The legislature has enacted laws that state agencies must follow when
purchasing goods and services.
The Department of Administration has overall responsibility for state
procurement contracts.
In some cases, the department purchases goods and services and sells them to
other state agencies. For some goods and services, the department enters into a master (or "enterprise")
contract with a vendor and allows agencies to buy the goods and services under
this master contract. In other cases, the department delegates the contracting
authority to individual agencies. The Department of Administration's authority
generally does not apply to purchases by the Minnesota State Colleges and Universities
system. Minn. Stat., sec. 16C.02, subd. 2.
Most agency purchases are based on "best value."
The determination of "best value" includes price, but may also include other
considerations, such as quality and vendor performance. If criteria other than
price are used, the contracting agency must state the relative importance of
price and other factors in the solicitation.
Minn. Stat., secs. 16C.02, subd. 4, and 16C.06, subd. 6.
The state uses a formal sealed bid process to acquire most goods and services with an estimated
value of more than $50,000 ($100,000 for the Department of Transportation). Purchases
of less than these amounts may be made without receiving sealed bids.
Minn. Stat., sec. 16C.06.
There are separate laws governing state building and construction contracts.
These contracts may be awarded to the lowest responsible bidder or the vendor or contractor offering the best value.
Minn. Stat., sec. 16C.28.
State law provides certain bid preferences that can modify the determination
of who is the lowest bidder on a contract.
The Department of Administration may award up to a 12 percent preference in
the amount bid for specified goods or services by small targeted group
businesses, small businesses owned by veterans, or small businesses located in economically disadvantaged areas. More detailed
information about this program, including which businesses are eligible for the preference, can be found through the Office of State Procurement of the Department of Administration.
Different laws apply to state agency contracts for professional or consultant services.
When contracting for professional or technical services (i.e., services that are technical in nature and result in the production of a report or the completion of a task) the law generally requires agencies to use a competitive proposal process that considers price and other factors such as vendor qualifications.
There are other requirements that apply to most professional/technical
service contracts. For example, the agency must determine that no current state
employee is able and available to perform the service, and must assign specific personnel to manage each contract.
Minn. Stat., sec. 16C.08.
December 2024