Senate Bill No. 331

(By Senator Craigo)


[Introduced February 13, 1995; referred to the Committee
on Government Organization; and then to the Committee on Finance.]

A BILL to amend and reenact sections three, ten, twelve and thirteen, article three, chapter five-a 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 fifty-five, all relating to purchasing and bidding procedures for the state; requiring an independent audit of purchasing functions; requiring notice of the "Prompt Pay Act of 1990"; amending the items of information required to be disclosed by vendors; amending the attorney general's duties with respect to approval of contracts; and requiring a report card on state business.

Be it enacted by the Legislature of West Virginia:
That sections three, ten, twelve and thirteen, article three, chapter five-a 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 fifty-five, all to read as follows:

§5A-3-3. Powers and duties of director of purchasing.
The director, under the direction and supervision of the secretary, shall be the executive officer of the purchasing division and shall have the power and duty to:
(1) Direct the activities and employees of the purchasing division;
(2) Ensure that the purchase of or contract for commodities and printing shall be based, whenever possible, on competitive bid;
(3) Purchase or contract for, in the name of the state, the commodities and printing required by the spending units of the state government;
(4) Apply and enforce standard specifications established in accordance with section five of this article as hereinafter provided;
(5) Transfer to or between spending units or sell commodities that are surplus, obsolete or unused as hereinafter provided;
(6) Have charge of central storerooms for the supply of spending units;
(7) Establish and maintain a laboratory for the testing of commodities and make use of existing facilities in state institutions for that purpose as hereinafter provided;
(8) Suspend the right and privilege of a vendor to bid on state purchases when the director has evidence that such vendor has violated any of the provisions of the purchasing law or the rules and regulations of the director;
(9) Examine the provisions and terms of every contract 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 for commodities or services and approve each such contract as to such provisions and terms; and the duty of examination and approval herein set forth does not supersede the responsibility and duty of the attorney general to approve such contracts as to form: Provided, That the provisions of this subdivision do not apply in any respect whatever to construction or repair contracts entered into by the division of highways of the department of transportation: Provided, however, That the provisions of this subdivision do not apply in any respect whatever to contracts entered into by the university of West Virginia board of trustees or by the board of directors of the state college system, except to the extent that such boards request the facilities and services of the director under the provisions of this subdivision; and
(10) Assure that the specifications and commodity descriptions in all "requests for quotations" are prepared so as to permit all potential suppliers-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 brand or vendor. If the director determines that any such specifications or descriptions as written favor a particular brand or vendor or if it is decided, either before or after the bids are opened, that a commodity having different specifications or quality or in different quantity can be bought, the director may rewrite the "requests for quotations" and the matter shall be rebid;
(11) Require an annual audit of all functions and duties of the purchasing division by an independent auditor to ensure compliance with all provisions of this article; and
(12) Ensure that all vendors doing business with the state are informed and notified as to the provisions of section fifty-four of this article
§5A-3-10. Competitive bids; publication of solicitations for

sealed bids; purchase of products of nonprofit workshops; employee to assist in dealings with nonprofit workshops.

A purchase of and contract for commodities, printing and services shall be based, whenever possible, on competitive bids.
The director shall solicit sealed bids for the purchase of commodities and printing which is estimated to exceed ten thousand dollars fifteen thousand dollars. No spending unit shall issue a series of requisitions which would circumvent this ten thousand dollar fifteen thousand dollar maximum. The director may permit bids by facsimile transmission machine to be accepted in lieu of sealed bids: Provided, That an original bid is received within two working days following the date specified for bid opening. Bids shall be obtained by public notice. The notice may be published by any advertising medium the director deems advisable. The director may also solicit sealed bids by sending requests by mail to prospective suppliers and by posting notice on a bulletin board in his office: Provided, however, That the director shall, without competitive bidding, purchase commodities and printing produced and offered for sale by nonprofit workshops, as defined in section one, article one of this chapter, which are located in this state: Provided further, That such commodities and printing shall be of a fair market price and of like quality comparable to other commodities and printing otherwise available as determined by the director with the advice of the committee on the purchase of commodities and services from the handicapped.
Toward the end of effecting the making of contracts for commodities and printing of nonprofit workshops, the director shall employ a person whose responsibilities in addition to other duties shall be to identify all commodities and printing available for purchase from such nonprofit workshops, to evaluate the need of the state for such commodities and printing to coordinate the various nonprofit workshops in their production efforts and to make available to such workshops information about available opportunities within state government for purchase of commodities or printing which might be produced and sold by such workshops. Funds to employ such a person shall be included annually in the budget.
§5A-3-12. Prequalification disclosure and payment of annual fee
by vendors required; form and contents; register of vendors; false affidavits, etc.; penalties.

The director shall not accept any bid received from any vendor unless the vendor has paid the annual fee specified in section four of this article 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 shall knowingly file or cause to be filed with the director, an affidavit containing a false statement of a material fact or omitting any material fact, shall be guilty of a misdemeanor, and, upon conviction thereof, shall be fined not more than one thousand dollars, and, in the discretion of the court, confined in jail not more than one year. 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.
§5A-3-13. Contracts to be approved as to form; filing.

Contracts shall be approved as to form by the attorney general. A contract that requires more than six months for its fulfillment shall be filed with the state auditor. A contract or change order for that contract which in total do 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 to the contract, shall not require the approval of the attorney general: Provided, That the attorney general shall make a list of those changes which he or she deems to be substantive and the list, as will as any changes thereto, shall be published in the state register. A copy of each purchase order or contract issued by the purchasing division and any associated change orders shall be filed with the state auditor.
§5A-3-55. Report card on West Virginia business.
The purchasing director shall make an annual report to the finance committees of the Senate and House of Delegates regarding the entities with which the state contracted in the previous year. The purpose of the report is to allow the Legislature to monitor the progress West Virginia businesses are making in becoming more competitive in being awarded contracts with the state. The 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 state contracted, the number of in-state firms with which the state contracted, the dollar amount of each contract, the equipment, commodity or service for which the contract was let and the purchasing director's recommendations, if any, on the manner in which the purchasing procedures could be improved.

NOTE: This bill requires an annual audit of the purchasing division by an independent auditor; requires all vendors doing business in the state to be notified of the Prompt Pay Act of 1990; increases the amount of purchase required by sealed bids from $10,000.00 to $15,000.00; eliminates the disclosure of certain information by vendors; provides that contract or change orders that do not exceed $15,000.00 do not require the approval of the attorney general; and requires the purchasing director to make annual reports to the finance committees of the Senate and House of Delegates on contracts awarded with the state.

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

§5A-3-55 is new; therefore, strike-throughs and underscoring have been omitted.