Montana Administrative Register Notice 2-5-628 No. 15   08/05/2022    
Prev Next


                                       OF THE STATE OF MONTANA 


 In the matter of the amendment of ARM

 2.5.202, 2.5.301, 2.5.603 through

 2.5.605 pertaining to department

 responsibilities, delegation of purchasing

 authority, small purchases or limited

 solicitations of supplies and services,

 sole source procurement, and exigency

 procurements and the repeal of ARM

 2.4.201 and 2.4.202 pertaining to

 minimum refund and exceptions to

 minimum refund rule
















TO: All Concerned Persons


1. On September 24, 2022, the Department of Administration proposes to amend and repeal the above-stated rules.


2. The Department of Administration will make reasonable accommodations for persons with disabilities who wish to participate in this rulemaking process or need an alternative accessible format of this notice. If you require an accommodation, contact the Department of Administration no later than 5:00 p.m. on August 17, 2022, to advise us of the nature of the accommodation that you need. Please contact Julie James, Department of Administration, P.O. Box 200101, Helena, Montana 59620-0101; telephone (406) 444-2460; Montana Relay Service 711; facsimile (406) 444-6194; or e-mail to Julie.James2@mt.gov.


3. The rules proposed to be amended provide as follows, new matter underlined, deleted matter interlined:



(1) through (5) remain the same.

(6) The division delegates its procurement authority as follows:

(a) except for controlled items, or as specified in (5), authority is delegated to all agencies for the procurement of supplies and services of $5,000 or with a total value of less than $10,000;

(b) authority to purchase supplies and services when the total contract value is expected to be greater than $5,000 $10,000 or more may be granted or revoked after consideration of the following factors:

(i) through (iv) remain the same.

(c) delegation greater than $5,000 of $10,000 or more will be given through a written delegation agreement with the State Procurement Bureau. The written delegation shall specify:

(i) through (9) remain the same.


AUTH: 18-4-221, MCA

IMP: 2-17-301, 2-17-512, 18-4-221, 18-4-222, MCA


GENERAL STATEMENT OF REASONABLE NECESSITY:  The proposed rule amendments are part of the department's procurement reform project. The department recently contracted with a third-party consultant and met with internal and external stakeholders to assess state procurement practices. The consultant compared the department's procurement practices to states identified as direct peers and recommended changes to procurement thresholds to align with peer states and industry best practices. The proposed amendments will:

  • raise the small purchase procurement threshold for supplies and services from $5,000 or less to less than $10,000. The $5,000 small purchase threshold has been in place since 1994. $5,000 in today's dollar, with an average inflation rate of 2.21% between 1994 and 2022, would be $9,010.

  • raise the procurement thresholds for supplies and services for formal solicitations from $25,000 for services and $50,000 for supplies to $100,000. This will provide one consistent threshold. Purchases greater than or equal to $10,000 and less than $100,000 will still require an informal limited solicitation process.

  • better align our thresholds with peers and be more in line with other current statutory thresholds. In comparison, the current formal solicitation threshold for Montana counties is $80,000. The current state threshold for formal bidding for building construction projects is $150,000.

  • provide operational efficiencies and reduce red tape for low-dollar purchases.


2.5.301 DELEGATION OF PURCHASING AUTHORITY (1) Agencies may exercise authority to purchase noncontrolled items with a total contract value of $5,000 or less than $10,000. Agencies may exercise delegated purchasing authority greater than $5,000 of $10,000 or more and for exigency purchases in accordance with written delegation agreements described in ARM 2.5.202, with the Montana Procurement Act, and with these rules.

(2) remains the same.


AUTH: 18-4-221, MCA

IMP:  18-4-132, 18-4-221, 18-4-222, 18-4-302, MCA


2.5.603 SMALL PURCHASES OR LIMITED SOLICITATIONS OF SUPPLIES AND SERVICES (1) The division or state agency may procure supplies or services when the total contract value will be $5,000 or less than $10,000 using a purchase technique that best meets the agency's needs, including the use of electronic online auctions.

(2) remains the same.

(3) The division or state agency, if authorized in a written delegation agreement, may procure supplies or services with a total contract value between $5,001 and $25,000, or supplies with a total contract value between $5,001 and $50,000 of $10,000 or more and less than $100,000, using a limited solicitation procedure.  This procedure requires a minimum of three viable written or oral quotations, if available. The limited solicitation procedure must be documented and, wherever practical, use the department's vendor list.

(4) through (6) remain the same.


AUTH: 18-4-221, MCA

IMP:  18-4-305, MCA


2.5.604 SOLE SOURCE PROCUREMENT (1) This rule applies to all sole source procurements of $5,000 $10,000 or greater more unless exigency procurements described in ARM 2.5.605 are necessary.

(2) remains the same.

(3) For purchases with a total contract value greater than $5,000 of $10,000 or more, the determination as to whether a procurement shall be made as a sole source shall be made by the division, unless specifically authorized in a written agency delegation agreement. In cases of reasonable doubt, competition should be solicited. A request by a state agency to the division that a procurement be restricted to one vendor must be accompanied by a written justification using the "Sole Source Procurement Justification" form referenced in (5).

(4) remains the same.

(5) For the purpose of complying with 18-4-306, MCA, a record of sole source procurements greater than $5,000 of $10,000 or more shall be maintained by the procuring agency using the "Sole Source Procurement Justification" form provided by the division.

(6) and (7) remain the same.


AUTH:  18-4-221, MCA

IMP:  18-4-306, MCA


2.5.605 EXIGENCY PROCUREMENTS (1) An exigency procurement of $5,000 $10,000 or greater more shall be limited to those supplies or services necessary to meet the exigency, as defined in ARM 2.5.201.

(2) through (4) remain the same.


AUTH: 18-4-221, MCA

IMP: 18-4-133, MCA;


4. The department proposes to repeal the following rules:




AUTH: 17-8-201, 17-8-203, MCA

IMP: 17-8-203, MCA


GENERAL STATEMENT OF REASONABLE NECESSITY: The department proposes to repeal ARM 2.4.201 and 2.4.202 in an effort to streamline regulation and cut red tape as part of Governor Gianforte's Red Tape Relief Initiative. The substance of the rules will be incorporated in MOM Policy 330 – Payments, Suppliers, and Related IRS Reporting. By moving the language from rule to policy, it will allow for a more regular structured review and facilitate input from agencies which are directly affected by refund policies.




AUTH: 17-8-201, 17-8-203, MCA

IMP: 17-8-203, MCA


5. Concerned persons may present their data, views, or arguments concerning the proposed action to the person listed in paragraph 2 above. Comments must be received no later than 5:00 p.m., September 2, 2022.


6. If persons who are directly affected by the proposed actions wish to express their data, views, or arguments orally or in writing at a public hearing, they must make written request for a hearing and submit this request along with any written comments to the person listed in paragraph 2 above no later than 5:00 p.m., August 17, 2022.


7. If the department receives requests for a public hearing on the proposed action from either 10 percent or 25, whichever is less, of the persons directly affected by the proposed action; from the appropriate administrative rule review committee of the Legislature; from a governmental subdivision or agency; or from an association having not less than 25 members who will be directly affected, a hearing will be held at a later date. Notice of the hearing will be published in the Montana Administrative Register. Because the proposed amendments and repeal affect only government agencies and do not directly affect the public, the department did not calculate the number of persons necessary to require a hearing.  A hearing will be held if requested by the appropriate administrative rule review committee of the Legislature, one governmental subdivision or agency, or an association having not less than 25 members who will be directly affected these rules


8. An electronic copy of this proposal notice is available through the department's website at doa.mt.gov/administrative rules. The department strives to make its online version of the notice conform to the official published version but advises all concerned persons that if a discrepancy exists between the official version and the department's online version, only the official text will be considered. In addition, although the department works to keep its website accessible at all times, concerned persons should be aware that the website may be unavailable during some periods, due to system maintenance or technical problems.


9. The department maintains a list of interested persons who wish to receive notices of rulemaking actions proposed by this division. Persons who wish to have their name added to the mailing list shall make a written request that includes the name, mailing address, and e-mail address of the person to receive notices and specifies that the person wishes to receive notices regarding division rulemaking actions. Notices will be sent by e-mail unless a mailing preference is noted in the request. Such written requests may be mailed or delivered to the person listed in paragraph 2 above or may be made by completing a request form at any rules hearing held by the department.


10. The bill sponsor contact requirements of 2-4-302, MCA, do not apply.


11. The department has determined that under 2-4-111, MCA, the proposed amendment and repeal of the above-stated rules will not significantly and directly impact small businesses.



By:   /s/ Misty Ann Giles                                    By:   /s/ Don Harris                             

Misty Ann Giles, Director                                  Don Harris, Rule Reviewer

Department of Administration                           Department of Administration


Certified to the Secretary of State July 26, 2022.


Home  |   Search  |   About Us  |   Contact Us  |   Help  |   Disclaimer  |   Privacy & Security