Ms. Carole Parks, Consultant
San Diego County Office of Education
6401 Linda Vista Road
San Diego, California 92111-7399

Re: Purchasing from California Multiple Award Schedules

Dear Ms. Parks:
You have asked whether a school or community college district may purchase from the California Multiple Award Schedules (hereafter CMAS). We conclude that a school or community college district may request the Department of General Services to make purchases or leases of electronic data processing and telecommunications goods and services on their behalf from CMAS schedules pursuant to the provisions of Public Contract Code section 12110, but may not directly purchase from CMAS vendors on their own, without competitive bidding.

DISCUSSION

Effective January 1, 1994, Chapter 1106 of the Statutes of 1993 became effective, permitting state agencies to utilize multiple awards in contracts relating go commodities and electronic data processing and telecommunications goods and services. Section 10290.1 was added to the Public Contract Code as follows:

"Notwithstanding any other provision of law, in exercising their delegation of procurement authority from the Department of General Services, state agencies may place purchase orders, in an amount not to exceed twenty thousand dollars ($20,000) per transaction, with vendors who have multiple award schedules with the General Services Administration of the United States if the vendor is willing to extend those terms, conditions, and prices. The department may also develop multiple award agreements for use by state agencies in the same manner."

Additionally, section 12101.5 was added to the chapter of the State Contract Act which authorizes special acquisition procedures for the acquisition of electronic data-processing and telecommunication goods and services stating in part as follows:

"(b) The state may utilize multiple awards including federal General Service Administration Multiple Awards Schedules in procurements for commodities and electronic data processing and telecommunications goods; master services agreements for electronic data processing personal services; master agreements for equipment; and master equipment services agreements. For purposes of this subdivision, a multiple award is an award of an indefinite quantity contract for one or more similar goods to more than one vendor. . . .

"Notwithstanding any other provision of law, state agencies, in exercising their delegation of procurement authority from the Department of General Services, may make awards to vendors, in an amount not to exceed two hundred fifty thousand dollars ($250,000) per transaction, who have multiple award schedules with the General Services Administration of the United States on the same terms, conditions, and prices if the vendor is willing to do so. The department may also develop multiple award agreements for use by state agencies in the same manner."

Subsequently, the Technology Acquisitions Section of the Department of General Services Procurement Division published the following statement under the title "Use of California Multiple Award Schedules by Local Governments:"

"Effective October 12, 1994, the State of California approves the use of California Multiple Award Schedules (CMAS) by local governments (i.e. city, county, city and county, district, or other local governmental body or corporation empowered to expend public funds) for information Technology products and services only (commodities are not available per California Public Contract Code paragraph (sic) 10324."

The notice from the Procurement Division of the Department of General Services indicated that (1) local agency purchase orders are to be issued directly to the CMAS contractor, (2) local agencies must use their own purchase order document, not the State's form of purchase order, (3) no purchase may be for less than $500 or more than $250,000 (4) it is the option of each CMAS contractor whether or not to extend CMAS to local governments, (5) local agencies accept sole responsibility for payment to the contractor, (6) CMAS contractors must report all activity by local governments to the State, (7) each local agency must forward a copy of the purchase order to the Procurement Division of the Department of General Services, and (8) the Procurement Division of the Department of General Services will bill each local agency one and one-half percent of the value of each order for the use of CMAS contracts.

Effective March 10, 1995, the Procurement Division of the Department of General Services stated that the use of CMAS by local governments for commodity (non-information technology) purchases, in addition to information technology products and services was now approved. The notice from the Procurement Division of the Department of General Services contained the same information as noted above, except that it stated that (1) no purchase could be for less than $500 or more than $20,000 for commodities, and (2) the Procurement Division will bill each local agency one percent of the value of each order for the use of CMAS contracts.

We have recently been informed that notices from the Department of General Services now include a statement that each local governmental agency must determine for itself whether it has authority to purchase from the CMAS schedules.

We also note that on December 21, 1995, the Vice Chancellor and General Counsel of the California Community Colleges sent an informational memorandum to chancellors, presidents and chief business officials of community college districts informing them that community college districts may, in their discretion, make use of CMAS for commodity purchases. The memorandum did not contain a legal analysis indicating the basis for the advisory.

Awhile ago, our office began looking into the issue of school districts and community college districts purchasing through CMAS. Based upon the information then available and our research performed up to May 19, 1996, we advised that Public Contract Code section 12109 (discussed below) could be used as authority for school districts and community college districts to use the CMAS process for purchasing electronic data processing and telecommunication goods and services. We noted that an attorney in the General Services Office whom we consulted stated that she provided the CMAS office the legal opinion that the State CMAS office could legally offer local government agencies the opportunity to purchase through the CMAS process, but was careful to state that her opinion was not for the purpose of determining whether any particular local agency had the authority to use the CMAS process.

We now have the occasion to revisit this issue based upon additional information and research. We begin by noting the well established proposition that school and community college districts must competitively bid the purchase of equipment, materials, supplies and services exceeding a statutorily established amount, unless some other statute or legal authority exempts the districts from competitive bidding. (Pub. Contract Code, §§ 20111/20651). In this vein, Education Code section 39643 (see also Public Contract Code section 20653 for community college districts) states as follows:

"Nothing in this code shall preclude the governing board of any school district from purchasing materials, equipment or supplies through the Department of General Services pursuant to Government Code section 14614."

Government Code section 14814 was repealed in 1983 and was replaced by Public Contract Code section 10324, which contains almost identical language, and states in part as follows:

"The department is authorized to make purchases of materials, equipment, or supplies . . . on behalf of any . . . local Governmental body or corporation empowered to expend public funds for the acquisition of property, upon written request of such local agency; provided that the purchases can be made by the department upon the same terms, conditions and specifications at a price lower than the local agency can obtain through its normal purchasing procedures. . . . No purchase shall be for less than five hundred dollars ($500) and the local agency shall accept sole responsibility for payment to the vendor. . . .

"A charge shall be made to each local agency availing itself of this service, the charge to be not less than the estimated cost to the department of rendering the service, including costs incurred by tne department in preparation for a purchase requested by a local agency in instances where such request is canceled or withdrawn by the local agency prior to award of the contract or purchase order by the department. . . ." (Emphasis added).

It is clear, therefore, based upon Education Code section 39643/Public Contract Code section 20653 that the Legislature intended the procedure contained in Public Contract Code section 10324~~ whereby the State Department of General Services purchases materials equipment, or supplies on behalf of a district to be an exception to the statutory competitive bidding requirement otherwise imposed on school and community college districts.

In the chapter of the Public Contract Code which authorizes the State Department of General Services to use special acquisition procedures for the acquisition of electronic data processing and telecommunication goods and services for the state, Section 12110 of the Public Contract Code contains almost identical language to Public Contract Code section 10324, except that it is limited to the purchase or lease of electronic data-processing or telecommunications goods and services. Public Contract Code section 12110 states in part as follows:

"(a) The Department of General Services is authorized to make purchases or leases of electronic data-processing or telecommunications goods and services . . . on behalf of any . . . local Governmental body or corporation empowered to expend public funds for the acquisition of goods or services, upon written request of such local agency; provided that such purchase or lease can be made by the Department of General Services upon the same terms, conditions and specifications at a price lower than the local agency can obtain through iFs normal acquisition procedures. . . . No purchase or lease shall be for less than five hundred dollars ($500) and the local agency shall accept sole responsibility for payment to the vendor. . . .

"(c) A charge shall be made to each local agency availing itself of this service, the charge to be not less than the estimated cost to the department of rendering the service, including costs incurred by the department in preparation for a purchase or lease requested by a local agency in instances where the request is canceled or withdrawn by the local agency prior to award of the contract or purchase order by the department.' (Emphasis added).

Because Public Contract Code section 10324 is an exception to the statutory competitive bidding requirement for schools and community college districts, and because Public Contract Code section 12110 contains nearly identical language, we conclude that Public Contract Code section 12110 is also an exception to the statutory competitive bidding requirement. Its purpose was evidently to authorize the Department of General Services to purchase or lease data-processing or telecommunications goods and services on behalf of a local public agency in the manner in which the Department of General Services could purchase or lease such goods and services.

We note that even prior to the legislation authorizing CMAS, the Department of General Services had authority to use special acquisition procedures for the acquisition of electronic dataprocessing and telecommunication goods and services by awarding contracts based on the most cost-effective solution to the state's requirements, as determined by the evaluation criteria contained in the solicitation document, which could provide for selection of a vendor on an objective basis other than cost alone. (Pub. Contract Code, § 12102). Thus, even prior to the CMAS legislation, a local public agency was authorized, pursuant

to Public Contract Code section 12110, to have the Department of General Services purchase electronic data-processing or telecommunications goods and services on its behalf under a type of competitive request for proposals, rather than a straight competitive bid situation.

With the legislative changes to the State Contract Act authorizing the use of multiple awards in contracts relating to commodities and electronic data-processing and telecommunications goods and services, we conclude that local public agencies may request the Department of General Services to make purchases or leases of electronic data-processing and telecommunications goods and services on their behalf from CMAS schedules pursuant to the provisions of Public Contract Code section 12110.

However, we understand that the longstanding practice of the Department of General Services is not to make purchases on behalf of local public agencies under either Dublic Contract Code sections 10324 or 12110. With respect to master agreements which have been competitively bid, the Department of General Services has allowed local public agencies to purchase from such agreements directly from the vendor.2 With respect to sole source agreements, the Department of General Services has not, prior to the CMAS schedules, allowed local public agencies to purchase from such agreements.

We do not dispute the authority ^f the Department of General Services to offer local public agencies the opportunity to purchase on their own from the State's CMAS schedules. In this regard, Public Contract Code section 12109 states as follows:

'the Director of General Services may make the services of the department under this chapter available, upon such terms and conditions as may be deemed satisfactory, to any tax-supported public agency in the state, including a school district, for assisting the agency in the purchase or lease of electronic data-processing or telecommunications goods or services."

While this section undoubtedly confers authority upon the Department of General Services to make its services available to local public agencies to assist them in their purchases or leases, it is not clear whether it may also be construed as providing local public agencies authority to purchase on their own from the State's CMAS schedules, without going through competitive bidding. Whether or not it may be so construed is a question of statutory interpretation.

In the interpretation of a statute the courts follow certain general rules of statutory construction, which have been stated as follows:

"We begin with the fundamental rule that a court 'should ascertain the intent of the Legislature so as to effectuate the purpose of the law.' (citation omitted). In determining such intent '[the] court turns first to the words themselves for the answer.' (citation omitted). We are required to give effect to statutes 'according to the usual, ordinary import of the language employed in framing them.' (citations omitted). 'If Dossible. significance should be riven to every word. phrase. sentence and Part of an act in Dursuance of the legislative purpose.' (citation omitted); 'a construction making some words surPlusaae is to be avoided.' (citation omitted). 'When used in a statute [words] must be construed in context, keeping in mind the nature and obvious purpose of the statute where they appear.' (citations omitted). Moreover. the various parts of a statutory enactment must be harmonized bv considering the particular clause or section in the context of the statutory framework as a whole. (citations omitted). (Moyer v. Workmen's Compensation Appeals Board (1973) 10 Cal.3d 222, 230). (Emphasis added). s

Construing Public Contract Code section 12109 in light of the statutory framework as a whole requires that it be considered in light of Public Contract Code section 12110. If Public Contract Code section 12110 is indeed an exception to the statutory competitive bidding requirement for local public agencies for the purpose of authorizing the Department of General Services to purchase or lease data-processing or telecommunications goods and services on their behalf, then Public Contract Code section 12109 should not also be construed as an exemption from competitive bidding for local public agencies. To construe Public Contract Code section 12109 as providing local public agencies an exemption from competitive bidding in any instances where the State may not have to competitively bid and makes their procedure available would, in effect, make Public Contract Code section 12110 surplusage, in contravention of the principles of statutory construction.

Moreover, in giving significance to every word, phrase, and sentence of Public Contract Code section 12109, we see that the Department of General Services is authorized to make its services available "for assisting' the local public agency in its purchase or lease. This implies that the local public agency is actually making the purchase or lease itself, and is merely seeking to obtain assistance from the Depa