OSD Procurement Regulations Related to Environmentally Preferable Products  

AAFCPAs would like to inform our health and human services clients that the Operational Services Division (OSD) of Massachusetts is planning to amend 808 CMR 1.00 to include provisions and requirements related to Environmentally Preferable Products (EPPs). While these amendments are currently in the early stages and OSD is soliciting feedback, their implementation appears imminent. 

Below is a summary of key considerations for when these amendments go into effect. We strongly encourage every provider to assess the potential impact on your organization and current procurement policies. Please contact us if you would like to discuss further. These amendments could significantly influence how providers approach purchasing and documentation. 

Key Points to Communicate: 

• Compliance: Contractors will need to prioritize EPPs in their purchasing decisions and maintain thorough documentation if opting for non-EPP items. Failure to comply could lead to funding or reimbursement issues. 
• Cost Feasibility: We will assist clients in evaluating whether purchasing EPPs is practical or if alternative options should be documented for cost reasons. 
• Audit and Reporting: Audits will likely focus on procurement documentation to ensure compliance with EPP guidelines, making it essential for contractors to be well-prepared. 
• Risk Management: Non-compliance with these changes could result in financial risks. We aim to help clients mitigate these risks by aligning their procurement practices early. 

Proactively addressing these regulations will help our clients stay compliant and avoid unexpected challenges in the future. 

Here is the snippet from section (8): 

Procurement of Contractor Furnishings, Equipment and Other Goods and Services. All procurements of furnishings, equipment and other goods and services by or on behalf of a Contractor shall be conducted in a manner to provide, to the maximum extent practical, open and free competition. Capital Items, as defined in 808 CMR 1.02, shall be acquired through solicitation of bids and proposals consistent with generally accepted accounting principles. When a contract includes funding for Capital Items, Departments shall require Contractors to include specifications for EPPs in their procurements, including, but not limited to, products and services that: contain recycled materials; conserve energy or water; minimize waste; are less toxic and hazardous; reduce the generation, release, or disposal of toxic substances; and/or otherwise lessen the impact of such products or services on public health and the environment. Departments reserve the right to review a Contractor’s procurement documentation, including, the inventory of Capital Items, for the inclusion of EPPs specifications, and in the event that Contractors do not procure EPPS, Contractors must, within a reasonable time after a Department’s request, provide to the requesting Department and Primary Purchasing Agency, if different, written documentation that the procurement of EPPs at the time was impractical or economically unfeasible. In the event any Capital Items listed in a Contractor’s inventory are not EPPs and such Capital Items are not accompanied by documentation justifying the choice to use the non-EPP Capital Items, Departments will not be obligated to fund, or reimburse the Contractors for the non-EPP Capital Items. 

How can we help? 

We can assist by helping clients comply with the new EPP requirements once they are finalized, ensuring proper documentation and evaluating cost feasibility. Additionally, we offer guidance on managing audit and reporting needs to mitigate financial and operational risks. 

If you have questions, please contact  Jeff Cicolini, CPA, CGMA, Partner and Leader of AAFCPAs’ Community Impact Human Services Practice at jcicolini@aafcpa.com or 774.512.4026—or your AAFCPAs Partner.