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NJPA Enabling Legislation

Letter Re: MN Contract Law
Letter Re: Cooperative Purchasing
Legal Opinion
Your State’s Purchasing Statute

State Joint Powers Statutes generally allow for one government agency to purchase from contracts competitively solicited by another government agency. This, of course, would require the consent of all parties, including the supplier. NJPA contracts are established to meet both the competitive solicitation and consent requirements. This allows our members to increase efficiency, reduce administrative expenses as well as purchase of supplies, materials, equipment or services without duplicating the competitive bidding requirements necessary for a governmental agency purchasing.. The term “Governmental Unit” as used here usually includes every city, county, town, school district, or other political subdivision of this or another state, the state university, any agency of the state or of the United States, and any instrumentality of a governmental unit. In some states, this power is not passed on to specific municipal agencies. Joint Powers Agreements are also known as Membership Agreements, Participation Agreements and sometimes Intergovernmental or Interlocal Agreements.

All NJPA bid contracts have been competitively solicited, reviewed and awarded by the NJPA Board of Directors in accordance with Minnesota public purchasing rules and regulations under the Municipal Contracting Laws M.S. 471.345.  Each solicitation and Invitation for Bid (IFB) contains language which includes all qualified customers in all 50 states. The IFB advises all IFB responders that the response must apply to all qualified customers in all 50 states and in some cases the provinces and territories of Canada. All IFB respondents understand that these contracts shall be used by member governmental, educational and non-profit agencies throughout the United States. This consideration is based on the Minnesota "Joint Exercise of Powers Authority" M.S. 471.59 which is similar to Joint Powers Statutes in most states. This Joint Powers Authority allows for participation under NJPA’s qualifying criteria and guidelines. Although each governmental agency may have different policies and purchasing procedures to follow, applying our competitive solicitation meets the requirements of most states.

Minnesota Statute 471.345: Municipal Contracting Law
Make special note of Subd. 1 which defines “Municipality” to include school districts and all governmental agencies.

• M.S. 471.345 Subd. 1: Municipality Defined
For purposes of this section, “municipality” means a county, town, city, school district or other municipal corporation or political subdivision of the state authorized by law to enter into contracts.

• M.S. 471.345 Subd. 15: Cooperative Purchasing.
Our national association, the “National Joint Powers Alliance®” (NJPA), takes its name from this statute. A municipality may contract for the purchase of supplies, materials, or equipment without regard to the competitive bidding requirements of this section if the purchase is through a national municipal association’s purchasing alliance or cooperative created by a joint powers agreement that purchases items from more than one source on the basis of competitive bids or competitive quotations.

Minnesota Statute 471.59: Joint Exercise of Powers
Make note of Subd. 1 which defines the ability of two governmental agencies to enter into an agreement to contract in common through the action of each of the governing bodies. Subd. 10 expands on the ability to enter into cooperative agreements.

• M.S. 471.59 Subd. 1: Agreement
Two or more governmental units, by agreement entered into through action of their governing bodies, may jointly or cooperatively exercise any power common to the contracting parties or any similar powers, including those which are the same except for the territorial limits within which they may be exercised. The agreement may provide for the exercise of such powers by one or more of the participating governmental units on behalf of the other participating units. The term “governmental unit” as used in this section includes every city, county, town, school district, other political subdivision of this or another state, another state, the University of Minnesota, and any agency of the state of Minnesota or the United States, and includes any instrumentality of a governmental unit. For the purpose of this section, an instrumentality of a governmental unit means an instrumentality having independent policy making and appropriating authority.

• M.S. 471.59 Subd. 10: Services Performed by Governmental Units; Commonality of Powers.
Notwithstanding the provisions of Subd. 1 requiring commonality of powers between parties to any agreement, the governing body of any governmental unit as defined in Subdivision 1may enter into agreements with any other governmental unit to perform on behalf of that unit any service or function which the governmental unit providing the service or function is authorized to provide for itself.

The “Joint Exercise of Powers” Agreement.
This is the agreement that NJPA offers other cooperating agencies to enter into. The Joint Exercise of Powers Agreement with NJPA provides access to NJPA and its contracts. This allows NJPA to access the member participating agencies’ contracts as well. The Joint Powers Agreement may not be necessary if the participating agencies’ state law allows for state to state “Piggy Backing” on legal state contracts. All NJPA contracts are legal state contracts as NJPA operates under Minnesota legislative authority to provide cooperative purchasing services to participating members. The Joint Exercise of Powers offers a legal link between NJPA and its member agencies as contracts are accessed. NJPA bids and awards contracts in full compliance with Minnesota Municipal Contracting Law, M.S. 471.345.

Minnesota Statute 123A.21: Service Cooperatives
This is the statute under which our cooperative was created. Our previous name was the North Central Service Cooperative (NCSC) and we are now doing business as the National Joint Powers Alliance® (NJPA).

• M.S. 123A.21 Subd. 2: Purpose
According to this statute, the purpose of a service cooperative is to “assist in meeting specific needs of clients.” The powers of the board of directors of a service cooperative are written very broadly to grant extensive authority.

• M.S.123A.21 Subd. 5: Authority
This statute states “The board of directors shall have authority to maintain and operate a service cooperative.”

M.S. 123A.21 Subd. 5(g) states “The service cooperative board of directors may enter into contracts with other public and private agencies and institutions to provide administrative staff and other personnel as necessary to furnish and support the agreed upon programs and services.”

M.S.123A.21 Subd. 7 (23), specifically calls for the board to support programs and services that support cooperative purchasing.

M.S. 123A.21 Subd. 3: Membership and Participation 
Full membership in a SC shall be limited to public school districts, cities, counties, and other governmental units as defined in section 471.59 and NJPA’s Bylaws and Policies.

Participating Membership Agreement 
Governmental units need not join NJPA as Full Members, but they must sign on as NJPA Participating Members to access our contracts and to validate their purchases. Many local policies require membership to legally access contracts held by other agencies. NJPA provides a Participating Membership and Joint Powers Agreement at no cost. When a board signs a Joint Powers Agreement that qualifies that board to serve on the NJPA Joint Powers Advisory Board. The Participating Membership and Joint Powers Agreements both establish a legal paper trail between NJPA and the member as contracts are accessed.

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