Can a Mississippi waste authority raise its contracted disposal rate above the original CPI cap without rebidding?
Plain-English summary
Three Rivers Solid Waste Management Authority entered a 2018 contract with Waste Connections for landfill operations and construction, after issuing an RFP that allowed annual CPI-based rate adjustments capped at 3%. Post-pandemic inflation pushed the actual CPI well above 3%. Waste Connections asked for an adjustment exceeding the cap. The Authority asked: can we approve without rebidding?
The AG: no.
Section 31-7-13(r) requires governing authorities and agencies to issue an RFP for solid waste collection/disposal services costing more than $75,000. The RFP must contain "terms and conditions relating to price, financial responsibility, technology, legal responsibilities and other relevant factors as are determined by the governing authority or agency to be appropriate for inclusion."
The 2007 Nowak opinion says CPI-based fuel-price adjustment clauses are allowable if contemplated and included in the RFP. So the original 3%-capped CPI clause was fine.
But the 2012 Cardin opinion (same requestor) holds that "in instances in which solid waste collection and disposal services were neither contemplated nor included in the present contract, such services are new or additional and must be advertised pursuant to Section 31-7-13(r)."
An adjustment exceeding the contracted cap is not "contemplated or included in the request for proposals or the contract." It's effectively new procurement. So Section 31-7-13(r) requires a new RFP.
Section 7-5-25 limits AG opinions to questions of state law; the AG won't interpret specific contract provisions, but the legal framework above applies.
What this means for you
For waste authority and county/municipal attorneys
When inflation or other factors push contracted prices above caps:
- The vendor cannot get above-cap relief through contract amendment
- New procurement is required under Section 31-7-13(r)
- The authority can issue a new RFP with revised terms (e.g., higher cap, alternative inflation index, different structure)
- Existing vendors can compete in the new RFP
- The original contract continues until the new procurement concludes
For RFP drafting going forward:
- Consider higher caps (5%, 7%) to absorb extreme inflation
- Consider different indices (PPI for waste services rather than general CPI)
- Consider termination-for-economic-hardship clauses
- Consider shorter contract terms with renegotiation points
For waste disposal contractors
If your contracted cap is below current cost increases, your options:
- Continue performing at the contracted price (with the cap applied)
- Request termination if contractually permitted
- Wait for new RFP cycle if the authority issues one
- Compete in the new RFP
Don't expect the authority to simply amend; the legal framework precludes it. Plan for the worst-case (continued performance at low margins until contract end or rebid).
For municipal purchasing officials generally
The Section 31-7-13(r) framework applies to solid waste contracts above $75,000. Other procurement statutes apply to other categories. Each has its own rules on amendments and modifications.
The general principle: if a proposed amendment goes beyond what the original RFP contemplated, new procurement is required.
For state auditor personnel reviewing waste contracts
When a county or authority amends a waste disposal contract for above-cap pricing:
- Confirm the amendment is within original RFP terms
- If outside original terms, flag the missing new RFP
- Document the audit finding for follow-up
For waste authorities considering contracts
Anticipate inflation. Build flexibility into the original RFP:
- Sliding caps tied to specific economic indicators
- Periodic renegotiation windows
- Cost-pass-through clauses with caps
- Volume-based pricing
- Term limits with rebid milestones
A poorly drafted original contract creates downstream problems.
Common questions
Q: What's the Mississippi Regional Solid Waste Management Authority Act?
A: Section 17-17-301 et seq. authorizes regional waste authorities (multi-county or multi-city). They have specific procurement and operational authority under the Act.
Q: What's Section 31-7-13(r)?
A: The Mississippi public-purchasing statute provision requiring RFP for solid waste collection/disposal services over $75,000. Sets out procurement procedures and what must be included in RFPs.
Q: Why can't the parties just agree to amend the contract?
A: Because public procurement requires open competition. An amendment that effectively gives one vendor a higher price than the RFP contemplated bypasses competition. Other vendors who could have offered better terms under the new rate are excluded.
Q: What about emergency clauses?
A: Section 31-7-13 has emergency exemptions, but inflation typically isn't classified as an emergency. Specific emergency situations (natural disaster affecting waste handling) might trigger emergency procurement procedures.
Q: What if the contract has a force majeure clause?
A: Force majeure typically excuses non-performance during an unforeseen event. It doesn't authorize price increases. The contractor's options under force majeure are typically performance suspension or termination, not amendment.
Q: Can the authority issue a new RFP and award to the same vendor?
A: Yes, if the existing vendor submits the best response. The new RFP must be open to all qualified bidders, and the award must be based on the criteria in the new RFP.
Q: What about contract extension under different terms?
A: An extension that materially changes terms (especially price) is effectively a new contract. Section 31-7-13(r) likely requires new procurement.
Q: Does this affect existing solid waste contracts statewide?
A: It affirms a structural rule. Many existing waste contracts may face similar pressure. Authorities and contractors should anticipate the framework when current contracts expire.
Q: How long does an RFP process typically take?
A: Several months from RFP issuance through proposal evaluation, negotiation, contract execution. Plan ahead.
Background and statutory framework
Mississippi's framework for solid waste authority procurement:
Authority structure:
- Mississippi Regional Solid Waste Management Authority Act (Section 17-17-301 et seq.)
- Regional waste authorities are political subdivisions
Procurement:
- Section 31-7-13(r): RFP required for solid waste collection/disposal services over $75,000
- RFP must contain price, financial responsibility, technology, legal responsibilities, other relevant factors
- Annual price adjustment clauses (CPI-based) allowable if included in original RFP
- Adjustments outside contemplated terms require new procurement
AG limits:
- Section 7-5-25: AG opinions are on state-law questions
- AG does not interpret specific contract provisions
Prior AG opinions:
- MS AG Op., Nowak (Jan. 19, 2007): CPI-based fuel adjustment clauses allowable if in RFP
- MS AG Op., Cardin (Mar. 30, 2012): services not contemplated in original contract require new advertisement under Section 31-7-13(r)
Citations and references
Statutes:
- Miss. Code Ann. § 7-5-25, AG opinion authority
- Miss. Code Ann. § 17-17-301 et seq., Mississippi Regional Solid Waste Management Authority Act
- Miss. Code Ann. § 31-7-13, public purchasing
- Miss. Code Ann. § 31-7-13(r), solid waste RFP requirement
Prior AG opinions cited:
- MS AG Op., Nowak (Jan. 19, 2007), CPI-based fuel adjustment clauses
- MS AG Op., Cardin (Mar. 30, 2012), services not contemplated require new RFP
Source
- Landing page: https://attorneygenerallynnfitch.com/divisions/opinions-and-policy/recent-opinions/
- Original PDF: https://attorneygenerallynnfitch.com/wp-content/uploads/2022/08/T.Cardin-August-11-2022-Amendment-of-Waste-Disposal-Contract.pdf
Original opinion text
August 11, 2022
Tommie S. Cardin, Esq.
Attorney, Three Rivers Solid Waste Management Authority
Post Office Box 6010
Ridgeland, Mississippi 39158-6010
Re: Amendment of Waste Disposal Contract
Dear Mr. Cardin:
The Office of the Attorney General has received your request for an official opinion.
Background
According to your request, you represent the Three Rivers Solid Waste Management Authority (the "Authority"), a political subdivision organized and existing under the Mississippi Regional Solid Waste Management Authority Act. Miss. Code Ann. § 17-17-301, et seq. On September 28, 2018, the Authority entered into an agreement with Waste Connections of Mississippi Disposal Services, LLC ("Waste Connections") to provide operations and construction services at the Three Rivers Regional Landfill. Prior to entering into the agreement, the Authority issued a request for proposals in accordance with Section 31-7-13(r). The specifications in the request for proposals for the requested landfill operations and construction services included a provision allowing the contractor to request an annual adjustment to the contracted waste disposal rate based on the Consumer Price Index for Urban Wage Earners (Southeastern), subject to a three percent cap.
Since entering into the agreement with Waste Connections, the Consumer Price Index has experienced significant and unprecedented increases not seen prior to September 28, 2018. As a result, Waste Connections has requested an annual adjustment to the contracted waste disposal rate in excess of the three percent cap contained in its agreement with the Authority.
Question Presented
May the Authority approve Waste Connections' request for an annual adjustment to the contracted waste disposal rate that exceeds the three percent cap in the agreement without advertising for a new request for proposals?
Brief Response
No. The proposed annual adjustment that exceeds the three percent cap was not contemplated by the parties when the original request for proposals was issued or when the parties agreed to the contract. Therefore, the Authority must enter into a new contract after going through the proper procurement procedure.
Applicable Law and Discussion
As an initial matter, pursuant to Section 7-5-25, the Office of the Attorney General is authorized to issue official opinions upon questions of state law only. Thus, we cannot by official opinion interpret the terms or provisions of an agreement or contract.
Section 31-7-13(r) requires the governing authority or agency to issue a public request for proposals for solid waste collection and disposal services that involve an expenditure of more than seventy-five thousand dollars ($75,000.00). Section 31-7-13(r) does not expressly provide for annual adjustment clauses, but it does state: "Any request for proposals when issued shall contain terms and conditions relating to price, financial responsibility, technology, legal responsibilities and other relevant factors as are determined by the governing authority or agency to be appropriate for inclusion; all factors determined relevant by the governing authority or agency or required by this paragraph (r) shall be duly included in the advertisement to elicit proposals." Based on this language in Section 31-7-13, this office opined that a fuel price adjustment clause based on established consumer price indexes is allowable if determined to be appropriate and in the county's best interest. MS AG Op., Nowak at *1 (Jan. 19, 2007). The price adjustment, like all other relevant factors, must be contemplated beforehand and included in the request for proposals. Miss. Code Ann. § 31-7-13(r).
The Nowak opinion, while acknowledging a statutory basis for the type of annual adjustment in the agreement between the Authority and Waste Connections, does not speak to renegotiation, amendment, or modification of an annual adjustment that exceeds the contracted-for cap on a waste disposal rate. Section 31-7-13(r), however, is clear that price and all other relevant factors "shall be duly included in the advertisement to elicit proposals." This office has previously opined that "in instances in which solid waste collection and disposal services were neither contemplated nor included in the present contract, such services are new or additional and must be advertised pursuant to Section 31-7-13(r)." MS AG Op., Cardin at *2 (Mar. 30, 2012). Likewise, the increase in the annual adjustment sought by Waste Connections exceeds the contracted-for cap on fuel adjustment, and thus was not contemplated or included in the request for proposals or the contract. For these reasons, the Authority must advertise for a new request for proposals.
If this office may be of any further assistance to you, please do not hesitate to contact us.
Sincerely,
LYNN FITCH, ATTORNEY GENERAL
By: /s/ Misty Monroe
Misty Monroe
Assistant Attorney General