equipment purchases applies to a single item. However, OFM will be watching equipment expenditures. For example, if an agency director approves the individual purchases of 12 laptops that cost $1,000 each, then the agency may have to answer questions about whether it was an essential purchase.
The freeze covers both purchases and leases of equipment (Object EH).
Yes. There is no waiting period once you receive approval from OFM.
Equipment for a capital project provided in the enacted capital or transportation budget and funded by bond proceeds are exempt from the freeze. Agencies should document such purchases in their contract file with the information used to support the purchase without seeking an exemption. If an agency uses a fund source other than bond proceeds, it must submit an exemption request.
No. Agencies are required to request an exemption as outlined in the May 13, 2020 implementation memo prior to entering into any new obligations with a vendor on or after the effective date.
OFM will review exemption requests on a weekly basis. OFM strongly encourages agencies to submit thorough exemption requests to expedite the review and approval process.
Yes. Unless the purchase is automatically exempt, the agency must seek pre-approval from OFM.