H. B. 2438


(By Delegates Tillis, Louisos, Damron,
Linch, Kuhn, Hutchins and Henderson)
[Introduced March 6, 1997; referred to the
Committee on Finance.]



A BILL to amend and reenact section eleven, article three, chapter five-a of the code of West Virginia, one thousand nine hundred thirty-one, as amended, relating to purchasing in open market on competitive bids; bids to be based on standard specifications; period for alteration or withdrawal of bids; awards to lowest responsible bidder; uniform bids; record of bids; exceptions; debarment of vendors.

Be it enacted by the Legislature of West Virginia:
That section eleven, 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:
ARTICLE 3. PURCHASING DIVISION.
§5A-3-11. Purchasing in open market on competitive bids; bids

to be based on standard specifications; period for alteration or withdrawal of bids; awards to lowest responsible bidder; uniform bids; record of bids; and exception.
The director may make a purchase of commodities, printing, and services of ten thousand dollars or less in amount in the open market, but such purchase shall, wherever possible, be based on at least three competitive bids.
The director may authorize spending units to purchase commodities, printing and services in the amount of one thousand dollars in the open market without competitive bids.
Bids shall be based on the standard specifications promulgated and adopted in accordance with the provisions of section five of this article, and shall may not be altered or withdrawn after the appointed hour for the opening of such bids. 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, taking into consideration the qualities of the articles to be supplied, their conformity with specifications, their suitability to the requirements of the government and the delivery terms: 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. If all bids received on a pending contract are for the same unit price or total amount, the director shall have 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.
The provisions in this section shall govern the debarment of vendors. "Debar" means to exclude, pursuant to established administrative procedures, from contracting and subcontracting with the state for a specified period of time commensurate with the seriousness of the failure or offense or the inadequacy of performance.
A vendor or supplier of goods or services to the state or a governmental agency and the enterprise for which the illegal action was taken, convicted under this chapter, or convicted under the laws of any other state or the federal government for actions which would constitute a violation of this chapter, are prohibited from bidding on a state or governmental contract for three years from the date of conviction, unless the state or governmental agency accepting bids expressly allows the vendor or supplier to bid after being informed of the conviction.
(a) Debarment shall be imposed only in the public interest for the state's protection and not for purposes of punishment and shall be imposed only for the causes set forth in this chapter.
(b) The director shall obtain lists of vendors declared ineligible under federal laws and regulations applicable to the state and shall notify state agencies of the ineligibility restrictions promulgated under federal authority in accordance with the provisions of subsection (d) of this section.
(c) Any state official making a declaration of the ineligibility of any individual or firm to contract or subcontract with the state under authority of any state statute or regulation shall inform the director in writing of the declaration. The notice to the director shall cite the statutory basis for the declaration and the grounds for the declaration. The director shall include notice of the ineligibility restrictions on the lists issued under subsection (d) of this section.
(d) The director shall compile and maintain a current, consolidated list of all vendors that have been debarred or declared ineligible.
(e) The director shall revise and distribute the consolidated list quarterly to all agencies and shall provide with the list the name and telephone number of the official responsible for its maintenance and telephone number of the official responsible for its maintenance and distribution.
(f) The consolidated list shall include the following:
(1) The names and addresses of all debarred or ineligible vendors, in alphabetical order, with cross references when more than one name is involved in a single action;
(2) The cause for each action, and pertinent statutory or regulatory authority;
(3) The scope of the action;
(4) The name of the state or federal agency or other authority responsible for the action, and the name and telephone number of the point of contact for the action; and
(5) The termination date for each listing.
(g) Unless the director determines in writing that there is a compelling reason to do otherwise, an agency may not solicit offers from, award contracts to, or consent to subcontract with a debarred vendor.
(h) A vendor listed as ineligible shall be excluded from receiving contracts and, if applicable, subcontracts, under the conditions and for the period set forth in the applicable statute or regulation.
(i) After the opening of bids or receipts of proposals, the contracting officer shall review the list of parties excluded from procurement programs.
(1) Bids received from any listed vendor in response to an invitation for bids shall be entered on the abstract of bids, and rejected unless the acquiring agency's head or designee determines in writing that there is a compelling reason to consider the bid.
(2) Proposals, quotations or offers received from any listed vendor may not be evaluated for award or included in the competitive range, nor may discussions be conducted with a listed offeror during a period of ineligibility, unless the acquiring agency's head or designee determines, in writing, that there is a compelling reason to do so.
(3) Immediately prior to award, the contracting officer shall again review the list to ensure that no award is made to a listed vendor.
(j) The contracting officer may not exercise an option to renew or otherwise extend a current contract with a debarred vendor, or a contract which is being performed in any part by a debarred subcontractor, unless the director approves the action in writing, based on compelling reasons for exercise of the option or extension.
(k) In any subcontract subject to the state's consent, the contracting officer may not consent to the award of a subcontract to any debarred vendor unless the director approves the award, in writing, based on compelling reasons for the award.
(1) The director may debar a vendor for any of the following causes:
(1) Conviction of, or civil judgment for, commission of fraud or a criminal offense in connection with obtaining, attempting to obtain or performing a public contract or subcontract;
(2) Conviction of, or civil judgment for, violation of any federal or state antitrust statute relating to the submission of offers;
(3) Conviction of, or civil judgment for, commission of embezzlement, theft, forgery, bribery, falsification or destruction of records, making false statements or receiving stolen property in connection with the performance of a vending contract;
(4) Conviction of, or civil judgment for, commission of any other offense indicating a lack of business integrity or business honesty that seriously and directly affects the present responsibility of the vendor or subcontractor;
(5) Violation of the term of a state contract or subcontract so serious as to justify debarment, such as willful failure to perform in accordance with the terms of one or more state contracts, a history of failure to perform or unsatisfactory performance on one or more state contracts;
(6) Conviction of provisions of the West Virginia Workers' Compensation Act, convictions of the West Virginia Unemployment Compensation Act, convictions of the West Virginia tax department laws, convictions of the provisions of the West Virginia vendor's licensing statutes and convictions of the West Virginia department of labor statutes and regulations.
(7) Any other cause of a serious or compelling nature that affects the present responsibility of the vendor or subcontractor.
(m) Debarment shall constitute debarment of all divisions or other organizational elements of the vendor, unless the debarment decision is limited by its terms to specific divisions, organizational elements or commodities.
(n) The director may extend the debarment decision to include any affiliates of the vendor by specifically naming the affiliate and giving the affiliate written notice of the proposed debarment and an opportunity to respond in accordance with the provisions of this chapter.
(o) The director may reduce the period or extent of debarment, upon the vendor's request supported by documentation, for the following reasons:
(1) Newly discovered material evidence;
(2) Reversal of the conviction or judgment upon which debarment was based; or
(3) Elimination or other causes for which the debarment was imposed.
(p) The director may extend the debarment period for an additional period if the director determines that the extension is necessary to protect the interests of the state. The extension of debarment shall be subject to the procedures set forth in subsection (q) of this section.
(q) The director shall initiate debarment proceedings by notifying the vendor and any specifically named affiliates by certified mail, return receipt requested, of the following:
(1) The reasons for the proposed debarment in sufficient detail to put the vendor on notice of the conduct or transactions upon which the proposed debarment is based;
(2) The causes, set forth in subsection (k) of this section, relied upon for the proposed debarment;
(3) That within thirty working days after receipt of the notice, the vendor may submit, in person, in writing, or through a representative, information and argument in opposition to the proposed debarment, including any additional specific information which raises a genuine issue of material fact;
(4) The state's procedures governing debarment decision-making;
 (5) The potential effect of the proposed debarment; and
 (6) That the state will not solicit offers from, award contracts to, renew, or otherwise extend contracts with, or consent to subcontracts with the vendor pending debarment decision.
(r) In debarment actions not based upon a conviction or civil judgment, if the director finds that the vendor's submission in opposition raises a genuine dispute over facts material to the proposed debarment, the director, in accordance with the provisions found in sections one through five, article five, chapter twenty-nine-a of this code, shall do the following:
(1) Afford the vendor an opportunity to appear with counsel, submit documentary evidence, present witnesses and confront any state evidence or testimony; and
(2) Make an electronic record of the proceedings and make a copy or transcription of the record available at cost to the vendor upon request;
 (3) The hearing will be conducted in Kanawha County unless otherwise located by the director.
(s) In any action in which the proposed debarment is not based upon a conviction or civil judgment, the cause for debarment shall be established by a preponderance of the evidence.
(t) In actions based upon a conviction or civil judgment, or in which there is no genuine issue of material fact, the director shall make a decision on the basis of all the information in the administrative record, including any submission made by the vendor.
(u) The decision under subsection (r) of this section shall be made within thirty working days after receipt of any information and argument submitted by the vendor, unless the director extends this period for good cause.
 (v) In actions in which additional proceedings are necessary to decide issues of material fact, the director shall prepare written findings of fact. The director shall base the debarment decision on the facts as found, together with any information and argument submitted by the vendor and any other information in the administrative record.
(w) If the director decides to impose debarment, the vendor and any affiliates involved shall be given prompt notice of the debarment action by certified mail, return receipt requested.
The notice shall include the following:
(1) A reference to the notice of proposed debarment;
(2) The specific reasons for the debarment;
 (3) The period of debarment, including effective dates;
(4) A statement advising that the debarment is effective throughout the executive branch of the state government unless the commissioner determines in writing, based on compelling reasons and certification by the head of a contracting agency, that continued business dealings between that agency and the vendor are justified; and
(5) Notice to the debarred vendor of its rights to judicial or administrative review as provided in this article.
(x) If debarment is not imposed, the director shall promptly notify the vendor and any affiliates involved of the decision by certified mail, return receipt requested.
(y) A vendor or agent of a vendor who violates any provision of this section is guilty of a misdemeanor. In addition to any criminal penalties imposed, after a hearing the director may impose a civil penalty on a person, who, in connection with the certification of eligibility under this section:
(1) Made a false sworn statement; or
(2) Made an unsworn falsification with the intent to mislead a public servant in the performance of a duty.
(3) The amount of the civil penalty under subsection (y) of this section for an employer who falsely certifies that he or she is eligible to bid on contracts under this section is equal to the amount of the contract, not to exceed two hundred fifty thousand dollars for each false certification.
(z) A self reporting statement made in the form included in subdivision (1) of this subsection shall be submitted by any vendor prior to submission of a bid for any state public contract.
(1)
CERTIFICATION OF ELIGIBILITY

Invitation No.:

Project:

, being

(President or Authorized Official of Bidder)

duly sworn (or under penalty of perjury under the laws of the United States and the state of West Virginia), certifies that, except as noted below, (the company) or any person associated therewith in the capacity of (owner, partner, director, officer, principal investor, project director, manager, auditor or any position involving the administration of state funds): Is not currently under suspension, debarment, voluntary exclusion or determination of ineligibility under any federal or state statute; has not been suspended, debarred, voluntarily excluded or determined ineligible by any federal or state agency within the past three years; does not have a proposed debarment pending; and has not been indicted, convicted, or had a civil judgment rendered against (it) by a court of competent jurisdiction in any matter involving fraud or official misconduct within the past three years.
Exceptions will not necessarily result in denial of award, but will be considered in determining bidder responsibility. For any exception noted, indicate below to whom it applies, initiating agency and dates of action. Providing false information may result in criminal prosecution or administrative sanctions.
 ______________________ ____
Vendor Date

______________________
Vendor Number

President or Authorized Official

Title

The penalties for making false statements are prescribed in subsection (y), section eleven, article three, chapter five-a of this code.
Any bidder who submits a bid proposal to the purchasing division shall 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 purchasing division and the state auditor, such bids as to which there is such a deviation shall be rejected, if the deviation relates to the quantity, quality or specifications of the commodities, printing or services to be furnished or to the price therefor or to the date of delivery or performance. 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 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 may not be destroyed by either of them without the written consent of the legislative auditor: Provided, That the board of regents the governing board as defined in section two, article one, chapter eighteen-b of this code, may certify in writing to the director the need for a specific item essential to a particular usage either for instructional or research purposes at an institution of higher education and the director upon review of such certification may provide for the purchase of said specific items in the open market without competitive bids. If the director permits bids by facsimile transmission machine to be accepted in lieu of sealed bids pursuant to the provisions of section ten of this article, a duplicate facsimile transmission machine bid shall be transmitted to the state auditor pursuant to this section: Provided, however, That an original bid is received by the state auditor within two working days following the date specified for bid opening.


NOTE: The purpose of this bill is to provide procedures and guidelines concerning the debarment of vendors which contract to supply goods or services to the state.

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