If your company is doing business with the state of Michigan, or would like to, the rules are changing, especially regarding the financial threshold under scrutiny.
The State Administrative Board today voted to approve Governor Gretchen Whitmer’s proposal to increase transparency and oversight within the state procurement process by changing the threshold at which state departments would need additional approval for state contracts from $500,000 to $250,000.
“We need to restore trust in our state government, and that starts with making it more transparent and accountable,” Whitmer said. “Under my leadership, Michiganders will be able to trust that every decision will protect them, their families, and their pocketbooks. Today’s vote is an important step to hold our state to a higher standard and earn back the public’s trust.”
In 2018, the Snyder Administration loosened the threshold from $250,000 to $500,000, which offered greater leeway for departments to unilaterally approve large state contracts without any oversight from the State Administrative Board. Under the more lenient guidelines, departments could approve contracts for deals under $500,000 without additional oversight, but needed the State Administrative Board’s approval for anything at $500,000 or greater.
Under Governor Whitmer’s proposal, the State Administrative Board would be required to review all state spending for most contracts valued at $250,000 or greater. State Departments would still have the flexibility to approve smaller contracts, but the threshold would be lowered to increase transparency and accountability with taxpayer dollars.
The State Administrative Board oversees all administrative activities of state departments and agencies, including the approval of contracts and leases. The board’s membership is comprised of the governor, lieutenant governor, secretary of state, attorney general, state treasurer, superintendent of public instruction, and the director of the department of transportation.
The new guidelines approved by the State Administrative Board will take immediate effect.