TO: Department Directors and Autonomous Agency Heads
FROM: Governor Jennifer M. Granholm
DATE: March 29, 2007
SUBJECT: Restrictions on Purchase of Non-Essential Supplies, Materials, Equipment, Printing, or Other Products
As you are well aware, the economic conditions facing the citizens and government of this state have caused serious and immediate fiscal difficulties for our state budget. As a result of these economic conditions, the repeal of the Single Business Tax, and inaction by the Michigan Legislature, the State of Michigan continues to face a combined projected budget deficit of nearly $3 billion.
Given the severity of the budget deficit, state departments and agencies should continue aggressively identify and implement administrative efficiencies and economies to generate budgetary savings. Additional restrictions on purchasing also are needed. While I recognize that resources are scarce, and that greater efficiencies in the operation of state departments and agencies have been achieved, additional cost-containment measures must be implemented. Accordingly, I direct:
I. RESTRICTIONS ON PURCHASE OF NON-ESSENTIAL SUPPLIES, MATERIALS, EQUIPMENT, PRINTING, OR OTHER PRODUCTS
A. For the remainder of the fiscal year ending September 30, 2007, the purchase of, or contracting for, all supplies, materials, equipment, printing using outside vendors, or other products shall 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 and computer hardware or software. A purchase is for an essential requirement if one or more of the following apply:
1. A purchase or contract required by legal mandate, federal mandate, or court order.
2. A purchase or contract necessary to protect the health, safety, or welfare of Michigan citizens or visitors.
3. A purchase or contract necessary to produce budgetary savings or to protect existing state revenue or secure additional state revenue.
4. 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.
B. In complying with this Directive, department directors and heads of autonomous agencies should regularly review and implement measures to restrict the procurement of supplies, materials, equipment, printing using outside vendors, 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 restrictions established under this Directive apply both to new contracts and to the amendment, extension, renewal, or reauthorization of existing contracts.
D. This Directive applies to the purchase of non-essential supplies, materials, equipment, printing using outside vendors, or other products. Similar restrictions on contracts for services are imposed under Executive Directive 2007-18.
II. ENFORCEMENT
A. State department directors and autonomous agency heads are directed to closely and regularly monitor expenditures for the purchase of, or contracting for, all supplies, materials, equipment, printing using outside vendors, or other products financed with state funds to ensure compliance with the spirit of this Directive and the efficient expenditure of tax dollars.
B. The Department of Management and Budget ("DMB") and the State Budget Office shall review department and agency expenditures on a regular basis. The DMB shall make every effort, including, but not limited to, implementing limits on the use of statewide contracts, direct vouchers, procurement cards, and employee reimbursements, to further reduce total state contractual expenditures for supplies, materials, equipment, printing using outside vendors, or other products. 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 Directive, the DMB 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 DMB rescission of delegated purchasing authority under this paragraph. Enforcement functions under this Directive may be delegated by the State Budget Director to the Special Monitor for State Purchasing designated under Executive Directive 2007-10. Other departments and agencies shall cooperate fully with the DMB in this effort.
C. In exercising general supervisory control over the functions and activities of all administrative departments, boards, commissioners, and officers of the state, and of all state institutions, as required under Section 3 of 1921 PA 2, MCL 17.3, the State Administrative Board shall monitor compliance with the requirements of this Directive.
D. Violations of the requirements of this Directive shall be reported to the Director of the Department of Management and Budget, the Special Monitor for State Purchasing, and to the Chairperson of the State Administrative Board.
E. The State Administrative Board may take action to enforce the requirements of this Directive as authorized under 1921 PA 2, MCL 17.1 to 17.3.
III. MISCELLANEOUS
A. The restrictions established under this Directive apply regardless of the state fund source financing a purchase or a contract.
B. The restrictions established under this Directive apply both to new contracts and to the amendment, extension, renewal, or reauthorization of existing contracts.
C. Executive Directive 2007-1 is rescinded in its entirety.
D. This Directive is effective immediately and remains in effect through September 30, 2007.
I extend my sincere appreciation for your assistance and the continued hard work of state employees as we respond to the state's difficult fiscal condition.
______________________________
JENNIFER M. GRANHOLM
GOVERNOR
