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Introduced Version Senate Bill 182 History

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Key: Green = existing Code. Red = new code to be enacted
Senate Bill No. 182

(By Senators Tomblin, Mr. President, and Sprouse,

By Request of the Executive)

____________

[Introduced January 17, 2006; referred to the Committee

on Government Organization; and then to the Committee on Finance.]

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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 power and duties of the Director of the Purchasing Division; defining certain terms; providing for 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 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; and 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.
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