“Standardized” Purchases – Legal Requirements and Avoiding Pitfalls

One procurement tool available to schools and BOCES is “standardized” purchasing. Vendors often encourage schools to “standardize” on particular products for various reasons. While standardization may be the right tool in certain situations, its use is limited to narrowly tailored situations. In most situations standardized purchasing does not allow schools to avoid competitive bidding requirements.

What is “Standardization” in Purchasing?

General Municipal Law § 103(5) allows boards to approve “standardization” on contracts for a particular type of equipment, material, supplies, or services that exceed competitive bidding thresholds.

To do so, boards must adopt a resolution, supported by at least 3/5 of its members, indicating that for reasons of “efficiency or economy,” there is a need for standardization. Door locks are a common example where standardization may appropriately be used to facilitate “efficiency and economy.” It would be uneconomical and burdensome to use a variety of lock brands throughout a school building. In most circumstances, schools are justified in standardizing on the lock brand already in use.

Importantly, approval of standardization by a board does not eliminate the need for formal advertising. Instead, it merely eliminates the need for the words “or equal” in the bid specifications. A school’s standardization determination avoids the need for competitive bidding in one circumstance. That is, where the standardized item can only be purchased from one source and no competition is possible.

Supporting “Standardization” Determination

The NYS Comptroller's Office has issued opinions setting parameters for standardization. The opinions point out potential reasons for standardization, which include:

1. The school district already has a substantial amount of equipment of the same make and uniformity is essential to economy or efficiency;

2. The district's facilities are particularly adapted to handling a particular make of equipment and cannot be converted economically;

3. The school district has a substantial supply of spare parts for a particular make of equipment which cannot be disposed of except at a substantial loss;

4. The design or the plan or method of construction of a building or other installation is peculiarly suited to a particular make of equipment and cannot be economically altered;

5. Local geographic or atmospheric conditions require the use of a particular make of equipment to the exclusion of others;

6. Employees have been trained to operate one particular make of equipment and cannot be trained economically to operate other makes.

When evaluating standardization, schools should document objective cost savings that would result from the decision. The board resolution approving the standardization should declare why, as a matter of fact and not mere opinion, efficiency or economy will be served.

If you would like assistance in evaluating “standardization” options or assisting with the legal steps for a “standardization” determination, feel free to contact Jeff Lewis at jmlewis@ferrarafirm or at one of the telephone numbers listed below.