H. B. 4031
(By Mr. Speaker, Mr. Kiss, and Delegate Trump)
[By Request of the Executive]
[Introduced January 17, 2006; referred to the
Committee on Government Organization then Finance.]
A BILL to amend and reenact §5A-1-1 of the Code of West Virginia,
1931, as amended; to amend and reenact §5A-3-4, §5A-3-10,
§5A-3-10a, §5A-3-11, §5A-3-19, §5A-3-33d and §5A-3-45 of said
code; and to amend said code by adding thereto seven new
sections, designated §5A-3-10b, §5A-3-10c, §5A-3-11a,
§5A-3-11b, §5A-3-11c, §5A-3-11d and §5A-3-11e, all relating to
the Purchasing Division of the Department of Administration;
providing for the power and duties of the Director of the
Purchasing Division; defining certain terms; providing for an
annual vendor fee; describing qualifications of state buyers;
providing requirements for competitive bids; authorizing
Director of the Purchasing Division to conduct compliance
reviews of spending units; providing for bids by electronic
transmission; providing for bid solicitation requirements;
prohibiting contract awards to debtors of state; providing for best value procurement; providing for sole source procurement;
providing requirements for open market purchases; providing
requirements for contract awards; providing requirements for
the delivery of bids to the Purchasing Division; providing for
special purchases; authorizing the Director of the Purchasing
Division to engage in competitive negotiations and discussions
with responsible bidders and to obtain best and final offers;
providing for contract awards to multiple vendors; authorizing
multiyear contracts; providing criteria for multiyear
contracts; authorizing the Director of the Purchasing Division
to participate in, sponsor, conduct or administer cooperative
purchasing agreements or consortia; providing grounds for
debarment of vendors; providing for disposition of surplus
state property by means of an Internet auction site.
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; that §5A-3-4, §5A-3-10, §5A-3-10a,
§5A-3-11, §5A-3-19, §5A-3-33d and §5A-3-45 of said code be amended
and reenacted; and that said code be amended by adding thereto
seven new sections, designated §5A-3-10b, §5A-3-10c, §5A-3-11a,
§5A-3-11b, §5A-3-11c, §5A-3-11d and §5A-3-11e, all to read as
follows:
ARTICLE 1. DEPARTMENT OF ADMINISTRATION.
§5A-1-1. Definitions.
For the purpose of this chapter:
"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.
"Contractual services" shall include telephone, telegraph,
electric light and power, water and similar services.
"Director" means the director of the division referred to in
the heading of the article in which the word appears.
"Electronic" means electrical, digital, magnetic, optical,
electromagnetic, or any other similar technology.
"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.
"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.
"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.
"Printing" means printing, binding, ruling, lithographing,
engraving and other similar services.
"Record" means information that is inscribed on a tangible
medium or that is stored in an electronic or other medium and is
retrievable in perceivable form.
"Removable property" means any personal property not
permanently affixed to or forming a part of real estate.
"Secretary" means the Secretary of Administration.
and, as
used in article two of this chapter, the director of the budget
"Spending officer" means the executive head of a spending
unit, or a person designated by him
or her.
"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.
ARTICLE 3. PURCHASING DIVISION.
§5A-3-4. Rules of director.
(a) The director shall adopt and amend rules
and regulations
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, define such emergencies and prescribe the manner in
which such purchases shall be made and reported to the director;
and for the purposes mentioned in subdivision (1) and this
subdivision (2), the head of any spending unit, or the financial
governing board of any institution, may, with the approval of the
director, 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 any such spending unit, and
the Auditor shall draw his
or her warrant upon the Treasurer for
such accounts; and all such advance allowance accounts shall be
accounted for by the head of the spending unit or institution once
every thirty days or oftener if required by the State Auditor or
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 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
forty-five dollars one hundred twenty-five dollars 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, and/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; and
(9) Provide for such other matters as may be necessary to give
effect to the foregoing rules
and regulations and the provisions of
this article.
(b) The director shall also adopt and amend rules
and
regulations to prescribe qualifications to be met by any person who
on and after the effective date
of the reenactment of this section
during the regular session of the Legislature of 2006 is to be employed in the Purchasing Division as a state buyer. Such rules
and regulations shall provide that no person
shall be may so
employed as a state buyer unless such person at the time of
employment either is: (1) A graduate of an accredited college or
university;
or and (2) has at least four years' experience in
purchasing for any unit of government or for any business,
commercial or industrial enterprise. Those persons now serving as
state buyers shall remain subject to the provisions of article six,
chapter twenty-nine of this code, and those persons employed as
state buyers on and after the effective date
of the reenactment of
this section
during the regular session of the Legislature of 2006
shall be subject to the provisions of said article six.
§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) A purchase of and contract for commodities, printing and
services shall be based, whenever possible, on competitive bids.
(b) The director shall solicit sealed bids for the purchase of
commodities and printing which is estimated to exceed
ten thousand
dollars twenty-five thousand dollars. No spending unit shall issue
a series of requisitions
which would circumvent this ten thousand
dollar maximum or divide or plan procurements to circumvent this
twenty-five thousand dollar threshold or otherwise avoid the use of sealed bids. Any spending unit which awards multiple contracts for
the same or similar commodity or service to an individual vendor
over any twelve-month period, the total value of which exceeds
twenty-five thousand dollars, shall file copies of all contracts
awarded to the vendor within the twelve preceding months with the
director, along with a statement explaining how the multiple
contract awards do not circumvent the twenty-five thousand dollar
threshold. The director may conduct a review of any spending unit
to ensure compliance with this subsection. Following such review,
the director shall complete a report summarizing his or her
findings and forward the report to the spending unit in question.
(c) The director may permit bids by
facsimile transmission
machine electronic transmission 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.
(d)Bids shall be
obtained solicited 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
or electronic transmission to prospective
suppliers and by posting notice on a bulletin board in his office
vendors.
(e) Provided, however, That The director shall, without
competitive bidding, purchase commodities and services 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 services shall be of a
fair market price and of like quality comparable to other
commodities and services 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 services of nonprofit workshops, the director shall
employ a person whose responsibilities in addition to other duties
shall be to identify all commodities and services available for
purchase from such nonprofit workshops, to evaluate the need of the
state for such commodities and services 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 services which might be produced and sold by such workshops.
Funds to employ such a person shall be included annually in the
budget.
§5A-3-10a. Prohibition for awarding contracts to vendors which
owe a debt to the state or its political
subdivisions.
(a) Unless the context clearly requires a different meaning,
for the purposes of this section, the terms:
(1) "Debt" means any assessment, premium, penalty, fine, tax or other amount of money owed to the state or any of its political
subdivisions because of a judgment, fine, permit violation, license
assessment,
defaulted workers' compensation premium amounts owed to
the workers' compensation old fund or uninsured fund, as defined in
article two-c of chapter twenty-three of this code, penalty or
other assessment
or surcharge presently delinquent or due and
required to be paid to the state or any of its political
subdivisions, including any interest or additional penalties
accrued thereon.
(2) "Debtor" means any individual, corporation, partnership,
association, limited liability company or any other form or
business association owing a debt to the state or any of its
political subdivisions.
(3) "Political subdivision" means any county commission;
municipality; county board of education; any instrumentality
established by a county or municipality; any separate corporation
or instrumentality established by one or more counties or
municipalities, as permitted by law; or any public body charged by
law with the performance of a government function and whose
jurisdiction is coextensive with one or more counties or
municipalities.
(4) "Related party" means a party, whether an individual,
corporation, partnership, association, limited liability company or
any other form or business association or other entity whatsoever, related to any vendor by blood, marriage, ownership or contract
through which the party has a relationship of ownership or other
interest with the vendor so that the party will actually or by
effect receive or control a portion of the benefit, profit or other
consideration from performance of a vendor contract with the party
receiving an amount that meets or exceeds five percent of the total
contract amount.
(b) No contract or renewal of any contract may be awarded by
the state or any of its political subdivisions to any vendor or
prospective vendor when the vendor or prospective vendor or a
related party to the vendor or prospective vendor is a debtor and
the debt owed is an amount greater than one thousand dollars in the
aggregate.
(c) The prohibition of this section does not apply where a
vendor has contested any tax administered pursuant to chapter
eleven of this code,
workers' compensation premium amount owed to
the workers' compensation old fund or uninsured fund, as defined in
article two-c of chapter twenty-three of this code, permit fee or
environmental fee or assessment and the matter has not become final
or where the vendor has entered into a payment plan or agreement
and the vendor is not in default of any of the provisions of such
plan or agreement.
(d) All bids, contract proposals or contracts with the state
or any of its political subdivisions submitted or approved under the provisions of this code shall include an affidavit that the
vendor, prospective vendor or a related party to the vendor or
prospective vendor does not owe any debt in an amount in excess of
one thousand dollars or, if a debt is owed, that the provisions of
subsection (c) of this section apply.
§5A-3-10b. Best value procurement.
(a) When the director determines in writing that the use of
competitive sealed best value bidding is advantageous to the state,
a contract may be entered into by competitive best value bidding.
(b) A solicitation for bids under competitive best value
bidding shall be made in the same manner as provided in section ten
of this article.
(c) Best value awards shall be based on criteria set forth in
the solicitation including, but not limited to, price, the total
cost of acquiring, operating, maintaining and supporting a
commodity or service over its projected lifetime, the evaluated
technical merit of the bidder's bid or proposal, the bidder's past
performance, and the evaluated probability of performing the
requirements stated in the solicitation on time, with high quality,
and in a manner that accomplishes the business objectives set forth
in the solicitation.
(d) The award must be made to the highest scoring responsive
and responsible bidder whose bid is determined, in writing, to be
most advantageous to the state, taking into consideration all evaluation factors set forth in the best value solicitation.
§5A-3-10c. Sole source procurement.
The director may award a contract without advertisement or
competition if he or she determines in writing that there is only
one source for the required commodity or service. The director may
require the submission of cost or pricing data in connection with
an award under this section. Prior to an award under this section,
the spending unit requesting the procurement shall provide written
documentation to the director setting forth the basis for the sole
source procurement and the specific efforts made to determine the
availability of other sources.
§5A-3-11. Purchasing in open market on competitive bids;
debarment; bids to be based on standard
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
ten thousand dollars 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.
(b) The director may authorize spending units to purchase
commodities, printing and services in the amount of
one thousand dollars two thousand five hundred dollars or less in the open
market without competitive bids
.
(c) Bids shall be based on the 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 articles to be
supplied, their conformity with specifications, their suitability
to the requirements of the government and the delivery terms:
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) All bidders submitting bid proposals to the purchasing
division are required to submit an extra or duplicate copy to the
state auditor.
(h)Both copies must be received at the respective offices
prior to the specified date and time of the bid openings. The
failure to deliver or the nonreceipt of these bid forms at either
of these offices prior to the appointed date and hour are grounds
for rejection of the bids. In the event of any deviation between
the copies submitted to the purchasing division and the state
auditor, the bids as to which there is a deviation shall be
rejected, if the deviation relates to the quantity, quality or
specifications of the commodities, printing or services to be
furnished or to the price therefor or to the date of delivery or
performance.
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.
(I) (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 and its copy in the office
of the state auditor that it was the successful bid. Thereafter,
the copy of each bid in the possession of the director and the
state auditor shall be maintained as a public record, by both of
them shall be open to public inspection in the offices office of
both the director and the state auditor and may not be destroyed by
either of them without the written consent of the Legislative
Auditor. Provided, That the governing board as defined in section
two, article one, chapter eighteen-b of this code, may certify in
writing to the director the need for a specific item essential to
a particular usage either for instructional or research purposes at
an institution of higher education and the director upon review of
such certification may provide for the purchase of said specific
items in the open market without competitive bids.
(j) If the director permits bids by facsimile transmission
machine to be accepted in lieu of sealed bids pursuant to the
provisions of section ten of this article, a duplicate facsimile
transmission machine bid shall be transmitted to the state auditor
pursuant to this section: Provided, That an original bid is
received by the state auditor within two working days following the
date specified for bid opening.
§
5A-3-11a. Special purchases.
(a) Notwithstanding any other provision of this article, the
director may with prior public notice initiate the purchase of
commodities or services where the director determines in writing
that an unusual or unique situation exists that makes the
application of all requirements of competitive sealed bidding,
competitive sealed proposals or competitive bidding contrary to the
public interest:
Provided
, That any award under this section shall
be made with such competition as is practicable under the
circumstances.
(b)Prior to an award under this section, the director shall
make a written determination setting forth the unusual or unique
circumstances justifying an award under this section and setting
forth the basis for the selection of the particular vendor. Such
documentation shall be included in the contract file.
(c) A report describing all awards made under this section
shall be provided annually to the Joint Committee on Government and
Finance.
§5A-3-11b. Negotiation when all bids exceed available funds.
(a) In the event that all bids submitted pursuant to either
section ten or section eleven of this article 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
subsections (b) or (c) of this section.
(b) Where there is more than one bidder, competitive
negotiations shall be conducted with up to three bidders determined
in writing to be the most responsive and responsible bidders, based
on criteria contained in the bid invitation: Provided, That the
director notifies each bidder of the intention to negotiate and
each qualifying bidder is given a reasonable opportunity to
negotiate.
(c) Where the director determines in writing that there is
only one responsive and responsible bidder, a noncompetitive
negotiated award may be made.
§5A-3-11c. Discussion and final offers.
As provided in the bid solicitation, the director may conduct
discussions with, and obtain best and final offers from,
responsible bidders who submit proposals determined to be
reasonably susceptible of being selected for award for the purpose
of clarification to assure full understanding of, and
responsiveness to, the solicitation requirements. Bidders must be
accorded fair and equal treatment with respect to any opportunity
for discussion and revision of proposals, and revisions may be
permitted after submissions and prior to award for the purpose of
obtaining best and final offers. In conducting discussions, there may be no disclosure of any information derived from proposals
submitted by competing bidders: Provided, however, That this
prohibition on the disclosure of information does not prohibit the
director from disclosing to competing bidders any preliminary
rankings and scores of competing bidders' proposals during the
course of any negotiations.
§5A-3-11d. Multiple awards.
The director may elect to award a contract to one or more
responsive and responsible bidders if the director determines in
writing that a single award to an individual bidder would be
insufficient: Provided, That the basis for the selection among
multiple contracts at the time of purchase shall be the most
practical and economical alternative and shall be in the best
interests of the state.
§
5A-3-11e. Multiyear contracts.
(a) Unless otherwise provided by law, a contract for
commodities or services may be entered into for any period of time
deemed to be in the best interests of the state:
Provided
, That
the term of the contract and conditions of renewal or extension, if
any, are included in the solicitation:
Provided however
, That
sufficient funds are available for the first fiscal year of the
contemplated contract at the time of contracting. Payment and
performance obligations for succeeding fiscal years shall be
subject to the availability and appropriation of funds therefor by
the Legislature.
(b) Prior to the utilization of a multiyear contract under this section, the director shall determine in writing that:
(1) The estimated requirements cover the term of the contract
and are reasonably firm and continuing; and
(2) Such a contract will serve the best interests of the state
by encouraging effective competition or otherwise promoting
economies in state purchasing.
(c) The original term of such multiyear contracts shall
terminate on the last day of the current fiscal year in which the
contract is executed, and any renewal based upon continuing
appropriation may not exceed the next fiscal year. When funds are
not appropriated or otherwise made available to support
continuation of performance in a subsequent fiscal year, the
contract shall be canceled.
§5A-3-19. Purchases from federal government and other sources.
Notwithstanding any other provision of this article, the
director may upon the recommendation of a state spending unit, make
purchases from the federal government, from federal government
contracts, or from the university of West Virginia board of
trustees or board of directors of the state college system
contracts, if available and financially advantageous participate
in, sponsor, conduct, or administer a cooperative purchasing
agreement or consortium for the purchase of commodities or services
with agencies of the federal government, agencies of other states,
other public bodies or other state agencies, if available and
financially advantageous. Nothing in this article shall prohibit
the payment of any administrative fee necessary to participate in such a cooperative purchasing agreement or consortium. At the
discretion of the director, bids may be solicited to determine
whether participation in such a cooperative purchasing agreement or
consortium is financially advantageous.
§5A-3-33d. Grounds for debarment.
Grounds for debarment are:
(1) Conviction of an offense involving fraud or a felony
offense in connection with obtaining or attempting to obtain a
public contract or subcontract;
(2) Conviction of any federal or state antitrust statute
relating to the submission of offers;
(3) Conviction of an offense involving embezzlement, theft,
forgery, bribery, falsification or destruction of records, making
false statements or receiving stolen property in connection with
the performance of a contract;
(4) Conviction of a felony offense demonstrating a lack of
business integrity or business honesty that affects the present
responsibility of the vendor or subcontractor;
(5) Default on obligations owed to the state, including, but
not limited to, obligations under the West Virginia workers'
compensation act owed to the workers' compensation old fund or
uninsured fund, as defined in article two-c of chapter twenty-three
of this code, and obligations under the West Virginia Unemployment
Compensation Act and West Virginia state tax and revenue laws. For
purposes of this subsection, a vendor is in default when, after due notice, the vendor fails to submit a required payment, interest
thereon or penalty, and has not entered into a repayment agreement
with the appropriate agency of the state or has entered into a
repayment agreement but does not remain in compliance with its
obligations under the repayment agreement. In the case of a vendor
granted protection by order of a federal bankruptcy court or a
vendor granted an exemption under any rule of the bureau of
employment programs or the workers' compensation Insurance
Commission, the director may waive debarment under section
thirty-three-f of this article: Provided, That in no event may
debarment be waived with respect to any vendor who has not paid all
current state obligations for at least the four most recent
calendar quarters, excluding the current calendar quarter, or with
respect to any vendor who is in default on a repayment agreement
with an agency of the state;
(6) The vendor is not in good standing with a licensing board,
in that the vendor is not licensed when licensure is required by
the law of this state, or the vendor has been found to be in
violation of an applicable licensing law after notice, opportunity
to be heard and other due process required by law; and
(7) Violation of the terms of a public contract or subcontract
for:
(A) Willful failure to substantially perform in accordance
with the terms of one or more public contracts;
(B) Performance in violation of standards established by law or generally accepted standards of the trade or profession
amounting to intentionally deficient or grossly negligent
performance on one or more public contracts;
(C) Use of substandard materials on one or more public
contracts or defects in construction in one or more public
construction projects amounting to intentionally deficient or
grossly negligent performance, even if discovery of the defect is
subsequent to acceptance of a construction project and expiration
of any warranty thereunder;
(D) A repeated pattern or practice of failure to perform so
serious and compelling as to justify debarment; or
(E) Any other cause of a serious and compelling nature
amounting to knowing and willful misconduct of the vendor that
demonstrates a wanton indifference to the interests of the public
and that caused, or that had a substantial likelihood of causing,
serious harm to the public.
§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; or
(6) Selling the commodities 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.
(7) Selling the commodities to the highest bidder by means of
an Internet auction site approved by the director.
(c) Upon the 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:
The purpose of this bill is to safeguard the resources
of the state and streamline the state purchasing process; increase
the annual vendor fee; raise the minimum amount for which the
director must solicit sealed bids from ten thousand dollars
($10,000) to twenty-five thousand dollars ($25,000); provide
controls to prevent contract "stringing"; provide for solicitation
by electronic transmission; provide for best value procurement; expressly provide for sole source procurement; raise the amount
under which spending units can purchase commodities and services
without competitive bids from one thousand dollars ($1,000) to two
thousand five hundred dollars ($2,500); eliminate the submission of
duplicate bids to the Purchasing Division and the State Auditor;
permit competitive negotiation where bids exceed available funds;
permit discussion and best and final offers; permit awards to
multiple vendors; permit the director to make special purchases
when justified by unusual or unique circumstances; establish
criteria for multiyear contracts; permit the state to participate
in a cooperative purchasing agreement or consortium; and to permit
the disposition of surplus property via Internet auctions.
Strike throughs indicate language that would be stricken from
the present law, and underscoring indicates new language that would
be added.
§5A-3-10b, §5A-3-10c, §5A-3-11a, §5A-3-11b, §5A-3-11c,
§5A-3-11d
and §5A-3-11e are new; therefore, underscoring and
strike-throughs have been omitted.