FAQ
Contract Administrative Fee Assessment Effective January 1, 2026
In 2025, the Rhode Island General Assembly amended the “State Purchases Act” via R.I. Gen. Laws § 37-2-12(b) to authorize the Chief Purchasing Officer to establish, charge and collect from State contractors a contract administrative fee not to exceed one-third of one percent (0.33%) of the total value of the annual spend against a contract awarded to a State contractor, effective January 1, 2026. All contract administrative fees collected pursuant to this subsection shall be deposited into a restricted receipt account which shall be used for the purposes of implementing, maintaining, or operating technology for the submission and processing of bids, online vendor registration, bid notification, and other costs related to State procurement, including staffing.
In accordance with this legislation, the 0.33% contract administrative fee is applicable to all Contracts/Purchase Orders issued by the State of Rhode Island except for those services whose fees are otherwise set in statute or exempt from competitive procurement pursuant to applicable provisions of 220-RICR-30-00-9 and/or 220-RICR-30-00-10. Therefore, effective January 1, 2026, all eligible contracts shall be assessed the 0.33% contract administrative fee.
Your organization is a registered vendor in our Ocean State ProcuresTM (OSP) System. You are identified as an organization point of contact in that registration. Our distribution list included all registered vendor points of contact. You may or may not have an active contract with the state. Our recent email communication effort was to bring awareness of the new fee to all vendors registered in OSP.
There is an exception that is limited to those services whose fees are otherwise set in statute or exempt from competitive procurement pursuant to applicable provisions of 220-RICR-30-00-9 and/or 220-RICR-30-00-10.
If the MPA is one that is in a service that is excluded from the fee assessment pursuant to applicable provisions of 220-RICR-30-00-9 and/or 220-RICR-30-00-10as of 12/31/25, the service will be excluded from the new fee.
Collaborate with the organization’s accounting team to advise of the State’s 0.33% contract administrative fee structure as follows:
- Vendors shall invoice the State at time of services rendered and/or goods delivered.
- Upon approval by the agency contract manager, the State will pay the invoice within the stated payment terms, less the 0.33% administrative fee amount.
Share this FAQ page with the accounting team.
The state system will pay invoicing within the stated payment terms, less the 0.33% administrative fee amount. The state system is also programmed to transfer the $0.33% administrative fee directly to the restricted receipt account. Please collaborate with your organization’s accounting team to advise them accordingly and share this FAQ page with them.
It does not affect the state's invoicing process itself. The invoice submission, payment process, and net payment terms remain unchanged. The only exception is the $0.33% withholding from invoicing payments at the time of payment (the state system is also programmed to transfer the restricted receipt account automatically). Suppliers should not experience invoice processing delays as a result of this process. If you have any issues with invoicing, inquiries remain as has been standard practice by supplier initiating contact with the agency, or with the Division of Accounts & Control.
Yes. Those MPA contracts that are currently assessed the MPA 1% Fee will transition to the 0.33% Contract Administrative Fee Assessment Effective January 1, 2026.
- POs/Contracts for which invoicing is paid by state prior to January 1, 2026 should be assessed the 1% MPA Fee against invoicing.
- POs/Contracts for which invoicing is paid after January 1, 2026 and thereafter will be assessed the 0.33% Fee against invoicing.
Please collaborate with your organization’s accounting team to advise them accordingly and share this FAQ page with them.
No. The legislative mandate requires the collected funds to be deposited into a restricted receipt account and the state will comply with this by way of the State’s financial system withholding and transfer of those funds to the appropriate account at time of invoice payment. Any exceptions to this payment structure previously in place and/or which allowed remittance of a paper check payment will no longer be applicable as of January 1, 2026.
The last payment by way of paper check is for the quarter ended December 31, 2025.
No. The State will comply with this legislative amendment by way of the State’s financial system withholding and transfer of those funds to the appropriate account at time of invoice payment. Any exceptions to this payment structure previously in place and/or which allowed remittance of a paper check payment will no longer be applicable as of January 1, 2026.
A contract that is not an MPA is one that is procured by the Division of Purchases on behalf of a specific Agency to meet that agency’s needs. It is a contract that is restricted to use by one agency.
A contract that is an MPA is solicited by the Division of Purchases at is discretion to meet needs across all state agencies. It is intended for use by multiple state agencies.
FAQs specific to MPAs are available HERE