Services contracts freeze FAQ

Agencies under the governor’s direction are the executive cabinet and small agency cabinet.

No. Only contracts that are fully funded by private or federal funding sources are exempt from the freeze.

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. In addition, these are generally public works contracts, not services contracts as contemplated by the freeze.

No. However, if an agency determines that a contract 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 Washington Technology Solutions (WA Tech) 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. However, agencies do not need to include zero-cost amendments and administrative amendments (for example, changing the contract manager) in their report to OFM.

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. Agencies may not enter into interagency or intergovernmental agreements to circumvent the freeze requirements.

It depends. If your Direct Buy contract is less than $10,000 then it is exempt from the freeze. But if your Direct Buy contract is $10,000 or more, it is not exempt from the freeze.

Yes, as long as the contract meets the definition in RCW 39.26.130 for the protection of life or public safety, or meets the requirements of any other agency-related statute that pertains to emergencies. 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.

No.

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 is subject to the freeze.

For any questions regarding software, please email ofm.accounting@ofm.wa.gov

Directive 24-19 says that “…services contracts…that are necessary to continue critical services or agency operations are exempt from the freeze.” An agency needs to determine whether the services are subject to the freeze, given the provided criteria. If they are, the agency needs to follow its internal process for an exception approval. If an exception is approved, the agency must include it on its report to OFM.

No.

For the purposes of the contract freeze under the governor’s directive, services contracts are agreements with contractors for labor, work, analysis, or similar activities provided by a contractor to accomplish a specific scope of work.

There may be environment-related contracts that fit within that definition. For example, contracts necessary for hazardous materials response and emergency cleanup are exempt because they support the protection of life and public safety. Agencies must report non-emergency environmental and cleanup contracts.

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.

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.

No, there is no category that exempts these contracts from the freeze. However, depending on the circumstances, the agency may grant its own exemption for a personnel investigation contract.

It depends. It is the subject matter of the contract that determines whether it is subject to the freeze, not the method of procurement.

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; and
• Approved information technology projects.

No. Contracts that are already executed are not subject to the freeze. However, if an amendment to an executed contract is required, you must apply criteria in the Directive to the amendment to determine if it is subject to the freeze. If you determine the amendment is subject of the freeze, you must seek exemption approval within your organization before executing the amendment, and the amendment must be on your report.

Yes.

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.

If no material commitment has been made, the agency should determine whether continuing the procurement is warranted.

If no material commitment has been made, the agency should determine whether announcing the apparently successful bidder is warranted.

The agency should determine whether executing the contract is warranted.

Please send your report to ExemptionRequest@ofm.wa.gov.

Every two weeks, OFM will be reviewing all Contracts reported in the Freeze Exemption Report submitted by state agencies to determine whether exemptions to the freeze are necessary to provide critical services related to their operations. During its review, OFM will consider the following:

• Are the services being contracted critically necessary?
• What would the consequences have been had an exemption not been granted.

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.

If an agency did not grant any exceptions in any of the four categories – Hiring, Contracts, Good & Equipment, Travel – then no report is necessary. If, however, an agency did grant an exception in one or more of the categories, a Freeze Exception Report must be submitted.

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.

Yes.

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.

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. This exemption applies to all installed base situations, regardless of delivery method (on premise or “as a service”). “Installed base” refers to already purchased equipment or currently licensed (subscribed to) software that is critically necessary to support agency business.

Yes.

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.

No. No exemption request is required to provide staff with commonly used desktop equipment/software such as Microsoft Office Suite, Adobe, etc. Note: This exemption cannot be used to upgrade or replace equipment/software across a work unit, division, or agency.