Minnesota
Key Agency(ies): The Office of State Procurement (OSP) within Minnesota’s Department of Administration is the central authority for Executive branch procurement activities. OSP develops standard procurement procedures and issues guidance through the Minnesota Procurement Manual.
Key Statute: Minnesota’s state procurement is governed primarily by Minnesota Statutes (Minn. Stat.) Chapter 16C.
Key Regulations: Minnesota’s procurement regulations are codified in the Minnesota Rules (Minn. R.) Chapter 1230, which implements the statutory framework established in Minn. Stat. ch. 16C.
Procurement Types/Highlights: The most common methods of procurement in Minnesota are:
Formal Sealed Bidding: Minnesota Statutes require that procurements valued at $50,000 or more must be conducted using formal solicitation methods. Formal sealed bidding is used when OSP or a contracting agency intends to award the contract solely based on price. This method requires a publicly advertised invitation for bids. Bids are opened publicly and the contract is awarded to the lowest-priced responsive and responsible bidder.
Request for Proposals: RFPs are used when price is not the sole determining factor and the state must evaluate qualitative criteria such as technical approach. The RFP must outline evaluation criteria and proposals are scored by a review team based on both technical and cost factors. The contract will be awarded to the proposal offering the best value to the state.
Small Procurements: Minnesota defines small procurements as contracts valued under $50,000. Small procurements may be conducted using informal methods of competition or through direct purchases. Agencies with delegated purchasing authority may also make small procurements directly. For procurements valued between $10,000 and $50,000, agencies are expected to obtain at least three or more written quotes from vendors.
Bid Protests: Minnesota’s Commissioner of Administration is vested with authority over solicitation awards and protests. Agencies are required to report vendor protests to OSP and follow OSP guidance. If a protest appears potentially valid, the agency’s staff must consult the OSP Acquisitions Manager for guidance before taking action. The Commissioner makes all final decisions on bid protests for state agency procurements.
Although Minnesota does not provide for an independent administrative hearing for bid protests, vendors may seek judicial relief after an adverse decision from the Commissioner. State law grants Minnesota district courts original jurisdiction for procurement challenges.
Claims: Minnesota law waives sovereign immunity for disputes arising from contracts to which the state is a party. Claims are not handled in Minnesota by any special claims commission, claims are handled as an ordinary civil lawsuit in state court.
Contractors must file their claims within 90 days after the contractor receives a final payment estimate under the contract or within six months after the completion of contract performance. The venue for the lawsuit can be in the county where the claim arose or in Ramsay County, where the Minnesota capital is located.
To initiate a suit, a contractor must file their complaint in court and serve the Attorney General of Minnesota with the suit. The state has 40 days to answer.
Suspension & Debarment: Vendors may be debarred for committing fraud or criminal offenses in connection with performance of a government contract, engaging in collusion or price-fixing, violating ethical standards, or after a determination of non-responsibility.
By rule, the Department of Administration may suspend a vendor from state contracting for up to six months if there is probable cause of serious misconduct that warrants state investigation. Vendors found to have engaged in misconduct may be debarred for a period of one to three years.
Both suspension and debarment actions require written notice to the vendor stating the reasons and the length of the exclusion, and informing the vendor of its rights to review or appeal. A vendor has 30 days from receipt of a suspension or debarment decision to appeal to the Department of Administration commissioner. The commissioner must review the case and issue a written decision within 45 days. The commissioner’s decision is the final administrative decision, and if the vendor remains aggrieved they may seek judicial review in state court.
Interesting/Distinctions: Minnesota has robust socio-economic procurement preferences to promote small businesses. State law requires that a percentage of state purchasing be set aside for small businesses owned by certain groups, including women, minorities, and individuals with disabilities. The state may apply up to a 12% bid preference in evaluations for certain small business groups, and for veteran-owned small businesses.
*Not admitted to the District of Columbia Bar. Supervised by principals of the firm who are members of the District of Columbia Bar.
