FISCAL NOTE

Date Requested: March 13, 2017
Time Requested: 12:50 PM
Agency: Administration, WV Department of
CBD Number: Version: Bill Number: Resolution Number:
2772 Introduced HB2936
CBD Subject: Finance and Administration


FUND(S):



Sources of Revenue:

General Fund,Special Fund

Legislation creates:

Neither Program nor Fund



Fiscal Note Summary


Effect this measure will have on costs and revenues of state government.


    REVISED
     The new language, as written, states that written bids are not required for purchases in the amount of $2,500 or less but must be purchased at the lowest price. This would lead to believe that bids or some research will need to be required for these small dollar purchases. Current language states competitive bids are not required. However, in purchasing training offerings, it is always noted that competitive bidding is always encouraged. Human resources which are not quantifiable will be expended to perform the research to determine the lowest price and to ensure that the retail market cost is not exceeded.
    
    The bill also repeals ยง5A-3-10e, the code authorizing Purchasing to utilize master contracts, also known as "secondary bidding." The state has not utilized master contracts since this authority was granted in section 10e. As written, the master contracting authority in section 10e is too restrictive to be useful. The repeal of this section has no effect on procurement mechanisms currently in place for state agencies.



Fiscal Note Detail


Effect of Proposal Fiscal Year
2017
Increase/Decrease
(use"-")
2018
Increase/Decrease
(use"-")
Fiscal Year
(Upon Full
Implementation)
1. Estmated Total Cost 0 0 0
Personal Services 0 0 0
Current Expenses 0 0 0
Repairs and Alterations 0 0 0
Assets 0 0 0
Other 0 0 0
2. Estimated Total Revenues 0 0 0


Explanation of above estimates (including long-range effect):


    The bill would have no effect on the Division of Purchasing, however, as noted above, soft costs may be incurred by all agencies in employee time other resources to "price check" nominal purchases. Human resources costs could easily exceed any cost savings from "price checking" these purchases. The current policy of the Purchasing Division is that agencies should be purchasing items at the lowest cost, but there is no statutory requirement to do so for purchases less than $2,500.



Memorandum


     It is not clear if the $2,500 limit in the bill applies to each individual order/purchase or if a purchase of the same item multiple times would result in exceeding the limit. For example, it is uncertain if an agency that purchases the same $500 item six different times in one month would be exempted from written bidding.



    Person submitting Fiscal Note: Jennelle H. Jones
    Email Address: jennelle.h.jones@wv.gov