Senate Bill No. 358

(By Senators Walters, Blair, Cole, D. Hall, Nohe, Palumbo, Snyder, Sypolt and Wells)

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[Introduced January 16, 2014; referred to the Committee on Government Organization.]

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A BILL to amend and reenact §5A-1-1 of the Code of West Virginia, 1931, as amended; and to amend and reenact §5A-3-4 of said code, all relating to the Purchasing Division; defining “change orders”; requiring the Director of the Purchasing Division to approve certain change orders; limiting the time in which change orders must be approved or denied by the director; limiting the time in which change orders must be approved or denied by the responsible agency; and requiring the director to report annually to the Legislature the total value of certain change orders.

Be it enacted by the Legislature of West Virginia:

    That §5A-1-1 of the Code of West Virginia, 1931, as amended, be amended and reenacted; and that §5A-3-4 of said code be amended and reenacted, all to read as follows:

ARTICLE 1. DEPARTMENT OF ADMINISTRATION.

§5A-1-1. Definitions.

    For the purpose of this chapter:

    (1) “Change order” means any written alteration in specifications, delivery point, rate of delivery, period of performance, price, quantity or other provisions of any contract.

    (1) (2) "Commodities" means supplies, material, equipment, contractual services, and any other articles or things used by or furnished to a department, agency or institution of state government.

    (2) (3) "Contractual services" means telephone, telegraph, electric light and power, water and similar services.

    (3) (4) "Debarment" means the exclusion of a vendor from the right to bid on contracts to sell goods or supply services to the state or its subdivisions for a specified period of time.

    (4) (5) "Director" means the director of the division referred to in the heading of the article in which the word appears.

    (5) (6) “Electronic” means electrical, digital, magnetic, optical, electromagnetic, or any other similar technology.

    (6) (7) “Electronic transmission” or “electronically transmitted” means any process of communication not directly involving the physical transfer of paper that is suitable for the retention, retrieval and reproduction of information by the recipient.

    (7) (8) "Expendable commodities" means those commodities which, when used in the ordinary course of business, will become consumed or of no market value within the period of one year or less.

    (8) (9) "Nonprofit workshops" means an establishment: (a) Where any manufacture or handiwork is carried on; (b) which is operated either by a public agency or by a cooperative or by a nonprofit private corporation or nonprofit association, in which no part of the net earnings thereof inures, or may lawfully inure, to the benefit of any private shareholder or individual; (c) which is operated for the primary purpose of providing remunerative employment to blind or severely disabled persons who cannot be absorbed into the competitive labor market; and (d) which shall be approved, as evidenced by a certificate of approval, by the state Board of Vocational Education, Division of Vocational Rehabilitation.

    (9) (10) "Printing" means printing, binding, ruling, lithographing, engraving and other similar services.

    (10) (11) “Record” means information that is inscribed on a read-only tangible medium or that is stored in an electronic or other medium and is retrievable in perceivable form.

    (11) (12) "Removable property" means any personal property not permanently affixed to or forming a part of real estate.

    (12) (13) “Request for quotations” means a solicitation for a bid where cost is the primary factor in determining the award.

    (13) (14) “Responsible bidder” means a vendor who has the capability to fully perform the contract requirements, and the integrity and reliability which will assure good faith performance.

    (14) (15) “Responsive bidder” means a vendor who has submitted a bid which conforms in all material respects to the bid solicitation.

    (15) (16) "Secretary" means the Secretary of Administration.

    (16) (17) "Spending officer" means the executive head of a spending unit, or a person designated by him or her.

    (17) (18) "Spending unit" means a department, agency or institution of the state government for which an appropriation is requested, or to which an appropriation is made by the Legislature.

    (18) (19) "The state and its subdivisions" means the State of West Virginia, every political subdivision thereof, every administrative entity that includes such a subdivision, all municipalities and all county boards of education.

    (19) (20) "Vendor" means any person or entity that is registered with the Purchasing Division to supply the state or its subdivisions with commodities or services and lessors of real property.

ARTICLE 3. PURCHASING DIVISION.

§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, defines emergencies and prescribe the manner in which such purchases shall be made and reported to the 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 procedures for Purchasing Division oversight of change orders, including, but not limited to:

    (A) Requiring that requesting agencies and vendors submit written justification to the director for the director’s written approval or denial of any change order or combination of change orders that would increase the total price of any state contract over $1 million by: Ii) Five percent or more of the total value of the original contract; or (ii) by $100,000 or more;

    (B) Requiring that the director approve or deny in writing any requested change order within five business days of Purchasing Division receipt of the request for state contracts over $1 million;

    (C) Prescribing that any agency responsible for approving change orders for state contracts under $1 million approve or deny in writing any requested change order within five business days of receipt of the request; and

    (D) Submitting annual reports to the Legislature of the value of, justification for, and vendor and agency associated with all change orders approved by the director for state contracts over $1 million;

    (11) (12) 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) (13) Prescribe procedures for selling surplus commodities to the highest bidder by means of an Internet auction site;

    (13) (14) Provide such other matters as may be necessary to give effect to the foregoing rules and the provisions of this article; and

    (14) (15) 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 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.

    NOTE: The purpose of this bill is to define change orders; to require the director of the Purchasing Division to approve certain change orders; to limit the time in which change orders must be approved or denied by the director; to limit the time in which change orders must be approved or denied by the responsible agency; and to require the director to report annually to the Legislature information about those change orders.

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