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Contractor's procurement request raises tax and procurement questions in 'connected community' change order
Summary
A contractor on the 'connected community' project asked the county to buy HVAC and electrical items to avoid sales tax, saving about $18,000; staff reported state guidance that the county should not buy items that a contractor will install, and contractor will provide paperwork for the change order.
County staff described a change order request on the 'connected community' facility project in which a contractor asked the county to purchase certain air-conditioning and electrical items to reduce the project's cost (and sales tax exposure), yielding an estimated $18,000 in savings. The contractor reportedly asked whether the county would buy the equipment so the contractor could avoid paying sales tax on those items.
Staff said the state guidance is that the county can purchase equipment only if county maintenance staff install it; if a contractor will perform installation, buying the equipment on the county's behalf is impermissible and defeats the tax rationale. "If you're gonna do it and let a contract do it, that's that's a no no," the chair said in the discussion. The contractor agreed to provide paperwork and tests that document costs and responsibilities.
The commission discussed risk allocation and the practical benefit of letting the contractor remain responsible for procurement to avoid later disputes over installation and warranties. Staff said they would receive the contractor's documentation and bring the change order paperwork forward; no vote on the change order is recorded in the transcript.
