COMMITTEE SUBSTITUTE
FOR
H. B. 4664
(By Delegates White, Kominar, Boggs and Iaquinta)
[Originating in theCommittee on Government Organization.]
(February 24, 2008)
A BILL to repeal §5A-3-27 and §5A-3-37 of the Code of West
Virginia, 1931, as amended; and to amend and reenact §5A-3-1,
§5A-3-11, §5A-3-11a, §5A-3-12, §5A-3-37a and §5A-3-45 of said
Code; all relating to the Purchasing Division of the
Department of Administration; omitting antiquated language;
revising specifications on which bids shall be based; removing
requirement that all bids exceed available funds before
Director may negotiate; requiring city and state of residence
and business addresses for vendors; adding preferences for
veterans, small businesses, minority owned businesses and
vendors who use parts or commodities manufactured in West
Virginia; allowing political subdivisions of the state to
extend preferences; requiring Secretary of Revenue to
promulgate rules; and allowing the state agency for surplus
property to sell commodities to the public.
Be it enacted by the Legislature of West Virginia:
That §5A-3-27 and §5A-3-37 of the Code of West Virginia, 1931,
as amended, be repealed; and that §5A-3-1, §5A-3-11, §5A-3-11a,
§5A-3-12, §5A-3-37a and §5A-3-45 of said code be amended and
reenacted, all to read as follows:
ARTICLE 3. PURCHASING DIVISION.
§
5A-3-1. Division created; purpose; director; applicability of
article; continuation.
There is hereby created the Purchasing Division of the
Department of Administration for the purpose of establishing
centralized offices to provide purchasing,
and travel
and leasing
services to the various state agencies. No person shall be
appointed director of the Purchasing Division unless that person
is, at the time of appointment, a graduate of an accredited college
or university and shall have spent a minimum of ten of the fifteen
years immediately preceding his or her appointment employed in an
executive capacity in purchasing for any unit of government or for
any business, commercial or industrial enterprise. The provisions
of this article shall apply to all of the spending units of state
government, except as is otherwise provided by this article or by
law
: Provided, That the provisions of this article shall not apply
to the legislative branch unless otherwise provided or the
Legislature or either house thereof requests the director to render
specific services under the provisions of this chapter, nor to
purchases of stock made by the Alcohol Beverage Control
Commissioner, nor to purchases of textbooks for the state Board of Education.
§5A-3-11. Purchasing in open market on competitive bids;
debarment; bids to be based on written
specifications; period for alteration or withdrawal
of bids; awards to lowest responsible bidder;
uniform bids; record of bids; requirements of
vendors to pay taxes, fees and debts; and
exception.
(a) The director may make a purchase of commodities, printing,
and services of twenty-five thousand dollars or less in amount in
the open market, but the purchase shall, wherever possible, be
based on at least three competitive bids, and shall include the
cost of maintenance and expected life of the commodities if the
director determines there are nationally accepted industry
standards for the commodities being purchased.
(b) The director may authorize spending units to purchase
commodities, printing and services in the amount of two thousand
five hundred dollars or less in the open market without competitive
bids:
Provided, That the cost of maintenance and expected life of
the commodities must be taken into consideration if the director
determines there are nationally accepted industry standards for the
commodities being.
(c) Bids shall be based on the
written standard specifications
promulgated and adopted in accordance with the provisions of
section five of this article and may not be altered or withdrawn after the appointed hour for the opening of the bids.
(d) A vendor who has been debarred pursuant to the provisions
of sections thirty-three-a through thirty-three-f, article three,
chapter five-a of this code, may not bid on or be awarded a
contract under this section.
(e) All open market orders, purchases based on advertised bid
requests or contracts made by the director or by a state department
shall be awarded to the lowest responsible bidder or bidders,
taking into consideration the qualities of the commodities or
services to be supplied, their conformity with specifications,
their suitability to the requirements of the government, the
delivery terms and, if the director determines there are nationally
accepted industry standards, cost of maintenance and the expected
life of the commodities
: Provided, That state bids on school buses
shall be accepted from all bidders who shall then be awarded
contracts if they meet the state board's "Minimum Standards for
Design and Equipment of School Buses." County boards of education
may select from those bidders who have been awarded contracts and
shall pay the difference between the state aid formula amount and
the actual cost of bus replacement. Any or all bids may be
rejected.
(f) If all bids received on a pending contract are for the
same unit price or total amount, the director has the authority to
reject all bids, and to purchase the required commodities, printing
and services in the open market, if the price paid in the open
market does not exceed the bid prices.
(g) The bid must be received by the Purchasing Division prior
to the specified date and time of the bid opening. The failure to
deliver or the nonreceipt of the bid by the Purchasing Division
prior to the appointed date and hour shall result in the rejection
of the bid. The vendor is solely responsible for the receipt of
bid by the Purchasing Division prior to the appointed date and hour
of the bid opening. All bids will be opened publicly by two or
more persons from the Purchasing Division. Vendors will be given
notice of the day, time and place of the public bid opening. Bids
may be viewed immediately after being opened.
(h) After the award of the order or contract, the director, or
someone appointed by him or her for that purpose, shall indicate
upon the successful bid that it was the successful bid.
Thereafter, the copy of each bid in the possession of the director
shall be maintained as a public record, shall be open to public
inspection in the office of the director and may not be destroyed
without the written consent of the Legislative Auditor.
§
5A-3-11a. Negotiation when all bids exceed available funds.
(a) Spending units shall include the maximum budgeted amount
available for each purchase in a requisition submitted to the
Purchasing Division. No person may disclose this maximum budgeted
amount to any vendor prior to the award of a contract. If all bids
submitted pursuant to a solicitation exceed the funds available for
the purchase, and the director determines in writing that there are
no additional funds available from any source to permit an award to
the responsive and responsible bidder and the best interest of the state will not permit the delay attendant to a resolicitation under
revised specifications or for revised quantities, then a negotiated
award may be made as set forth in this section.
(1) (a) If the director determines in writing that there is
only one responsive and responsible bidder, he or she may negotiate
the price for a noncompetitive award or the specifications for a
noncompetitive award based solely on the original purpose of the
solicitation.
(2) (b) If the Purchasing Division solicits bids with a
request for quotation and there is more than one bidder, the
director may negotiate with bidders determined in writing to be
responsive and responsible, based on criteria contained in the bid
invitation:
Provided, That the director must negotiate first with
the lowest bidder. If the director does not award the bid to the
lowest bidder, he or she may close negotiations with that bidder
and enter into negotiations with the next lowest bidder, and may
continue to do so in like manner with the remaining responsive and
responsible bidders. The director may not extend an offer to any
bidder that is not first extended to the prior bidders in order of
rank.
(3) (c) If the Purchasing Division solicits bids utilizing a
best value procurement, as set forth in section ten-b of this
section, and there is more than one bidder, the director may
negotiate with bidders determined in writing to be responsive and
responsible, based on criteria contained in the bid invitation
:
Provided, That the director must negotiate first with the highest
scoring bidder. If the director does not award the bid to the highest scoring bidder, he or she may close negotiations with that
bidder and enter into negotiations with the next highest scoring
bidder, and may continue to do so in like manner with the remaining
responsive and responsible bidders. The director may not extend an
offer to any bidder that is not first extended to the prior bidders
in order of rank.
(b) (d) After negotiations occur pursuant to
subsection (a) of
this section, if the director determines that more than fifteen
percent of the value of the bid must be renegotiated by revising
the specifications of the original solicitation, only a
resolicitation may be initiated or the solicitation may be
withdrawn.
(c) (e) The director may not renegotiate with any bidder after
closing negotiations with that bidder and entering into
negotiations with the next bidder.
§5A-3-12. Prequalification disclosure and payment of annual fee by
vendors required; form and contents; register of vendors;
false affidavits, etc.; penalties.
The director shall not accept any bid received from any vendor
unless the vendor has paid the annual fee specified in section four
of this article and has filed with the director an affidavit of the
vendor or the affidavit of a member of the vendor's firm, or, if
the vendor is a corporation, the affidavit of an officer, director
or managing agent, of such corporation, disclosing the following
information:
(1) If the vendor is an individual, his or her name and residence city and state of residence and business
address, and, if
he has associates or partners sharing in his business, their names
and residence city and state of residence and business addresses;
(2) If the vendor is a firm, the name and residence city and
state of residence and business address of each member, partner or
associate of the firm;
(3) If the vendor is a corporation created under the laws of
this state or authorized to do business in this state, the name and
business address of the corporation; the names and residence city
and state of residence and business addresses of the president,
vice president, secretary, treasurer and general manager, if any,
of the corporation; and the names and residence city and state of
residence and business addresses of each stockholder of the
corporation owning or holding at least ten percent of the capital
stock thereof;
(4) A statement of whether the vendor is acting as agent for
some other individual, firm or corporation, and if so, a statement
of the principal authorizing such representation shall be attached
to the affidavit or whether the vendor is doing business as another
entity;
(5) The vendor's latest Dun & Bradstreet rating, if there is
any such rating as to such vendor; and
(6) A list of one or more banking institutions to serve as
references for such vendor.
Whenever a change occurs in the information heretofore
submitted as required, such change shall be reported immediately in the same manner as required in the original disclosure affidavit.
The affidavit and information so received by the director
shall be kept in a register of vendors which shall be a public
record and open to public inspection during regular business hours
in the director's office and made readily available to the public
at such time.
The director may waive the above requirements in the case of
any corporation listed on any nationally recognized stock exchange
and in the case of any vendor who or which is the sole source for
the commodity in question.
Any person who makes such affidavit falsely or who shall
knowingly file or cause to be filed with the director, an affidavit
containing a false statement of a material fact or omitting any
material fact, shall be guilty of a misdemeanor, and, upon
conviction thereof, shall be fined not more than one thousand
dollars, and, in the discretion of the court, confined in jail not
more than one year. In any such case, an individual so convicted
shall be adjudged forever incapable of holding any office of honor,
trust or profit in this state, or of serving as a juror.
§5A-3-37a. Preference for resident vendors, veterans, small
businesses, minority owned businesses and
manufacturers; exceptions; reciprocal preference.
Except where the provisions of section thirty-seven of this
article may apply, in any instance where (a) A resident vendor
qualifies for a preference of five percent. When a purchase of commodities or printing by the director or by a state spending unit
is required under the provisions of this article to be made upon
competitive bids, preference shall be given to vendors resident in
West Virginia as against vendors resident in any state that gives
or requires a preference for the purchase of commodities or
printing produced, manufactured or performed in that state. The
amount of the preference shall be equal to the amount of the
preference applied by the other state or five percent whichever is
greater.
(b) A resident vendor which is owned by a veteran of the
United States Armed Forces, the Reserves or the National Guard,
qualifies for a total preference of seven and one-half percent.
(c) A resident vendor qualifying as a small business or as a
minority business as defined by rules promulgated by the Tax
Division qualifies for a total preference of seven and one-half
percent.
(d) Any vendor who qualifies as: (1) A resident vendor; (2)
a veteran; and (3) a small or minority business qualifies for a
total preference of ten percent.
(e) Any vendor that uses parts or commodities manufactured in
West Virginia in commodities bid to the State of West Virginia
qualifies for a two and one-half percent preference in addition to
any other preference for which it qualifies.
(f) No vendor shall receive a total preference exceeding ten
percent.
(g) A vendor shall be deemed to be a resident of this state if such vendor is an individual, partnership, association or
corporation in good standing under the laws of the State of West
Virginia who: (1) Is a resident of the state or a foreign
corporation authorized to transact business in the state; (2)
maintains an a valid business office in the state that is
conducting the type of business proposed and who has a stock of
materials held in West Virginia for sale in the ordinary course of
business, which stock is of the general type offered, and which is
reasonably sufficient in quantity to meet the ordinary requirements
of customers; (3) guarantees that on average at least seventy-five
percent of the vendor's employees are residents of West Virginia
who have resided in the state continuously for the two immediately
preceding years; and (3) (4) has paid all required federal, state
and local taxes. personal property taxes pursuant to article five,
chapter eleven of this code on equipment used in the regular course
of supplying services of the general type offered; and (4) has paid
business taxes pursuant to chapter eleven of this code. In
addition, in the case of a vendor selling tangible personal
property, a resident vendor is one who has a stock of materials
held in West Virginia for sale in the ordinary course of business,
which stock is of the general type offered, and which is reasonably
sufficient in quantity to meet the ordinary requirements of
customers
(h) Vendors must request all preferences in writing on its bid
submission.
(i) The Secretary of the Department of Revenue shall, upon advice and assistance of the director, promulgate any rules
necessary to: (i) Determine that vendors have met the residence
requirements described in this section; (ii) establish the
procedure for vendors to certify the residency requirements at the
time of submitting their bids; (iii) establish a procedure to audit
bids which make a claim for preference permitted by this section
and to reject noncomplying bids; and (iv) otherwise accomplish the
objectives of this section. In prescribing the rules, the
secretary shall use a strict construction of the residence
requirements set forth in this section. If the Secretary of the
Department of Revenue determines under any audit procedure that a
vendor improperly received a preference, the secretary may: (1)
Reject the vendor's bid; or (2) assess a penalty against the vendor
of not more than the percent of preference the vendor received when
it bid on the project.
(j) Political subdivisions of the state, including county
boards of education, may grant the same preference to any vendor of
this state who has made a written claim for the preference at the
time a bid is submitted, but for the purposes of this section, in
determining the lowest bid, any political subdivision shall exclude
from the bid the amount of business occupation taxes which must be
paid by a resident vendor to any municipality within the county
comprising or located within the political subdivision as a result
of being awarded the contract which is the object of the bid; in
the case of a bid received by a municipality, the municipality
shall exclude only the business and occupation taxes as will be paid to the municipality: Provided, That prior to soliciting any
competitive bids, any political subdivision may, by majority vote
of all of its members in the public meeting where all the votes are
recorded, elect not to exclude from the bid the amount of business
and occupation taxes as provided in this subsection.
(k) If any provision or clause of this section or application
thereof to any person or circumstance is held invalid, the
invalidity shall not affect other provisions or applications of
this section which can be given effect without the invalid
provision or application, and to this end the provisions of this
section are severable.
(l) If any of the requirements or provisions set forth in this
section jeopardize the receipt of federal funds, then such
requirements or provision shall be void and of no force and effect.
(m) This section may be cited as the "Jobs for West Virginians
Act of 2008."
§5A-3-45. Disposition of surplus state property; semiannual
report; application of proceeds from sale.
(a) The state agency for surplus property has the exclusive
power and authority to make disposition of commodities or
expendable commodities now owned or in the future acquired by the
state when the commodities are or become obsolete or unusable or
are not being used or should be replaced.
(b) The agency shall determine what commodities or expendable
commodities should be disposed of and make disposition in the manner which will be most advantageous to the state. The
disposition may include: (1) Transferring the particular
commodities or expendable commodities between departments; (2)
Selling the commodities to county commissions, county boards of
education, municipalities, public service districts, county
building commissions, airport authorities, parks and recreation
commissions, nonprofit domestic corporations qualified as tax
exempt under Section 501(c)(3) of the Internal Revenue Code of
1986, as amended, or volunteer fire departments in this state when
the volunteer fire departments have been held exempt from taxation
under Section 501(c) of the Internal Revenue Code; (3) Trading in
the commodities as a part payment on the purchase of new commodities;
(4) Cannibalizing the commodities pursuant to procedures
established under subsection (g) of this section; (5) Properly
disposing of the commodities as waste; (6) Selling the commodities
to the general public at the posted price or to the highest bidder
by means of public auctions or sealed bids, after having first
advertised the time, terms and place of the sale as a Class II
legal advertisement in compliance with the provisions of article
three, chapter fifty-nine of this code. The publication area for
the publication is the county in which the sale is to be conducted.
The sale may also be advertised in other advertising media that the
agency considers advisable. The agency may sell to the highest
bidder or to any one or more of the highest bidders, if there is
more than one, or, if the best interest of the state will be
served, reject all bids; or (7) Selling the commodities to the highest bidder by means of an Internet auction site approved by the
director, as set forth in an emergency rule pursuant to the
provisions of chapter twenty-nine-a of this code.
(c) Upon the sale to the general public or transfer of
commodities or expendable commodities between departments, or upon
the sale of commodities or expendable commodities to an eligible
organization, the agency shall set the price to be paid by the
receiving eligible organization, with due consideration given to
current market prices.
(d) The agency may sell expendable, obsolete or unused motor
vehicles owned by the state to an eligible organization, other than
volunteer fire departments. In addition, the agency may sell
expendable, obsolete or unused motor vehicles owned by the state
with a gross weight in excess of four thousand pounds to an
eligible volunteer fire department. The agency, with due
consideration given to current market prices, shall set the price
to be paid by the receiving eligible organization for motor
vehicles sold pursuant to this provision: Provided, That the sale
price of any motor vehicle sold to an eligible organization may not
be less than the "average loan" value, as published in the most
recent available eastern edition of the National Automobile
Dealer's Association (N.A.D.A.) Official Used Car Guide, if the
value is available, unless the fair market value of the vehicle is
less than the N.A.D.A. "average loan" value, in which case the
vehicle may be sold for less than the "average loan" value. The
fair market value shall be based on a thorough inspection of the vehicle by an employee of the agency who shall consider the mileage
of the vehicle and the condition of the body, engine and tires as
indicators of its fair market value. If no fair market value is
available, the agency shall set the price to be paid by the
receiving eligible organization with due consideration given to
current market prices. The duly authorized representative of the
eligible organization, for whom the motor vehicle or other similar
surplus equipment is purchased or otherwise obtained, shall cause
ownership and proper title to the motor vehicle to be vested only
in the official name of the authorized governing body for whom the
purchase or transfer was made. The ownership or title, or both,
shall remain in the possession of that governing body and be
nontransferable for a period of not less than one year from the
date of the purchase or transfer. Resale or transfer of ownership
of the motor vehicle or equipment prior to an elapsed period of one
year may be made only by reason of certified unserviceability.
(e) The agency shall report to the Legislative Auditor,
semiannually, all sales of commodities or expendable commodities
made during the preceding six months to eligible organizations.
The report shall include a description of the commodities sold, the
price paid by the eligible organization which received the
commodities and to whom each commodity was sold.
(f) The proceeds of the sales or transfers shall be deposited
in the State Treasury to the credit on a pro rata basis of the fund
or funds out of which the purchase of the particular commodities or
expendable commodities was made: Provided, That the agency may charge and assess fees reasonably related to the costs of care and
handling with respect to the transfer, warehousing, sale and
distribution of state property disposed of or sold pursuant to the
provisions of this section.
(g)(1) For purposes of this section, "cannibalization" means
the removal of parts from one commodity to use in the creation or
repair of another commodity.
(2) The director of the Purchasing Division shall propose for
promulgation legislative rules to establish procedures that permit
the cannibalization of a commodity when it is in the best interests
of the state. The procedures shall require the approval of the
director prior to the cannibalization of the commodity under such
circumstances as the procedures may prescribe.
(3) (A) Under circumstances prescribed by the procedures,
state agencies shall be required to submit a form, in writing or
electronically, that, at a minimum, elicits the following
information for the commodity the agency is requesting to cannibalize:
(i) The commodity identification number; (ii) The commodity's
acquisition date; (iii) The commodity's acquisition cost; (iv) A
description of the commodity; (v) Whether the commodity is operable
and, if so, how well it operates; (vi) How the agency will dispose
of the remaining parts of the commodity; and (vii) Who will
cannibalize the commodity and how the person is qualified to remove
and reinstall the parts.
(B) If the agency has immediate plans to use the cannibalized
parts, the form shall elicit the following information for the commodity or commodities that will receive the cannibalized part or
parts:(i) The commodity identification number; (ii) The commodity's
acquisition date; (iii) The commodity's acquisition cost; (iv) A
description of the commodity; (v) Whether the commodity is
operable; (vi) Whether the part restores the commodity to an
operable condition; and (vii) The cost of the parts and labor to
restore the commodity to an operable condition without cannibalization.
(C) If the agency intends to retain the cannibalized parts for
future use, it shall provide information justifying its request.
(D) The procedures shall provide for the disposal of the
residual components of cannibalized property.
(h) (1) The director of the Purchasing Division shall propose
for promulgation legislative rules to establish procedures that
allow state agencies to dispose of commodities in a landfill, or by
other lawful means of waste disposal, if the value of the commodity
is less than the benefit that may be realized by the state by
disposing of the commodity using another method authorized in this
section. The procedures shall specify circumstances where the
state agency for surplus property shall inspect the condition of
the commodity prior to authorizing the disposal and those
circumstances when the inspection is not necessary prior to the authorization.
(2) Whenever a state agency requests permission to dispose of
a commodity in a landfill, or by other lawful means of waste
disposal, the state agency for surplus property has the right to
take possession of the commodity and to dispose of the commodity
using any other method authorized in this section.(3) If the state agency for surplus property determines,
within fifteen days of receiving a commodity, that disposing of the
commodity in a landfill or by other lawful means of waste disposal
would be more beneficial to the state than disposing of the
commodity using any other method authorized in this section, the
cost of the disposal is the responsibility of the agency from which
it received the commodity.