Senate Bill No. 478
(By Senators Bowman and Minard)
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[Introduced February 4, 2010; referred to the Committee on
Government Organization.]
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A BILL to repeal §5A-3-14, §5A-3-21, §5A-3-22, §5A-3-23, §5A-3-24,
§5A-3-25, §5A-3-26, §5A-3-37a, §5A-3-42, §5A-3-54, §5A-3-55
and §5A-3-55a of the Code of West Virginia, 1931, as amended;
and to amend and reenact §5A-3-1, §5A-3-2, §5A-3-3, §5A-3-4,
§5A-3-10, §5A-3-10b, §5A-3-11, §5A-3-11a, §5A-3-11c, §5A-3-12,
§5A-3-15, §5A-3-18, §5A-3-19, §5A-3-35, §5A-3-36, §5A-3-37 and
§5A-3-45 of said code, all relating to the functions of the
purchasing director; procurement process; documentation of
inventory; and transportation of surplus property.
Be it enacted by the Legislature of West Virginia:
That §5A-3-14, §5A-3-21, §5A-3-22, §5A-3-23, §5A-3-24, §5A-3-
25, §5A-3-26, §5A-3-37a, §5A-3-42, §5A-3-54, §5A-3-55 and §5A-3-55a
of the Code of West Virginia, 1931, as amended, be repealed; and
that §5A-3-1, §5A-3-2, §5A-3-3, §5A-3-4, §5A-3-10, §5A-3-10b, §5A-3-11, §5A-3-11a, §5A-3-11c, §5A-3-12, §5A-3-15, §5A-3-18, §5A-3-19,
§5A-3-35, §5A-3-36, §5A-3-37 and §5A-3-45 of the code 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.
(a) The Purchasing Division of the Department of
Administration is continued for the purpose of establishing
centralized offices to provide purchasing, and travel services to
the various state agencies. No person may 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
has 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 apply to all of the spending units of state government,
except as otherwise provided by this article or by law.
(b) The provisions of this article do not apply to the
judicial branch and the legislative branch,
unless otherwise
provided or the Legislature or either house requests the director
to render specific services under the provisions of the 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-3-2. Books and records of director.
The director shall keep
in his offices accurate books,
accounts and records of all transactions of his
or her division,
and such books, accounts and records shall be public records, and
shall at all proper times be available for inspection by any
taxpayer of the state.
§5A-3-3. Powers and duties of director of purchasing.
The director, under the direction and supervision of the
secretary, shall be the executive officer of the Purchasing
Division and shall have the power and duty to:
(1) Direct the activities and employees of the Purchasing
Division;
(2) Ensure that the purchase of or contract for commodities
shall be based, whenever possible, on competitive bid;
(3) Purchasing or contract for, in the name of the state, the
commodities and printing required by the spending units of the
state government;
(4) Apply and enforce standard specifications established in
accordance with section five of this article as hereinafter
provided;
(5) Transfer to or between spending units or sell commodities that are surplus, obsolete or unused as hereinafter provided;
(6) Have charge of central storerooms for the supply of
spending units,
as the director deems advisable;
(7) Establish and maintain a laboratory for the testing of
commodities and make use of existing facilities in state
institutions for that purpose as hereinafter provided,
as the
director deems advisable;
(8) Suspend the right and privilege of a vendor to bid on
state purchases when the director has evidence that such vendor has
violated any of the provisions of the purchasing law or the rules
and regulations of the director;
(9) Examine the provisions and terms of every contract entered
into for and on behalf of the State of West Virginia that impose
any obligation upon the state to pay any sums of money for
commodities or services and approve each such contract as to such
provisions and terms; and the duty of examination and approval
herein set forth does not supersede the responsibility and duty of
the Attorney General to approve such contracts as to form
:
Provided, That the provisions of this subdivision do not apply in
any respect whatever to construction or repair contracts entered
into by the Division of Highways of the Department of
Transportation
: Provided, however, That the provisions of this
subdivision do not apply in any respect whatever to contracts entered into by the University of West Virginia Board of Trustees
or by the Board of Directors of the State College System, except to
the extent that such boards request the facilities and services of
the director under the provisions of this subdivision; and
(10) Assure that the specifications and commodity descriptions
in all "requests for quotations" are prepared so as to permit all
potential suppliers-vendors who can meet the requirements of the
state an opportunity to bid and to assure that the specifications
or descriptions as written favor a particular brand or vendor or if
it is decided, either before or after the bids are opened, that a
commodity having different specifications or quality or in
different quantity can be bought, the director may rewrite the
"requests for quotations" and the matter shall be rebid.
§5A-3-4. Rules of director.
(a) The director shall propose rules for legislative approval
in accordance with the provisions of article three, chapter twenty-
nine-a of this code to:
(1) Authorize a spending unit to purchase specified
commodities directly and prescribe the manner in which such
purchases shall be made;
(2) Authorize, in writing, a spending unit to purchase
commodities in the open market for immediate delivery in
emergencies, define such emergencies and prescribe the manner in which such purchases shall be made and reported to the director;
and for the purposes mentioned in subdivision (1) and this
subdivision (2), the head of any spending unit, or the financial
governing board of any institution, may, with the approval of the
director, make requisitions upon the Auditor for a sum to be known
as an advance allowance account, in no case to exceed five percent
of the total of the appropriations for any such spending unit, and
the Auditor shall draw his or her warrant upon the Treasurer for
such accounts; and all such advance allowance accounts shall be
accounted for by the head of the spending unit or institution once
every thirty days or more frequently if required by the State
Auditor or director
(3) Prescribe the manner in which commodities shall be
purchased, delivered, stored and distributed;
(4) Prescribe the time for making requisitions and estimates
of commodities, the future period which they are to cover, the form
in which they shall be submitted and the manner of their
authentication;
(5) Prescribe the manner of inspecting all deliveries of
commodities, and making chemical and physical tests of samples
submitted with bids and samples of deliveries to determine
compliance with specifications;
(6) Prescribe the amount
and type of deposit or bond to be submitted with a bid or contract and the amount of deposit or bond
to be given for the faithful performance of a contract;
(7) Prescribe a system whereby the director shall be required,
upon the payment by a vendor of an annual fee established by the
director, to give notice to such vendor of all bid solicitations
for commodities of the type with respect to which such vendor
specified notice was to be given, but no such fee shall exceed the
cost of giving the notice to such vendor, nor shall such fee exceed
the sum of $125 per fiscal year nor shall such fee be charged to
persons seeking only reimbursement from a spending unit;
(8) Prescribe that each state contract entered into by the
Purchasing Division shall contain provisions for liquidated
damages, remedies or provisions for the determination of the amount
or amounts which the vendor shall owe as damages, in the event of
default under such contract by such vendor,
as determined by the
director;
(9) Prescribe contract management procedures for all state
contracts except government construction contracts including, but
not limited to, those set forth in article twenty-two, chapter five
of this code;
(10) Prescribe procedures by which oversight is provided to
actively monitor spending unit purchases, including, but not
limited to, all technology and software commodities and contractual services exceeding $1 million, approval of change orders and final
acceptance by the spending units;
(11) Prescribe that each state contract entered into by the
Purchasing Division contain provisions for the cancellation of the
contract upon thirty days' notice to the vendor;
(12) Prescribe procedures for selling surplus commodities to
the highest bidder by means of an Internet auction site;
and
(13) Provide
for such other matters as may be necessary to
give effect to the foregoing rules and the provisions of this
article;
and
(14) Prescribe procedures for encumbering purchase orders to
ensure that the proper account may be encumbered before sending
purchase orders to vendors.
(b) The director shall propose rules for legislative approval
in accordance with the provisions of article three, chapter twenty-
nine-a of this code to prescribe qualifications to be met by any
person who
on and after the effective date of this section is to be
employed in the Purchasing Division as a state buyer. The rules
must provide that a person may not be employed as a state buyer
unless he or she at the time of employment either is:
(1) A graduate of an accredited college or university; or
(2) Has at least four years' experience in purchasing for any
unit of government or for any business, commercial or industrial enterprise.
Persons serving as state buyers are subject to the provisions
of article six, chapter twenty-nine of this code.
§5A-3-10. Competitive bids; publication of solicitations for
sealed bids; purchase of products of nonprofit
workshops; employee to assist in dealings with
nonprofit workshops.
(a) A purchase of and contract for commodities
and printing
and services shall be based, whenever possible, on competitive
bids.
(b) The director shall solicit sealed bids for the purchase of
commodities and printing which is estimated to exceed $25,000. No
spending unit shall issue a series of requisitions or divide or
plan procurements to circumvent this $25,000 threshold or otherwise
avoid the use of sealed bids. Any spending unit which awards
multiple contracts for the same or similar commodity or service to
an individual vendor over any twelve-month period, the total value
of which exceeds $25,000, shall file copies of all contracts
awarded to the vendor within the twelve preceding months with the
director immediately upon exceeding the $25,000 limit, along with
a statement explaining how the multiple contract awards do not
circumvent the $25,000 threshold. If the spending unit does not
immediately report to the director, the director may suspend the purchasing authority of the spending unit until the spending unit
complies with the reporting requirement of this subsection. The
director may conduct a review of any spending unit to ensure
compliance with this subsection. Following a review, the director
shall complete a report summarizing his or her findings and forward
the report to the spending unit. In addition, the director shall
report to the Joint Committee on Government and Finance on January
1 and July 1 of each year the spending units which have reported
under this subsection and the findings of the director.
The
director shall not approve purchases made in violation of this
section.
(c) The director may permit bids by electronic transmission to
be accepted in lieu of sealed bids.
(d) Bids shall be solicited by public notice. The notice may
be published by any advertising medium the director deems
advisable. The director may also solicit sealed bids by sending
requests by mail or electronic transmission to prospective vendors.
(e) The director shall, without competitive bidding, purchase
commodities and services produced and offered for sale by nonprofit
workshops, as defined in section one, article one of this chapter,
which are located in this state
: Provided, That such commodities
and services otherwise available as determined by the director with
the advice of the committee on the purchase of commodities and services from the handicapped.
To encourage contracts for commodities and services with
nonprofit workshops, the director shall employ a person whose
responsibilities in addition to other duties
shall be are to
identify all commodities and services available for purchase from
nonprofit workshops, to evaluate the need of the state for
commodities and services to coordinate the various nonprofit
workshops in their production efforts and to make available to such
workshops information about available opportunities within state
government for purchase of commodities or services which might be
produced and sold by such workshops. Funds to employ such a person
shall be included annually in the budget.
§5A-3-10b. Best value procurement.
(a) The director may utilize best value procurement to enter
into a contract when he or she determines
in writing that it is
advantageous to the state.
(b) A solicitation for bids under best value procurement shall
be made in the same manner as provided in section ten of this
article.
(c) Best value procurement awards shall be based on criteria
set forth in the solicitation including, but not limited to price.
Additional considerations may include the total cost of acquiring,
operating, maintaining and supporting a commodity or service over its projected lifetime, the evaluated technical merit of the
bidder's bid or proposal, the bidder's past performance, and the
evaluated probability of performing the requirements stated in the
solicitation on time, with high quality, and in a manner that
accomplishes the business objectives set forth in the solicitation.
(d) The award must be made to the highest scoring responsive
and responsible bidder whose bid is determined
in writing to be
most advantageous to the state, taking into consideration all
evaluation factors set forth in the best value solicitation.
(e) The director may not use best value procurement to enter
into government construction contracts, including, but not limited
to, those set forth in article twenty-two, chapter five of this
code.
§5A-3-11. Purchasing in open market on competitive bids;
debarment; bids to be based on standard
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 $25,000 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 $2,500 or less
in the open market without competitive bids
: Provided, That the
cost of maintenance and expected life of commodities must be taken
into consideration if the director determines there are nationally
accepted industry standards for the commodities being
purchased.
(c) Bids shall be based on written specifications in the
advertised bid request 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
of this 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 before 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 before the appointed date and hour shall result
in the rejection of the bid. The vendor is solely responsible for
the receipt of
the bid by the Purchasing Division
prior to
before 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
and 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 budget in requisition.
(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, then a negotiated award may be made as set forth in
this section.
(1) If the director determines in writing that there is only
one responsive and responsible bidder, he or she may
negotiate the
price authorize price negotiations for a noncompetitive award or
the specifications for a noncompetitive award based solely on the original purpose of the solicitation.
(2) If the Purchasing Division solicits bids with a request
for quotation and there is more than one bidder, the director may
negotiate authorize negotiations 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) If the Purchasing Division solicits bids utilizing a best
value procurement, as set forth in section ten-b of this
section
article, and there is more than one bidder, the director may
negotiate authorize negotiations 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)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) (b) The director may not
renegotiate authorize
renegotiations with any bidder after closing negotiations with the
next bidder.
§5A-3-11c. Multiple awards.
The director may elect to award a contract to one or more
responsive and responsible bidders if the director determines
in
writing that a single award to an individual bidder would be
insufficient:
Provided, That the basis for the selection among
multiple contracts at the time of purchase shall be the most
practical and economical alternative and shall be in the best
interest of the state.
§5A-3-12. Prequalification disclosure and payment of annual fee by
vendors required; form and contents; register of
vendors; false certificates; penalties.
(a) The director may 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 a certificate of the vendor or the
affidavit certificate
of a member of the vendor's firm or, if the vendor is a corporation,
the
affidavit certificate of an officer, director or managing agent
of the corporation, disclosing the following information:
(1) If the vendor is an individual, his or her name and city
and state of residence and business address, and, if he or she has
associates or partners sharing in his business, their names and city
and state of residence and business addresses;
(2) If the vendor is a firm, the name and 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 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 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 the representation shall be attached
to the
affidavit certificate or whether the vendor is doing business
as another entity;
(5) The vendor's latest Dun & Bradstreet
number and rating, if
there is any rating as to the vendor;
and
(6) A list of one or more banking institutions,
if such
institution is available, to serve as references for the vendor;
and
(7) The vendor's tax identification number.
(b) Whenever a change occurs in the information submitted as
required, the change shall be reported immediately in the same
manner as required in the original disclosure
affidavit certificate.
(c) The
affidavit certificate and information received by the
director shall be
kept in a register of vendors which shall be made
a public record.
and open to public inspection during regular
business hours in the director's office and made readily available
to the public
(d) 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.
(e) Any person who
makes an affidavit falsely submits a false
certificate or who knowingly files or causes to be filed with the
director,
an affidavit a certificate containing a false statement of a material fact or omitting any material fact, is guilty of a
misdemeanor and, upon conviction, shall be fined not more than
$1,000, and, in the discretion of the court, confined in jail not
more than one year. An individual convicted of a misdemeanor under
this subsection may never hold an office of honor, trust or profit
in this state, or serve as a juror.
§5A-3-15. Emergency purchases in open market.
The director may authorize
in writing a state spending unit to
purchase in the open market, without filing requisition or estimate,
specific commodities for immediate delivery to meet bona fide
emergencies arising from unforeseen causes, including delays by
contractors, delays in transportation and unanticipated volume of
work. A report of any such purchase, together with a record of the
competitive bids upon which it was based, shall be submitted at once
to the director by the head of the state spending unit concerned,
together with a full account of the circumstances of the emergency
:
Provided, That the director may waive the need for the record of
competitive bids. Such report shall be entered on a record and
shall be open to public inspection.
§5A-3-18
. Substituting for commodity bearing particular trade name
or brand.
If a spending unit requests the purchase of a commodity bearing
a particular trade name or brand,
and if the commodity is covered by standard specifications adopted as provided by section five of
this article the director may substitute a commodity bearing a
different trade name or brand, if the substituted commodity
reasonably conforms to the adopted standard specifications and can
be obtained at an equal or lower price.
§5A-3-19. Purchases from federal government and other sources.
(a) Notwithstanding any other provision of this article, the
director may
upon the recommendation of a state spending unit,
participate in, sponsor, conduct or administer a cooperative
purchasing agreement or consortium for the purchase of commodities
or services with agencies of the federal government, agencies of
other states, other public bodies or other state agencies, if
available and financially advantageous. At the discretion of the
director, bids may be solicited to determine whether participation
in such a cooperative purchasing agreement or consortium is
financially advantageous.
(b) The Department of Administration may approve administrative
fees, not to exceed the amount of $50,000, necessary to participate
in a cooperative purchasing agreement. Fees which exceed $50,000
are subject to the competitive bid requirements of this article.
§5A-3-35. Submission of annual inventories.
The head of every spending unit of state government shall,
on
or before July 15 of each year, file with the director an inventory
or certify the accuracy of the inventory of all
real and personal
property, and of all equipment, supplies and commodities in its
possession as of the close of the last fiscal year, as directed by
the director.
§5A-3-36. Inventory of removable property.
The director
shall have has the power and duty to
(1) make and
keep current an inventory of all removable property belonging to
the state. Such inventory shall be kept on file in the office of
the director as a public record. The inventory shall disclose the
name and address of the vendor, the date of purchase, the price paid
for the property therein described and the disposition thereof.
(2) Provide for the maintenance and repair of all office
furniture, machinery and equipment belonging to the state, either
by employing personnel and facilities under his director or by
contract with state agencies or private parties.
§5A-3-37. Preference for resident vendors;
preference for veteran
residents; exceptions.
(a) In any instance where 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 other state. If the resident
vendor's bid does not exceed the lowest qualified bid from a nonresident vendor by more than six percent of the latter bid, and
if the vendor has made written claim for the preference at the time
the bid was submitted, the award shall be made to the resident
vendor. This preference is only applicable to the cost portion of
a vendor's bid submission.
(b) A resident vendor preference of six percent is available
to a vendor successfully certifying that the vendor:
(1) Is registered to transact business within the State of West
Virginia in accordance with article twelve, chapter eleven of this
code;
(2)Maintains its headquarters or principal place of business
within the state;
(3) Has paid 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 actually paid, and not just applied to pay, all
required business taxes imposed by 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.
(c) In addition to the six percent preference provided in
subsection (b) of this section, resident vendors who qualify for the
six percent preference are entitled to an additional two percent
upon proof that:
(1) The vendor is a veteran of the United States Armed Forces,
the reserves or the National Guard; or
(2) The vendor uses products manufactured in West Virginia, and
such products comprise at least fifty percent of the products
offered in the bid and utilized to fulfill the contract.
(d) No resident vendor shall receive more than an eight percent
preference unless that vendor is competing against a nonresident
vendor from a state that offers a preference in excess of the
percentage offered by this section.
(e) If any of the requirements or provisions set forth in this
section jeopardize the receipt of federal funds, then the
requirement or provisions are void and of no force and effect for
that specific project.
(f) 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.
§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.
State agencies are responsible for the
cost of transportation of surplus property to the state agency for
surplus property or other location.
(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 section (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
before 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 of 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 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 before authorizing the disposal and those
circumstances when the inspection is not necessary
prior to
before 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.
NOTE: The purpose of this bill is to amend the various
functions of the Purchasing Division director, the requirements of
the procurement process, the documentation of state inventory, and
the transportation of state surplus property.
Strike-throughs indicate language that would be stricken from
the present law, and underscoring indicates new language that would
be added.
§5A-3-37 has been completely rewritten; therefore, strike-
throughs and underscoring have been omitted.