Senate Bill No. 517

(By Senators Dittmar and Chafin)


[Introduced February 20, 1995; referred to the Committee
on Government Organization; and then to the Committee on Finance.]

A BILL to amend and reenact sections thirty-eight, thirty-nine, forty and forty-one, article three, chapter five-a of the code of West Virginia, one thousand nine hundred thirty-one, as amended, relating to leases of buildings, grounds, offices or other space by the state; requiring the state to award lease to vendor with the lowest competitive bid; promulgation of regulations; and providing an administrative procedure to be used by the state when leasing property from private vendors.

Be it enacted by the Legislature of West Virginia:
That sections thirty-eight, thirty-nine, forty and forty-one, article three, chapter five-a of the code of West Virginia, one thousand nine hundred thirty-one, as amended, be amended and reenacted to read as follows:

§5A-3-38. Leases for space to be made in accordance with

article; exception.

Notwithstanding any other provision of this code, no A department, agency or institution of state government shall may not lease, or offer to lease, as lessee, any grounds, buildings, office or other space except in accordance with this article: Provided, That the provisions of this article except as to office space shall not apply in any respect whatever to the division of highways of the department of transportation. A lease, or offer to lease, any grounds, buildings, office or other space on behalf of the state shall be based on competitive bids.
§5A-3-39. Leasing of space by secretary; delegation of


The secretary is authorized to solicit sealed bids for the lease, in the name of the state, of any grounds, buildings, office or other space required by any department, agency or institution of state government: Provided, That the secretary may expressly delegate, in writing, the authority granted to him by this article to the appropriate department, agency or institution of state government when the rental and other costs to the state do not exceed the sum specified by regulation of five thousand dollars in any one fiscal year or when necessary to meet bona fide emergencies arising from unforeseen causes.
§5A-3-40. Selection of grounds, etc.; acquisition by lease;

long-term leases; requiring approval of secretary for permanent changes.

The secretary shall have sole authority is authorized to select and to acquire by contract or lease, by competitive bid, in the name of the state, all grounds, buildings, office space or other space, the rental of which is necessarily required by any spending unit, upon a certificate from the chief executive officer or his designee of said the spending unit that the grounds, buildings, office space or other space requested is necessarily required for the proper function of said the spending unit, that the spending unit will be responsible for all rent and other necessary payments in connection with the contract or lease and that satisfactory grounds, buildings, office space or other space is not available on grounds and in buildings now owned or leased by the state. The secretary shall, before executing any rental contract or lease, determine the fair rental value for the rental of the requested grounds, buildings, office space or other space, in the condition in which they exist, and shall contract for or lease said premises at a price not to exceed the fair rental value thereof
The secretary is hereby authorized to enter into long-term agreements for leases of buildings, land and space for periods longer than one fiscal year: Provided, That such the long-term lease agreements shall not be are not for periods in excess of forty years, except that the secretary may, in the case of the adjutant general's department, enter into lease agreements for a term of fifty years or a specific term of more than fifty years so as to comply with federal regulatory requirements, and shall contain, in substance, all the following provisions: (1) That the department of administration, as lessee, shall have the right to cancel the lease without further obligation on the part of the lessee upon giving thirty days' written notice to the lessor, such the notice being given at least thirty days prior to the last day of the succeeding month; (2) that the lease shall be considered canceled without further obligation on the part of the lessee if the state Legislature or the federal government should fail to appropriate sufficient funds therefor to pay for the lease or should otherwise act to impair the lease or cause it to be canceled; and (3) that the lease shall be is considered renewed for each ensuing fiscal year during the term of the lease unless it is canceled by the department of administration before the end of the then current fiscal year.
A spending unit which is granted any grounds, buildings, office space or other space leased in accordance with this section may not order or make permanent changes of any type thereto, unless the secretary has first determined that the change is necessary for the proper, efficient and economically sound operation of the spending unit. For purposes of this section, a "permanent change" means any addition, alteration, improvement, remodeling, repair or other change involving the expenditure of state funds for the installation of any tangible thing which cannot be economically removed from the grounds, buildings, office space or other space when vacated by the spending unit.
§5A-3-41. Leases signed by secretary or director; approval as

to form and filing.

Leases and other instruments for grounds, buildings, office or other space shall be signed by the secretary or director in the name of the state. They shall be approved as to form by the attorney general. A lease or other instrument for grounds, buildings, office or other space that contains a term, including any options, of more than six months for its fulfillment shall be filed with the state auditor.
(a) The director shall adopt and amend rules to:
(1) Prescribe the amount of deposit or bond to be submitted with a bid and the amount of deposit or bond to be given for the faithful performance of a lease;
(2) Prescribe a system for the director to give notice to vendors requesting notice of all bid solicitations for leases. A fee not to exceed the cost of giving the notice to the vendor may be charged: Provided, That the fee may not exceed forty-five dollars in one fiscal year;
(3) Apply and enforce standard specifications for leases;
(4) Suspend the right and privilege of a vendor to bid on state leases when the director has evidence that the vendor has violated any of the provisions of this article or the rules of the director.
(b) The director shall examine the provisions and terms of every lease 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 and approve each lease with respect to the provisions and terms of the lease. The duty of examination and approval by the director does not supersede the responsibility and duty of the attorney general to approve contracts as to form and the director shall assure that the specifications and descriptions in all "requests for quotations" are prepared so as to permit all potential lessor-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 vendor. If the director determines that any specifications or descriptions as written favor a particular vendor or if it is decided, either before or after the bids are opened, that a lease having different specifications or quality can be entered into, the director may rewrite the "requests for quotations" and the matter shall be rebid.
(c) Bids shall be based on the standard specifications promulgated and adopted in accordance with the provisions of this section and shall not be altered or withdrawn after the appointed hour for the opening of such bids. All leases based on advertised bid requests made by the director or by a state department shall be awarded to the lowest responsible bidder, taking into consideration the qualities of the buildings, structures, grounds or property involved, conformity with specifications, suitability to the requirements of the government and the lease terms. All bidders submitting bid proposals to the director are required to submit an extra or duplicate copy to the state auditor.
Both copies must be received at the respective offices prior to the specified date and time of the bid openings. The failure to deliver or the nonreceipt of these bid forms at either of these offices prior to the appointed date and hour are grounds for rejection of the bids. In the event of any deviation between the copies submitted to the director and the state auditor, the bids as to which there is a deviation shall be rejected, if the deviation relates to the quality or specifications of the proposed lease property or to the cost of the lease or to the date of delivery or performance. After the award of the lease, the director, or someone appointed by him for that purpose, shall indicate upon the successful bid and its copy in the office of the state auditor that it was the successful bid. Thereafter, the copy of each bid in the possession of the director and the state auditor shall be maintained as a public record by both of them, shall be open to public inspection in the offices of both the director and the state auditor and shall not be destroyed by either of them without the written consent of the legislative auditor. If the director permits bids by facsimile transmission machine to be accepted in lieu of sealed bids, a duplicate facsimile transmission machine bid shall be transmitted to the state auditor pursuant to this section: Provided, That an original bid is received by the state auditor within two working days following the date specified for bid opening.
(d) The director shall not accept any bid received from any vendor unless the vendor has paid the annual fee established by rule promulgated by the director 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 name and residence address, and, if he has associates or partners sharing in his business, their names and residence addresses;
(2) If the vendor is a firm, the name and residence 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 addresses of the president, vice president, secretary, treasurer and general manager, if any, of the corporation; and the names and residence 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 knowingly files or causes to be filed with the director, an affidavit containing a false statement of a material fact or omitting any material fact, is guilty of a misdemeanor, and, upon conviction thereof, shall be fined not more than one thousand dollars, or imprisoned in a county or regional jail not more than one year or both fined and imprisoned. 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.

NOTE: The purpose of this bill is to require competitive bidding on all property to be leased by the state for use by state agencies. The bill authorizes the Secretary of Administration to enter into leases with the lowest bidding vendor for buildings, grounds, offices or other space deemed necessary or useful for the operation of state agencies. The director of purchasing is given responsibilities under the bill to promulgate rules and to ensure that the bidding process is fair.

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