September 24, 2024

Important Changes and Guidance on G.L. c. 149 Construction Thresholds

On September 6, 2024, the Attorney General’s Fair Labor Division (AGO) issued a bid protest decision related to public construction contracts, determining that awarding authorities have an obligation to consider all costs, including labor and materials, when estimating the cost of a construction contract for the purposes of soliciting quotes under a Statewide Contract (SWC) managed by the Operational Services Division (OSD). This decision applies to construction projects between $10,000 and $50,000, effective September 6, 2024.

The recent AGO decision is a reversal of its guidance issued in 2016, which stated that only construction labor costs counted toward the $50,000 threshold when determining whether a SWC could be used to solicit quotes, pursuant to G.L. c. 149, § 44A(2)(B).

A September 9, 2024, notice from the AGO noted that when estimating the cost of a construction contract for a project utilizing an OSD Statewide Contract, awarding authorities must consider all costs when estimating the total value of the contract including, but not limited to, labor and materials.

Changes to OSD Statewide Contract User Guides

As a result of this decision, the Contract User Guides for several OSD Statewide Contracts will be updated to reflect the AGO guidance related to labor and materials.

Any installation that meets the statutory definition of “construction” is subject to the new rules; however, OSD does not provide legal counsel on whether a project is or is not a construction project. Further, entities should consult their own legal counsel whenever purchasing installation services, or any services that may be considered construction under G.L. c. 149.

Questions

Refer to the Buyer FAQs document. Send construction-related questions to the AGO. For municipal procurement questions, contact the Office of the Inspector General at 617-722-8838 or 30BHotline@mass.gov. Contact the OSD Help Desk at 888-MA-State (627-8283) with questions about Statewide Contracts.