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TO:  Department Directors and Autonomous Agency Heads
FROM:  Governor Jennifer M. Granholm
DATE:  October 28, 2003
SUBJECT: Restrictions on Purchase of Non-essential Supplies, Materials, Equipment, Printing, or Other Products

Based upon a close review of recent economic and state fiscal indicators, it is clear that prompt steps must be taken to further reduce the rate of state government expenditures.  I will soon be invoking constitutional and statutory provisions to reduce state expenditures, but decisions on where to curtail spending will not be easy because state government already has many service needs that are unmet or less than fully met.  If approved by the Legislature, additional major program expenditure reductions will be ordered.

In addition, I am issuing this Executive Directive, which has as its objective across-the-board expenditure reductions by agencies within the Executive Branch of state government.  While recognizing that resources are already scarce, and that greater efficiencies in the administrative operations of state departments and agencies have already been achieved, further cost avoidance and curtailment of spending are essential.  Accordingly, I direct:

A. For the remainder of the fiscal year ending September 30, 2004, the purchase of, or contracting for, all supplies, materials, equipment, printing, or other products financed with state funds should be deferred and limited to only the most essential requirements.  Products subject to these restrictions include but are not limited to office furniture and equipment, new or used; and computer hardware or software.  Examples of essential requirements include any of the following:

1. A purchase or contract required by legal mandate or court order.

2. A purchase or contract necessary to protect the health or safety of Michigan citizens or visitors.

3. A purchase or contract necessary to provide for the basic requirements of residents of state institutions or facilities, including but not limited to food, clothing, and prescription drugs.

4. A purchase or contract essential to the continued functioning of a legally-mandated program or activity of state government.

5. A purchase or contract producing budgetary savings, increasing state revenues, preventing the loss of federal funds, or securing additional federal funds.

B. In complying with this Directive, department directors and heads of autonomous agencies should regularly review and implement measures to restrict whenever feasible the procurement of supplies, materials, equipment, printing, or other products using a procurement card issued pursuant to procedures established under Section 0510.03 of the Administrative Guide to State Government.

C. The Department of Management and Budget (“DMB”) and the State Budget Office shall regularly review department and agency expenditures.  If the Director of the DMB determines that a department or agency has failed to demonstrate significant and continuing progress in meeting the objectives of this Executive Directive, the Department of Management and Budget shall rescind procurement authority delegated to the department or agency, including but not limited to delegation authorized under Section 261 of the Management and Budget Act, 1984 PA 431, MCL 18.1261, or under Sections 0510.01 or 0510.12 of the Administrative Guide to State Government.  The State Budget Director may recommend to the Director of the Department of Management and Budget rescission of delegated purchasing authority under this paragraph.

D. While this Directive applies to the purchase of non-essential supplies, materials, equipment, printing, or other products, restrictions on contracts for services imposed under Executive Directives 2003-5 and 2003-8 remain in effect.

E. This Directive is effective immediately and remains in effect through September 30, 2004.
Your assistance and fiscally responsible action, and the continued hard work of state employees in these difficult times are greatly appreciated.

Jennifer M. Granholm