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Introduced Version House Bill 4664 History

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hb4664 intr
H. B. 4664


(By Delegates White, Kominar, Boggs and Iaquinta)
[Introduced February 18, 2008; referred to the
Committee on Government Organization.]




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-3-37a and §5A-3-45 of said Code; all relating to the Purchasing Division of the Department of Administration;

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That §5A-3-27 and §5A-3-37 of the Code of West Virginia, 1931, as amended, be repealed; and that §5A-3-1, §5A-3-11, §5A-3-11a, §5A-3-37a and §5A-3-45 of said code be amended and reenacted, all to read as follows: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-3-37a. 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 proceeding 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 who received a preference at any time during the term of the project for which the preference was received 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.

NOTE: This bill clarifies the purpose of the Purchasing Division by omitting the reference to leasing; requires bids to be based on written specifications; permits director to effectively negotiate; repeals the requirement for the director to establish a central duplicating office; clarifies resident, veteran, small and minority vendor preferences; provides a preference for vendors which use products manufactured in West Virginia; and permits the state agency for surplus property to sell commodities to the general public at the posted price.

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