New Guidance for Joint Purchasing Programs Under R.C. 9.48 Sets New Allowances

The Ohio Attorney General (OAG) released an opinion in March 2024, Opinion No. 2024-003, to clarify the kinds of services that may be procured under R.C. 9.48. The March 2024 opinion specifically references an OAG opinion released in August 2019, Opinion No. 2019-028, in which the OAG opined on the authority of a political subdivision to contract for construction services through joint purchasing programs under R.C. 9.48. With the August 2019 opinion, the OAG declared that a political subdivision cannot procure construction services pursuant to R.C. 9.48. Since its issuance, this opinion has had a significant limiting effect on joint purchasing programs that rely on procurements from out-of-state government entities, and it has had a corresponding limiting effect on political subdivisions within the state that have historically relied on those programs for procurement of construction services.  

In general, R.C. 9.48 allows political subdivisions to participate in (1) contracts entered into by another political subdivision, (2) joint purchasing programs, and (3) contract offerings from the federal government. Procurement pursuant to R.C. 9.48 is attractive to political subdivisions because such procurement is exempt “from any competitive selection requirements otherwise required by law if the contract in which it is participating was awarded pursuant to a publicly solicited request for a proposal or a competitive selection procedure of another political subdivision within this state or in another state.” Stated another way, a political subdivision can procure equipment, materials, supplies, or services pursuant to R.C. 9.48 without adhering to its own competitive procurement requirements, because another political subdivision has already done so.  

In the August 2019 opinion, however, the OAG determined that R.C. 9.48 could not be used to procure “construction services.” In making its determination, the OAG focused on 9.48(B)(1), which provides that a political subdivision may, for a fee, participate in a contract entered into by another political subdivision for “equipment, materials, supplies, or services.” The opinion notes that although the General Assembly had used the terms “construction” and “construction services” in other locations within the Revised Code, the General Assembly did not use those terms in the list of items that can be procured pursuant to R.C. 9.48. Due to this omission, the OAG determined that “construction services” cannot be procured under R.C. 9.48. The OAG opined that “[i]f the legislature intended to include ‘construction services’ in R.C. 9.48, it would have used the language to do so.” Id. at 4. Thus, according to the OAG, R.C. 9.48 does not provide an exception to the bidding statutes for construction services contracts.   

In the last five years following the August 2019 opinion, there has been little guidance as to what services are considered “construction services.” Based on the August 2019 opinion, a conservative interpretation of what would constitute “construction services” would include any typical construction-type improvements to facilities, such as roofs, flooring, HVAC, or lighting improvements. The March 2024 opinion clarifies that this is not always the case.    

Specifically, in the March 2024 opinion, the OAG considered what the General Assembly intended to be included under the term “services” contained within R.C. 9.48. The OAG concluded that “installation, maintenance, repairs and the like” are appropriately considered permissible “services” under R.C. 9.48, especially when they are procured with equipment, materials, and supplies under the program. By contrast, the OAG stated the word “construction” is commonly defined as “the process or art of constructing; act of building; erection; act of devising and forming; fabrication composition; also, a thing constructed; a structure.”   

Thus, the syllabus for the March 2024 opinion lands with a cautionary note, stating: “[w]hether any particular service acquired under R.C. 9.48, including any repair, maintenance, replacement, installation, or upgrade constitutes ‘construction’ or ‘construction services’ is a question of fact beyond the opinion-rendering function of the Attorney General.” Therefore, if you are a political subdivision in Ohio and plan to use a joint purchasing program to procure services for a building improvement project, you will want to work with legal counsel to determine whether the services sought are construction services and therefore prohibited from being obtained through a joint purchasing program, or rather, services limited to the “installation, maintenance, repair, and the like,” and ultimately permissible through a joint purchasing program.