Senate Bill No. 330

(By Senator Craigo)

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[Introduced February 13, 1995; referred to the Committee
on Education; and then to the Committee on Finance.]
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A BILL to amend and reenact sections four, five, six and seven, article five, chapter eighteen-b of the code of West Virginia, one thousand nine hundred thirty-one, as amended; and to further amend said article by adding thereto a new section, designated section eight, all relating to purchasing and bidding procedures for institutions of higher education.

Be it enacted by the Legislature of West Virginia:
That sections four, five, six and seven, article five, chapter eighteen-b of the code of West Virginia, one thousand nine hundred thirty-one, as amended, be amended and reenacted; and that said article be further amended by adding thereto a new section, designated section eight, all to read as follows:

ARTICLE 5. HIGHER EDUCATION BUDGETS AND EXPENDITURES.

§18B-5-4. Purchase or acquisition of materials, supplies, equipment and printing.

(a) Each governing board, through the senior administrator, shall purchase or acquire all materials, supplies, equipment and printing required for that board, and the state institutions of higher education under its jurisdiction. The governing boards shall adopt rules governing and controlling acquisitions and purchases in accordance with the provisions of this section. Such rules shall assure that the governing board: (1) Shall not preclude any person from participating and making sales thereof to the board except as otherwise provided in section five of this article; (2) shall establish and prescribe specifications, in all proper cases, for materials, supplies, equipment and printing to be purchased; (3) shall adopt and prescribe such purchase order, requisition or other forms as may be required; (4) shall negotiate for and make purchases and acquisitions in such quantities, at such times and under contract, in the open market or through other accepted methods of governmental purchasing as may be practicable in accordance with general law; (5) shall advertise for bids on all purchases exceeding five thousand dollars fifteen thousand dollars, to purchase by means of sealed bids and competitive bidding or to effect advantageous purchases through other accepted governmental methods and practices; and (6) shall post in a public place in the central office of the governing boards, in the purchasing office of the specific institution involved in the purchase and in the office of the department of purchases, available to the public during all business hours, notices of all acquisitions and purchases for which competitive bids are being solicited in the purchasing office of the specified institution involved in the purchase, at least two weeks prior to making such purchases and ensure that the notice is available to the public during business hours; (7) shall provide forThe governing boards shall further adopt rules relating to purchasing in the open market; pursuant to section thirteen, article three, chapter five-a of this code, and (8) shall further make provision for vendor notification of bid solicitation and emergency purchasing; and (9) provide that competitive bids shall not be required for purchases of one thousand dollars or less.
(b) When a purchase is to be made by bid, any or all bids may be rejected. However, all purchases based on advertised bid requests 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 governing boards and delivery terms: Provided, That the preference for resident vendors as provided in section forty-four thirty-seven, article three of said chapter five-a of this code shall apply to the competitive bids made pursuant to this section.
(c) The governing boards shall maintain a purchase file, which shall be a public record and open for public inspection. After the award of the order or contract, the governing boards shall indicate upon the successful bid that it was the successful bid, and shall further indicate why bids are rejected and, if the mathematical low vendor is not awarded the order or contract, the reason therefor. No records in the purchase file shall be destroyed without the written consent of the legislative auditor. Those files in which the original documentation has been held for at least one year and in which the original documents have been reproduced and archived on microfilm or other equivalent method of duplication may be destroyed without the written consent of the legislative auditor. All files, no matter the storage method, shall be open for inspection by the legislative auditor upon request.
(b) (d) The governing boards shall also adopt rules to prescribe qualifications to be met by any person who, on and after the effective date of this section, is to be employed as a buyer pursuant to this section. Such These rules shall provide require that no person shall be employed as a buyer unless such that person, 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. Any person making purchases and acquisitions pursuant to this section shall execute a bond in the penalty of fifty thousand dollars, payable to the state of West Virginia, with a corporate bonding or surety company authorized to do business in this state as surety thereon, in form prescribed by the attorney general and conditioned upon the faithful performance of all duties in accordance with sections four through seven eight of this article and the rules of the governing boards. In lieu of separate bonds for such buyers, a blanket surety bond may be obtained. Any such bond or bonds shall be filed with the secretary of state. The cost of any such bond or bonds shall be paid from funds appropriated to the applicable governing board.
(c) (e) All purchases and acquisitions shall be made in consideration and within limits of available appropriations and funds and in accordance with applicable provisions of article two, chapter five-a of this code, relating to expenditure schedules and quarterly allotments of funds and in accordance with section sixteen, article three of said chapter.
(f) The governing boards may make requisitions upon the auditor for a sum to be known as an advance allowance account, in no case to exceed five percent of the total of the appropriations for the board, and the auditor shall draw a warrant upon the treasurer for such accounts; and all such advance allowance accounts shall be accounted for by the applicable governing board once every thirty days or more often if required by the state auditor. Such authority shall not be delegated to any state institution under the control and supervision of the board.
(g) Contracts entered into pursuant to this section shall be signed by the applicable governing board in the name of the state and shall be approved as to form by the attorney general: Provided, That a contract or a change order for that contract which in total does not exceed fifteen thousand dollars and which use terms and conditions or standardized forms previously approved by the attorney general and do not make substantive changes in the terms and conditions of the contract does not require approval by the attorney general: Provided, however, That the attorney general shall make a list of those changes which he or she deems to be substantive and the list, and any changes thereto, shall be published in the state register. A contract that requires exceeds fifteen thousand dollars more than six months for its fulfillment shall be filed with the state auditor: Provided, That upon request, the governing boards shall make all contracts available for inspection by the state auditor. The governing board shall prescribe the amount of deposit or bond to be submitted with a bid or contract, if any, and the amount of deposit or bond to be given for the faithful performance of a contract. If the governing board purchases or contracts for materials, supplies, equipment and printing contrary to the provisions of sections four through seven of this article or the rules pursuant thereto, such purchase or contract shall be void and of no effect.
(h) Either governing board may request the director of purchases to make available, from time to time, the facilities and services of that department to the board in the purchase and acquisition of materials, supplies, equipment and printing, and the director of purchases shall cooperate with that governing board in all such purchases and acquisitions upon such request.
(i) Each governing board shall permit private institutions of higher education to join as purchasers on purchase contracts for materials, supplies and equipment entered into by that governing board. Any private school desiring to join as purchasers on such purchase contracts shall file with that governing board an affidavit signed by the president of the institution of higher education or a designee requesting that it be authorized to join as purchaser on purchase contracts of that governing board and agreeing that it will be bound by such terms and conditions as that governing board may prescribe, and that it will be responsible for payment directly to the vendor under each purchase contract.
(j) Notwithstanding any other provision of this code to the contrary, the governing boards may make purchases from the federal government or from federal government contracts if the materials, supplies, equipment or printing to be purchased is available from the federal government or from a federal contract and purchasing from the federal government or from a federal government contract would be the most financially advantageous manner of making the purchase.
(k) An independent audit of all purchasing functions and duties which are performed at any institution of higher education shall be performed each fiscal year. The respective governing board shall be responsible for selecting the audit firm and paying the cost of the audits from funds appropriated to the governing boards.
(l) The governing boards shall require each institution under their respective jurisdiction to notify and inform every vendor doing business with that institution of the provisions of section fifty-four, article three, section five-a of this code, also known as the "Prompt Pay Act of 1990."
§18B-5-5. Prequalification disclosure by vendors; register of vendors; exceptions; suspension of vendors.

(a) Every person, firm or corporation selling or offering to sell to the governing boards, upon competitive bids or otherwise, any materials, equipment, supplies or printing in excess of fifteen thousand dollars shall comply with all of the provisions of section fourteen-a twelve, article three, chapter five-a of this code and shall file with the director of the purchasing division of the state of West Virginia the affidavit required herein: Provided, That every such person, firm or corporation who is presently in compliance with said section shall not be required to requalify thereunder to be able to transact business with the governing boards.
(b) Any person, firm or corporation failing or refusing to comply with said statute as herein required shall be ineligible to sell or offer to sell commodities or printing to the governing boards as hereinafter set forth: Provided, That any person suspended under the provisions of section thirty-nine of said article three shall not be eligible to sell or offer to sell commodities or printing to the governing boards: Provided, however, That the governing boards shall have the power and authority to suspend, for a period not to exceed one year, the right and privilege of a person to bid on purchases of the governing boards when there is reason to believe that such person has violated any of the provisions in sections four through seven of this article or the rules of the governing boards pursuant thereto. Every person whose right to bid has been so suspended shall be notified thereof by a letter posted by registered mail containing the reason for such suspension and shall have the right to have the appropriate governing board's action reviewed in accordance with section forty, article three, chapter five-a of this code.
§18B-5-6. Other code provisions relating to purchasing not controlling; exceptions; criminal provisions and penalties; financial interest of governing boards, etc.; receiving anything of value from interested party and penalties therefor; application of bribery statute.

The provisions of article three, chapter five-a of this code shall not control or govern the purchase, acquisition or other disposition of any equipment, materials, supplies or printing by the governing boards, except as provided in sections four through seven of this article: Provided, That sections thirty-six, thirty-seven and thirty-eight twenty-nine, thirty and thirty-one, article three of said chapter five-a shall apply to all purchasing activities of the governing boards.
Neither the governing boards, nor any employee of the governing boards, shall be financially interested, or have any beneficial personal interest, directly or indirectly, in the purchase of any equipment, materials, supplies or printing, nor in any firm, partnership, corporation or association furnishing them. Neither the governing boards nor any employee of said boards shall accept or receive directly or indirectly from any person, firm or corporation, known by the governing boards or such employee to be interested in any bid, contract or purchase, by rebate, gift or otherwise, any money or other thing of value whatsoever, or any promise, obligation or contract for future reward, or compensation.
A person who violates any of the provisions of this section shall be guilty of a misdemeanor and, upon conviction thereof, shall be imprisoned in jail not less than three months nor more than one year, or fined not less than fifty nor more than one thousand dollars, or both imprisoned and fined, in the discretion of the court: Provided, That any person who violates any of such provisions by receiving money or other thing of value under circumstances constituting the crime of bribery under the provisions of section three, article five-a, chapter sixty-one of this code, shall, upon conviction of bribery, be punished as provided in section nine of said article five-a.
§18B-5-7. Disposition of obsolete and unusable equipment, surplus supplies and other unneeded materials; inventories.

The governing boards shall dispose of obsolete and unusable equipment, surplus supplies and other unneeded materials, either by transfer to other governmental agencies or institutions, by exchange or trade, or by sale as junk or otherwise. The governing boards shall adopt rules governing and controlling the disposition of all such equipment, supplies and materials. At least ten days prior to the disposition, the governing boards shall advertise, by newspaper publication as a Class II legal advertisement in compliance with the provisions of article three, chapter fifty-nine of this code, in the county in which the equipment, supplies and materials are located the availability or sales of such disposable equipment, supplies and materials and may sell same the disposable equipment, supplies and materials, in whole or in part, at public auction or by sealed bid, or may transfer, exchange or trade same to other governmental agencies or institutions (if by exchange or trade, then without advertising), in whole or in part, as sound business practices may warrant under existing circumstances and conditions. The governing boards shall inventory all such disposable equipment, supplies and materials from time to time as quantity and stocks may warrant, and shall make a complete annual inventory thereof as of the thirty-first day of March of each year. The governing boards may report such inventories to the director of purchases whose services and facilities shall be available to the governing boards in making advantageous disposition of any part or all of such disposable equipment, supplies and materials. Such inventories shall briefly describe the disposable items, the date of purchase thereof, the vendor to the applicable governing board, the purchase price paid therefor and the governing board's order number authorizing disposition thereof and shall indicate briefly the reason said items are no longer needed or can no longer be used by the governing board. All such inventories shall be kept as public records open to public inspection at one or more of the institutions under the jurisdiction of the governing boards for a period of five years and may thereafter be destroyed: Provided, That under no circumstances shall any of the property described in this section be sold, transferred or conveyed to any private person, firm or corporation other than by public auction or as provided in article eight, chapter five-a of this code.
§18B-5-8. Report card on West Virginia business.
The governing boards shall make an annual report to the finance committees of the House of Delegates and the Senate regarding the entities with which the governing boards contracted in the previous year. This report shall be submitted on or before the fifteenth day of January of each year and shall be cumulative in nature. The report shall include, but not be limited to, information regarding the number of out of state entities with which the governing board contracted, the number of in-state firms with which the governing board contracted, the dollar amount of each contract; the equipment, commodity or service for which the contract was let; the governing board's recommendations, if any, on the manner in which the purchasing procedures could be improved.



NOTE: The purpose of this bill is to change the purchasing and bidding procedures for institutions of higher education. It also increases the dollar amount of contracts that will be subject to the sealed bid process; eliminates the requirement that contracts or change orders for certain contract amounts be approved by the attorney general; and requires governing boards to have annual independent audits relating to all purchasing functions and duties. The bill also requires governing boards to make an annual report to the finance committees of the Senate and House of Delegates regarding contracts.

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

§18B-5-8 is new; therefore, strike-throughs and underscoring have been omitted.