H. B. 4447

         (By Delegates Howell, Ferns, Border-Sheppard,

         Faircloth, Romine, Kump, Folk, Cadle, R. Smith,

         Arvon and Azinger)

         [Introduced February 10, 2014; referred to the

         Committee on the Judiciary then Finance.]

A BILL to amend the Code of West Virginia, 1931, as amended, by adding thereto a new section, designated §5A-1-10; to amend said code by adding thereto a new section, designated §5A-3-14; to amend and reenact §5A-3-1, §5A-3-3 and §5A-3-17 of said code; and to amend and reenact §61-5A-7 of said code, all relating to state procurement; requiring spending units and subdivisions to purchase commodities and services on a competitive basis except during a declared state of emergency; authorizing the secretary of the Department of Administration to issue a notice to cease and desist when purchases are not made on a competitive basis; clarifying the purposes and policies of the Purchasing Division; clarifying the applicability of the article; authorizing the director of the Purchasing Division to issue a notice to cease and desist when purchases are not made on a competitive basis; requiring the Purchasing Division director to comply with federal law and authorized regulations when a procurement involves the expenditure of federal assistance or contract funds; requiring the Purchasing Division director to offer mandatory annual procurement training; and clarifying any person found to have willfully entered into a contract contrary to the article shall be subject to penalty; establishing criminal offenses for a person or combination of persons, to agree, plan or scheme to submit bids, not to submit bids or to withdraw bids in a manner prearranged among themselves in order to arrive at a predetermined result; and providing criminal penalties upon conviction.

Be it enacted by the Legislature of West Virginia:

    That the Code of West Virginia, 1931, as amended, be amended by adding thereto a new section, designated §5A-1-10; that said code be amended by adding thereto a new section, designated §5A-3-14; that §5A-3-1, §5A-3-3 and §5A-3-17 of said code be amended and reenacted; and that §61-5A-7 of said code be amended and reenacted, all to read as follows:

CHAPTER 5A. DEPARTMENT OF ADMINISTRATION.

ARTICLE 1. DEPARTMENT OF ADMINISTRATION.

§5A-1-10. General procurement provisions for the state and its               subdivisions, and spending units.

    (a) Notwithstanding an exemption from chapter 5A, article 3 of this code, purchases for commodities and services by spending units and political subdivisions shall be based on a competitive basis, except during a state of emergency.

    (b) The secretary shall issue a notice to cease and desist to any spending unit or political subdivision when the secretary has credible evidence that a spending unit or political subdivision has failed, when possible and practicable, to purchase commodities and services on a competitive basis.

ARTICLE 3. PURCHASING DIVISION.

§5A-3-1. Division created; purpose; director; applicability of article; continuation.

    (a) The Purchasing Division within the Department of Administration is continued. for the purpose of establishing centralized offices to provide purchasing, and travel services to the various state agencies. The underlying purpose and policies of the Purchasing Division are:

    (1) To simplify, clarify, and modernize the law governing procurement by this state;

    (2) To permit the continued development of procurement policies and practices;

    (3) To make as consistent as possible the procurement laws among the various spending units;

    (4) To provide for increased public confidence in the procedures followed in public procurement;

    (5) To ensure the fair and equitable treatment of all persons who deal with the procurement system of this state;

    (6) To provide increased economy in procurement activities and to maximize to the fullest extent practicable the purchasing value of public funds;

    (7) To foster effective broad-based competition within the free enterprise system;

    (8) To provide safeguards for the maintenance of a procurement system of quality and integrity; and

    (9) To obtain in a cost-effective and responsive manner the materials, services, and construction required by spending units in order for those spending units to better serve this state’s businesses and residents.

    (b) The director of the Purchasing Division shall, at the time of appointment:

    (1) Be a graduate of an accredited college or university; and

    (2) 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.

    (c) 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.

    (d) The provisions of this article do not apply to the judicial branch, the legislative branch, to purchases of stock made by the Alcohol Beverage Control Commissioner, and to purchases of textbooks for the State Board of Education.

    (e) The provisions of this article apply to every expenditure of public funds for commodities and services irrespective of their source, including federal assistance moneys, by this state, acting through a governmental body, under any contract: Provided, That nothing in this article or the rules promulgated hereunder prevents any spending unit or political subdivision from complying with the terms and conditions of any grant, gift, bequest, or cooperative agreement.

    (f) Notwithstanding an exemption to this article, the director of the Purchasing Division shall oversee purchases made by any spending unit that exceed ninety percent of the largest purchase contract amount entered into by the spending unit during the current fiscal year or during the fiscal year immediately preceding the current fiscal year.

§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 and descriptions do not favor a particular brand or vendor. If the director determines that any such 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;

    (11) Issue a notice to cease and desist to a spending unit when the director has credible evidence that a spending unit has violated competitive bidding requirements established by this article or the rules promulgated hereunder; and

    (12) When a procurement involves the expenditure of federal assistance or contract funds, the director shall comply with such federal law and authorized regulations which are mandatorily applicable and which are not presently reflected in this article.

§5A-3-14. Mandatory training for spending units.

    (a) The director shall provide at least one seminar each year for spending units to inform the spending units of the procurement duties and requirements imposed by state law and rule. All spending units shall cooperate with and assist in providing the seminar if the director requests.

    (b) The head of each spending unit and the head procurement officer for the spending unit shall annually attend at least one seminar provided under this section.

    (c) The director may charge a registration fee for the seminar to cover the cost of providing the seminar. The fee may be paid from funds available to the spending unit and a spending unit may approve an expense reimbursement for the attendance of its employees.

    (d) Prior to January 1 of each year, the director shall provide to the chairs of the Joint Standing Committee on Government Organization a list of:

    (1) The names and titles of persons who attended the seminar;

    (2) The spending units represented; and

    (3) The number and dates of the seminars offered by the director during the previous year.

§5A-3-17. Purchases or contracts violating article void; personal liability.

    If a spending unit purchases or contracts for commodities contrary to the provisions of this article or the rules and regulations made thereunder, such purchase or contract shall be void and of no effect. The head of such spending unit Any person found to have willfully entered into a contract contrary to the provisions of this article shall be personally liable for the costs of such purchase or contract, and, if already paid out of state funds, the amount thereof may be recovered in the name of the state in an appropriate action instituted therefor.

CHAPTER 61. CRIMES AND THEIR PUNISHMENT.

ARTICLE 5A. BRIBERY AND CORRUPT PRACTICES.

§61-5A-7. Bid Rigging prohibited.

    It is unlawful:

    (a) For any public servant in any department, agency, division, board, bureau or commission of government exercising regulatory functions, or conducting inspections or investigations, or carrying on civil or criminal litigation on behalf of the government, to conspire, agree or plan, directly or indirectly, in any person's, or combination of person’s, agreement, plan or scheme to submit bids, not to submit bids or to withdraw bids in a manner prearranged among themselves in order to arrive at a predetermined result.

    (b) For any person, or combination of persons, to agree, plan or scheme in which, in response to a call or request for bids, proposals or tenders, one or more bidders agree not to submit a bid, or two or more bidders agree to submit bids or to withdraw bids that have been prearranged among themselves in order to arrive at a predetermined result.

    (c) (1) A person who violates this section with regard to a contract of $100,000 or more in value is guilty of a felony, designated as first degree bid rigging, and, upon conviction thereof, shall be imprisoned in a correctional facility not less than one nor more than ten years, or, in the discretion of the court, be confined in jail not more than one year and shall be fined not more than $20,000.

    (2) If a person violates this section with regard to a contract of less than $100,000 dollars in value, the person is guilty of a misdemeanor, of first degree bid rigging, and, upon conviction thereof, shall be confined in jail for a term not to exceed one year or fined not to exceed $10,000, or both fined and confined, in the discretion of the court.

    NOTE: The purpose of this bill is to require spending units and subdivisions to purchase commodities and services on a competitive basis; authorize the secretary of the Department of Administration to issue a notice to cease and desist when purchases are not made on a competitive basis; clarify the purposes and policies of the Purchasing Division; clarify the applicability of the article; authorize the Director of the Purchasing Division to issue a notice to cease and desist when purchases are not made on a competitive basis except during a declared state of emergency; require the Director of the Purchasing Division to comply with federal law and authorized regulations when a procurement involves the expenditure of federal assistance or contract funds; require the Director of the Purchasing Division to offer mandatory annual procurement training; and clarify that any person found to have willfully entered into a contract contrary to the article shall be subject to penalty. The bill also establishes criminal offenses for a person or combination of persons, to agree, plan or scheme to submit bids, not to submit bids or to withdraw bids in a manner prearranged among themselves in order to arrive at a predetermined result; and providing criminal penalties upon conviction.

    Strike-throughs indicate language that would be stricken from the present law, and underscoring indicates new language that would be added.

    §5A-1-10 and §5A-3-14 are new, and §61-5A-7 is totally rewritten; therefore they are completely underscored.