When a state agency in Oklahoma claims that a purchase is exempt from the Central Purchasing Act, does OMES have to verify the claim?

Plain-English summary

Representative Martinez asked whether OMES has to verify an agency's claim that a purchase is exempt from the Central Purchasing Act. The Attorney General said yes.

The Central Purchasing Act gives the State Purchasing Director "sole and exclusive authority and responsibility for all acquisitions by state agencies." Layered on top of that authority are dozens of statutory exemptions, both inside the Act (more than 40 agency- and acquisition-type carve-outs in § 85.12) and outside it (more than 30 separate exemption statutes scattered through Titles 2, 17, 34, 47, 53, 56, 57, 60, 62, 63, 64, 68, 70, and 74).

When an agency claims one of those exemptions, OMES cannot just take the agency's word for it. The AG concludes that OMES has a routine, ongoing duty to verify each exemption claim. Three reasons:

1. Special-circumstance exemptions within the Act (sole-source, time-sensitive, mandatory statewide contract) are made "by the Purchasing Director," meaning OMES must affirmatively determine the exemption applies.
2. Section 85.12 exemptions require the exempt agency to submit internal purchasing procedures for OMES approval and to keep acquisition files OMES can audit. The Act expressly gives OMES audit authority and a duty to ensure the agency follows its own approved procedures.
3. Exemptions outside the Act are ambiguous, but reading the Act's overall scheme, the AG concludes that OMES still has oversight. A blanket exemption with no oversight would give "sweeping and carte blanche authority" to agencies, and would defeat the Act's anti-fraud purpose recognized in Indiana Nat'l Bank v. State (1993).

The AG also recommends that the Legislature clean up the patchwork of exemption statutes. The current sprawl is unclear about which exemptions extend to which parts of the Act, and clarification would help avoid future disputes.

What this means for you

If you are an Oklahoma state agency procurement officer

Plan on OMES verification, not deference. When you cite an exemption, expect that:

• OMES may ask you to document the basis (which statute, which factual circumstances, why this purchase fits).
• OMES may audit the file under § 85.39(C). Keep the justification, supporting documentation, and any other records OMES has required to be kept.
• If your agency has Act-internal exemptions under § 85.12, your internal purchasing procedures must be on file with the Purchasing Director and reviewed annually. If they are not approved, the Act says you cannot legally make acquisitions exceeding threshold limits.
• Sole-source acquisitions show up in monthly reports OMES sends to legislative leadership. Treat sole-source claims as high-scrutiny.

If you are an OMES staffer or the Purchasing Director

The opinion crystallizes that exemption review is part of the job, not an exception to it. You can:

• Request additional information needed to review proposed acquisitions (§ 85.7(A)(2)).
• Audit exempt agencies' compliance with their internal procedures (§ 85.12(D), § 85.39).
• Reduce an agency's acquisition threshold for noncompliance (§ 85.5(F)).
• Submit findings to the State Auditor and Inspector or, for suspected criminal violations like bid-splitting, to the Attorney General.

If you have been treating exemption claims as final, the opinion is a directive to build out a verification workflow.

If you are a vendor to the state

Sole-source claims and exemption claims are reviewable. If you believe an agency is improperly using an exemption to avoid competition, you have two channels:

• File a complaint with OMES, which has audit authority over exempt agencies.
• Make a public records request for the agency's certification and assurance under § 85.7(A)(7) (sole source) or its acquisition file under § 85.39(C).

The monthly sole-source reports to the Speaker and President Pro Tempore are required to disclose date of approval/disapproval and reason for disapproval.

If you are the State Auditor and Inspector

The Act's enforcement architecture routes findings of noncompliance to your office under § 85.5(F). The opinion confirms OMES has audit authority over exempt agencies and exempt acquisitions, so your office will likely receive referrals. Coordinate with OMES on agency procedures filed under § 85.39 to align audit approaches.

If you are an Oklahoma legislator

The opinion explicitly recommends a legislative cleanup. The current sprawl includes more than 30 separate exemption statutes outside the Act, with no consistent template for which Act sections still apply. The AG suggests:

• Resolving whether outside-the-Act exemptions are blanket or only carve out specific Act provisions.
• Making OMES's oversight role explicit in each exemption statute.
• Reviewing whether some legacy exemptions are still justified.

If you are a journalist or watchdog organization

Acquisitions and the related exemption claims are public records under the Open Records Act. Sole-source approvals are reportable monthly to legislative leadership. The opinion frames the exemption layer as a major fraud-risk surface that requires ongoing verification.

Common questions

Q: What is the Central Purchasing Act?
A: 74 O.S. §§ 85.1–85.44E. It centralizes state agency procurement under the State Purchasing Director, requires competitive bidding, sets standardized procedures, and creates penalties for violations like bid-splitting.

Q: What exemptions exist within the Act?
A: Two layers. First, special-circumstance exemptions: time-sensitive/best-interest determinations under § 85.7(A)(7), mandatory statewide contracts under § 85.5(G)(5), and sole-source under § 85.7(A)(7). Second, blanket exemptions in § 85.12 for more than 40 agencies and acquisition types.

Q: What exemptions exist outside the Act?
A: More than 30, scattered across many titles. Examples include the Tourism Department (74 O.S. §§ 2221, 2232, 2239), military department contracts (44 O.S.), veterans (57 O.S. § 537), corrections (57 O.S. § 537), and many others.

Q: Does an exempt agency get to ignore the Act entirely?
A: No. Section 85.12 expressly requires exempt agencies to submit internal purchasing procedures for OMES approval and to maintain acquisition files OMES can audit. Outside-the-Act exemptions are ambiguous on this, but the AG reads them to retain OMES oversight.

Q: What does "verify" mean? Audit every transaction?
A: The opinion does not require transaction-by-transaction approval. It requires "routine" verification, which the Act implements through file maintenance (§ 85.39(C)), annual review of internal procedures, and audits (Okla. Admin. Code § 260:115-5-19). The verification can be sample-based as long as it is genuine and not a rubber stamp.

Q: What happens if OMES finds noncompliance?
A: The Purchasing Director may reduce the agency's acquisition authority, report the agency to the OMES Director, refer the matter to the State Auditor and Inspector, or refer suspected criminal violations to the Attorney General (§ 85.5(E), (F)).

Q: Is bid-splitting still criminal?
A: As of 2020, the felony classification for split purchasing was removed. The opinion notes "no reports of potential criminal activity have been transmitted to the Attorney General in at least the last five years."

Q: How does this affect higher education?
A: The Oklahoma State Regents for Higher Education is the only executive branch agency exempted under § 85.3A. The opinion preserves the carve-out structure but reads OMES oversight to extend across all exemptions in the Act.

Background and statutory framework

The Central Purchasing Act was enacted to address concerns about subjective awarding of state contracts and to centralize purchasing under a single Purchasing Director. Indiana Nat'l Bank v. State (1993) summarizes the Act's purpose: "promoting economy in government and reducing the likelihood of fraud," and "ensuring that government officials are accountable to the public and are discharging their duties competently and responsibly."

OMES (the Office of Management and Enterprise Services) was formed in 2012 by consolidating the Department of Central Services into the Office of State Finance. OMES's Director is appointed by the Governor with Senate consent. The Director hires the State Purchasing Director, who under § 85.5(A) has sole and exclusive authority for all state agency acquisitions.

The exemption architecture grew over decades. Some exemptions reflect specialized agency needs (Tourism, Military, Lottery), while others reflect legislative preferences for particular acquisition types. The result is a patchwork that the AG describes as creating "ambiguities as to the scope of OMES's duties."

The opinion threads two principles:

1. Statutory construction: When a statute is ambiguous, courts look to the legislative scheme and avoid absurdities (Wilhoit v. State, 2009 OK 83). A blanket exemption that strips OMES of oversight would be absurd given the Act's anti-fraud purpose.
2. Negative implication: When the Legislature does not list an agency among the exemptions, that agency stays subject to the Act (Cunningham Lindsey Claims Mgmt., 2002). The AG flips this principle to read residual oversight into outside-the-Act exemptions: even where the Legislature carves out specific procurement requirements, the carve-out does not eliminate OMES's general oversight role.

OMES's existing administrative rules (260:115-1-1(C), 260:115-5-3(b)) already authorize the Director to issue procurement directives and to revoke Certified Procurement Officer credentials for noncompliance. The opinion treats this as evidence that OMES already interprets the Act to authorize broad oversight even of exempt acquisitions.

Citations and references

Statutes:
- 74 O.S. §§ 85.1 et seq. (Central Purchasing Act)
- 74 O.S. § 85.5 (Purchasing Director authority and enforcement)
- 74 O.S. § 85.7 (Acquisition review and special-circumstance exemptions)
- 74 O.S. § 85.12 (Exempt agencies and acquisitions)
- 74 O.S. § 85.39 (Internal purchasing procedures)

Cases:
- Indiana Nat'l Bank v. State, 1993 OK 101, 857 P.2d 53 (Act's purpose: economy and anti-fraud accountability)
- Cunningham Lindsey Claims Mgmt., Inc. v. Oklahoma State Ins. Fund, 2002 OK CIV APP 7, 38 P.3d 248 (negative implication of exemption listings)
- Wilhoit v. State, 2009 OK 83, 226 P.3d 682 (ambiguity resolved by legislative scheme)
- World Publ'g Co. v. White, 2001 OK 48, 32 P.3d 835 (avoid absurdities in construction)

Source

• Landing page: https://oklahoma.gov/oag/opinions/ag-opinions/2023/ag-opinion-2023-4.html
• Original PDF: https://oklahoma.gov/content/dam/ok/en/oag/opinions/ag-opinions/2023/ag_opinion_2023-4.pdf

Original opinion text

OFFICE OF THE ATTORNEY GENERAL
ATTORNEY GENERAL OPINION
2023-4

The Honorable Ryan Martinez
Oklahoma House of Representatives, District 39
2300 N. Lincoln Boulevard, Room 246
Oklahoma City, OK 73105

April 13, 2023

Dear Representative Martinez:

This office has received your request for an official Attorney General Opinion in which you ask, in effect, the following question:

Does the Central Purchasing Act ("Act") require the Office of Management and Enterprise Services ("OMES"), through the State Purchasing Director, to verify that an exempt purchase fits within the scope of an exemption claimed?

I. SUMMARY

Yes, as a part of its oversight duties, OMES is required to routinely verify an agency's claim that an acquisition is statutorily exempt from the requirements of the Act. The plain text and legislative history of the Act charges OMES, through the State Purchasing Director ("Purchasing Director"), with the sole and exclusive authority for all state agency acquisitions. For purposes of ensuring agencies are accountable for their acquisitions, the Act provides OMES with authority to conduct agency audits and to submit findings to the State Auditor and Inspector or the Attorney General. Despite the seemingly sweeping coverage of the Act, there are a number of exemptions within the Act and in other titles of Oklahoma law. The Legislature should review the Act and all statutes affording exemptions to agencies and/or acquisitions to resolve existing ambiguities. Notwithstanding these ambiguities, given the entirety of the legislative scheme, the Act requires OMES to routinely verify an agency's claim that an acquisition is statutorily exempt from the requirements of the Act.

II. BACKGROUND

The Oklahoma Legislature adopted the Act, 74 O.S.2021, §§ 85.1–85.44E, in response to calls for government reforms about the subjective awarding of contracts and purchases that were diffused between state agency officials. The Act created the position of the Purchasing Director, standardized procedures to govern governmental agencies' acquisitions and set penalties for violations of the Act. It is intended to protect Oklahoma citizens by promoting economy in government and reducing the likelihood of fraud. Indiana Nat'l Bank v. State, 1993 OK 101, ¶ 12, 857 P.2d 53, 60. The Act also "insures [sic] that government officials are accountable to the public and are discharging their duties competently and responsibly."

In 2011, the Department of Central Services was consolidated into the Office of State Finance, which became OMES one year later. Despite the consolidation and name changes, the core of the Act has consistently required that "all activities of any state agency . . . relating to purchasing shall be under the direction of the Purchasing Division unless otherwise provided by the Act." 74 O.S.2021, § 85.3(A, D).

Administrative control of OMES is under a Director who is appointed by the Governor, by and with the consent of the Senate. The OMES Director is charged in statute with hiring the Purchasing Director. That Purchasing Director, in turn, has "sole and exclusive authority and responsibility for all acquisitions by state agencies." 74 O.S.2021, § 85.5(A). The Purchasing Director's authority includes requesting additional information deemed necessary to review a proposed agency acquisition. If the Purchasing Director determines that the acquisition is unnecessary, excessive or unjustified, the Purchasing Director must deny the requisition.

Broadly, the Purchasing Director has a duty to "review state agency acquisitions for the purposes of verifying compliance with the provisions of the Act and rules promulgated by OMES." If the Purchasing Director determines that an agency is not in compliance with the Act or associated rules, at a minimum, the following options exist:

1. reduce a state agency's acquisition authority;
2. report any agency noncompliance to the OMES Director;
3. submit these findings to the State Auditor and Inspector for further investigation; or
4. transmit the information to the Attorney General for further investigation upon reasonable belief that an agency acquisition constitutes a criminal violation.

III. DISCUSSION

A. OMES is required to maintain oversight and responsibility for all agency acquisitions, and this includes routinely verifying an agency's claim that an acquisition is statutorily exempt.

1. Within the Act, OMES officials are authorized to grant limited and special circumstance exemptions from the Act's requirements.

Within the Act, certain OMES officials have specific statutory authority to exempt an agency acquisition from the Act's general requirements. Generally, these exemptions can be categorized as limited and based on special circumstances, and include the following:

1. an exemption is in the best and immediate interest of the state due to unusual, time-sensitive, or unique circumstances, as determined by the Purchasing Director.
2. certain state agencies' contracts are mandatory statewide contracts, as designated by the Purchasing Director; and
3. a determination that the proposed supplier of the goods and services is the only qualified vendor.

In the first two special circumstances, OMES has complete discretion to grant the exemption. As such, OMES has a clear duty to ensure that the claimed exemption is lawful and properly within the category of the exemption being claimed. In the third special circumstance, the Act prohibits the Purchasing Division from "approving" the acquisition until the agency submits a signed certification and assurance that the acquisition meets the requirements of the Act.

Therefore, OMES also has a responsibility to verify the sole-source exemption is being lawfully utilized. OMES's approval requirement means that OMES officials should be regularly attempting to verify that the exemptions cited and certified are legitimate, both when the exemption is granted and when the State is billed for the allegedly exempt acquisition. Otherwise, OMES's "approval" is a mere rubber-stamp, rather than the diligent oversight the Legislature envisioned.

2. Under the Act, at 74 O.S.2021, §§ 85.12 and 85.39, the Purchasing Director is solely responsible for reviewing and approving exempted agency purchasing procedures and conducting audits.

In addition to the limited and special circumstance exemptions described above, within the Act the Legislature has specifically excluded more than forty agencies and types of acquisitions; most of the exclusions are set forth in section 85.12. Here, the Act is clear in providing that the exempted agency or acquisition is not entirely exempt from the Act or OMES oversight. Rather, section 85.12 mandates that the agency or acquisition adhere to an agency's internal purchasing procedures, which must have been reviewed and approved by the Purchasing Director.

Additionally, the Act requires the exempted agency to maintain a file for each acquisition, which must contain a justification for the acquisition, supporting documentation "and any other information the State Purchasing Director requires to be kept." 74 O.S.2021, § 85.39(C). This is significant because it furthers the requirement of the Purchasing Director to ensure agencies comply with the Act. Necessarily, this includes routinely auditing the exempted agencies' acquisitions to ensure the agency procedures are followed.

3. The Purchasing Director is responsible for routinely verifying that an exemption claimed outside of the Act is lawful.

For an agency or acquisition not among those identified in the Act's exemptions, it has been generally stated that this demonstrates the Legislature's intent for the agency to remain subject to the Act. Outside of the Act, however, the Legislature has provided for more than thirty other limited exemptions to various agencies and their acquisitions.

Authorizing these exemptions, or removing them, is categorically within the Legislature's sole and exclusive fiscal policymaking powers. However, in authorizing these exemptions, the Legislature has arguably created ambiguities as to the scope of OMES's duties. That is, a question exists as to whether exemptions afforded outside of the Act are blanket exemptions to any and all parts of the Act—meaning that OMES is without any responsibility for them—or whether these acquisitions are to be conducted like the section 85.12 exemptions within the Act.

For clarity, the Legislature should review the Act and all statutes affording exemptions to agencies and/or acquisitions and resolve existing ambiguities, including to make explicit any oversight role that should be performed by OMES or another entity. Notwithstanding these ambiguities, given the entirety of the legislative scheme, this office concludes that OMES is required to maintain oversight and responsibility for all agency acquisitions. This necessarily includes routinely verifying an agency's claim that an acquisition is statutorily exempt.

To permit blanket exemptions without requiring oversight by OMES would provide sweeping and carte blanche authority to administrative agencies, risking that they might irresponsibly discharge their trusted duties to care for taxpayer funds. This was certainly not the intent of the Legislature.

It is, therefore, the official Opinion of the Attorney General that:

OMES, through the Purchasing Director, is required to maintain oversight and responsibility for all agency acquisitions, and this includes routinely verifying an agency's claim that an acquisition is statutorily exempt.

GENTNER DRUMMOND
ATTORNEY GENERAL OF OKLAHOMA

BRAD CLARK
DEPUTY ATTORNEY GENERAL