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Introduced Version House Bill 4350 History

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Key: Green = existing Code. Red = new code to be enacted
H. B. 4350


(By Delegate White)
[By Request of the Department of Administration]
[Introduced February 4, 2010; referred to the
Committee on Government Organization then Finance.]



A BILL to repeal §5A-3-14, §5A-3-21, §5A-3-22, §5A-3-23, §5A-3-24, §5A-3-25, §5A-3-26, §5A-3-37a, §5A-3-42, §5A-3-54, §5A-3-55 and §5A-3-55a of the Code of West Virginia, 1931, as amended; and to amend and reenact §5A-3-1, §5A-3-2, §5A-3-3, §5A-3-4, §5A-3-10, §5A-3-10b, §5A-3-11, §5A-3-11a, §5A-3-11c, §5A-3-12, §5A-3-15, §5A-3-18, §5A-3-19, §5A-3-35, §5A-3-36, §5A-3-37 and §5A-3-45 of said Code, all relating to the functions of the purchasing director, the procurement process, documentation of inventory and transportation of surplus property.

Be it enacted by the Legislature of West Virginia:
That §5A-3-14, §5A-3-21, §5A-3-22, §5A-3-23, §5A-3-24, §5A-3- 25, §5A-3-26, §5A-3-37a, §5A-3-42, §5A-3-54, §5A-3-55 and §5A-3-55a of the Code of West Virginia, 1931, as amended, be repealed; and that §5A-3-1, §5A-3-2, §5A-3-3, §5A-3-4, §5A-3-10, §5A-3-10b, §5A-3-11, §5A-3-11a, §5A-3-11c, §5A-3-12, §5A-3-15, §5A-3-18, §5A-3-19, §5A-3-35, §5A-3-36, §5A-3-37 and §5A-3-45 of the Code of said Code be amended and reenacted, all to read as follows:
ARTICLE 3. PURCHASING DIVISION.
§5A-3-1. Division created; purpose; director; applicability of article; continuation.

(a) The Purchasing Division of the Department of Administration is continued for the purpose of establishing centralized offices to provide purchasing, and travel services to the various state agencies. No person may be appointed director of the Purchasing Division unless that person is, at the time of appointment, a graduate of an accredited college or university and has spent a minimum of ten of the fifteen years immediately preceding his or her appointment employed in an executive capacity in purchasing for any unit of government or for any business, commercial or industrial enterprise. The provisions of this article apply to all of the spending units of state government, except as otherwise provided by this article or by law.
(b) The provisions of this article do not apply to the judicial branch and the legislative branch, unless otherwise provided or the Legislature or either house requests the director to render specific services under the provisions of the chapter nor to purchases of stock made by the Alcohol Beverage Control Commissioner, nor to purchases of textbooks for the State Board of Education.
§5A-3-2. Books and records of director.
The director shall keep in his offices accurate books, accounts and records of all transactions of his or her division, and such books, accounts and records shall be public records, and shall at all proper times be available for inspection by any taxpayer of the state.
§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 shall be based, whenever possible, on competitive bid;
(3) Purchasing 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, as the director deems advisable;
(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, as the director deems advisable;
(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 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.
§5A-3-4. Rules of director.
(a) The director shall propose rules for legislative approval in accordance with the provisions of article three, chapter twenty- nine-a of this code 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 more frequently 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 and type 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 $125 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 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, as determined by the director;
(9) Prescribe contract management procedures for all state contracts except government construction contracts including, but not limited to, those set forth in article twenty-two, chapter five of this code;
(10) Prescribe procedures by which oversight is provided to actively monitor spending unit purchases, including, but not limited to, all technology and software commodities and contractual services exceeding $1 million, approval of change orders and final acceptance by the spending units;
(11) Prescribe that each state contract entered into by the Purchasing Division contain provisions for the cancellation of the contract upon thirty days' notice to the vendor;
(12) Prescribe procedures for selling surplus commodities to the highest bidder by means of an Internet auction site; and
(13) Provide for such other matters as may be necessary to give effect to the foregoing rules and the provisions of this article; and
(14) Prescribe procedures for encumbering purchase orders to ensure that the proper account may be encumbered before sending purchase orders to vendors.
(b) The director shall propose rules for legislative approval in accordance with the provisions of article three, chapter twenty- nine-a of this code to prescribe qualifications to be met by any person who on and after the effective date of this section is to be employed in the Purchasing Division as a state buyer. The rules must provide that a person may not be employed as a state buyer unless he or she at the time of employment either is:
(1) A graduate of an accredited college or university; or
(2) Has at least four years' experience in purchasing for any unit of government or for any business, commercial or industrial enterprise.
Persons serving as state buyers are subject to the provisions of article six, chapter twenty-nine of this code.
§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 and 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 $25,000. No spending unit shall issue a series of requisitions or divide or plan procurements to circumvent this $25,000 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 $25,000, shall file copies of all contracts awarded to the vendor within the twelve preceding months with the director immediately upon exceeding the $25,000 limit, along with a statement explaining how the multiple contract awards do not circumvent the $25,000 threshold. If the spending unit does not immediately report to the director, the director may suspend the purchasing authority of the spending unit until the spending unit complies with the reporting requirement of this subsection. The director may conduct a review of any spending unit to ensure compliance with this subsection. Following a review, the director shall complete a report summarizing his or her findings and forward the report to the spending unit. In addition, the director shall report to the Joint Committee on Government and Finance on January 1 and July 1 of each year the spending units which have reported under this subsection and the findings of the director. The director shall not approve purchases made in violation of this section.
(c) The director may permit bids by electronic transmission to be accepted in lieu of sealed bids.
(d) Bids shall be 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 vendors.
(e) 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, That such 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.
To encourage contracts for commodities and services with nonprofit workshops, the director shall employ a person whose responsibilities in addition to other duties shall be are to identify all commodities and services available for purchase from nonprofit workshops, to evaluate the need of the state for 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-3-10b. Best value procurement.
(a) The director may utilize best value procurement to enter into a contract when he or she determines in writing that it is advantageous to the state.
(b) A solicitation for bids under best value procurement shall be made in the same manner as provided in section ten of this article.
(c) Best value procurement awards shall be based on criteria set forth in the solicitation including, but not limited to price. Additional considerations may include 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.
(e) The director may not use best value procurement to enter

into government construction contracts, including, but not limited to, those set forth in article twenty-two, chapter five of this code.
§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 $25,000 or less in amount in the open market, but the purchase shall, wherever possible, be based on at least three competitive bids, and shall include the cost of maintenance and expected life of the commodities if the director determines there are nationally accepted industry standards for the commodities being purchased.
(b) The director may authorize spending units to purchase commodities, printing and services in the amount of $2,500 or less in the open market without competitive bids: Provided, That the cost of maintenance and expected life of commodities must be taken into consideration if the director determines there are nationally accepted industry standards for the commodities being purchased.
(c) Bids shall be based on written specifications in the advertised bid request 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 of this 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 commodities or services to be supplied, their conformity with specifications, their suitability to the requirements of the government, the delivery terms and, if the director determines there are nationally accepted industry standards, cost of maintenance and the expected life of the commodities: 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) The bid must be received by the Purchasing Division prior to before 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 before the appointed date and hour shall result in the rejection of the bid. The vendor is solely responsible for the receipt of the bid by the Purchasing Division prior to before the appointed date and hour of the bid opening. All bids will be opened publicly by two or more persons from the Purchasing Division. Vendors will be given notice of the day, time and place of the public bid opening. Bids may be viewed immediately after being opened.
(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 that it was the successful bid. Thereafter, the copy of each bid in the possession of the director shall be maintained as a public record and shall be open to public inspection. in the office of the director and may not be destroyed without the written consent of the Legislative Auditor
§5A-3-11a. Negotiation when all bids exceed budget in requisition.
(a) Spending units shall include the maximum budgeted amount available for each purchase in a requisition submitted to the Purchasing Division. No person may disclose this maximum budgeted amount to any vendor prior to the award of a contract. If all bids submitted pursuant to a solicitation exceed the funds available for the purchase, then a negotiated award may be made as set forth in this section.
(1) If the director determines in writing that there is only one responsive and responsible bidder, he or she may negotiate the price authorize price negotiations for a noncompetitive award or the specifications for a noncompetitive award based solely on the original purpose of the solicitation.
(2) If the Purchasing Division solicits bids with a request for quotation and there is more than one bidder, the director may negotiate authorize negotiations with bidders determined in writing to be responsive and responsible, based on criteria contained in the bid invitation: Provided, That the director must negotiate first with the lowest bidder. If the director does not award the bid to the lowest bidder, he or she may close negotiations with that bidder and enter into negotiations with the next lowest bidder, and may continue to do so in like manner with the remaining responsive and responsible bidders. The director may not extend an offer to any bidder that is not first extended to the prior bidders in order of rank.
(3) If the Purchasing Division solicits bids utilizing a best value procurement, as set forth in section ten-b of this section article, and there is more than one bidder, the director may negotiate authorize negotiations with bidders determined in writing to be responsive and responsible, based on criteria contained in the bid invitation: Provided, That the director must negotiate first with the highest scoring bidder. If the director does not award the bid to the highest scoring bidder, he or she may close negotiations with that bidder and enter into negotiations with the next highest scoring bidder, and may continue to do so in like manner with the remaining responsive and responsible bidders. The director may not extend an offer to any bidder that is not first extended to the prior bidders in order of rank.
(b)After negotiations occur pursuant to subsection (a) of this section, if the director determines that more than fifteen percent of the value of the bid must be renegotiated by revising the specifications of the original solicitation, only a resolicitation may be initiated or the solicitation may be withdrawn.
(c) (b) The director may not renegotiate authorize renegotiations with any bidder after closing negotiations with the next bidder.
§5A-3-11c. 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 interest of the state.
§5A-3-12. Prequalification disclosure and payment of annual fee by vendors required; form and contents; register of vendors; false certificates; penalties.

(a) The director may 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 a certificate of the vendor or the affidavit certificate of a member of the vendor's firm or, if the vendor is a corporation, the affidavit certificate of an officer, director or managing agent of the corporation, disclosing the following information:
(1) If the vendor is an individual, his or her name and city and state of residence and business address, and, if he or she has associates or partners sharing in his business, their names and city and state of residence and business addresses;
(2) If the vendor is a firm, the name and city and state of residence and business 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 city and state of residence and business addresses of the president, vice president, secretary, treasurer and general manager, if any, of the corporation; and the names and city and state of residence and business 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 the representation shall be attached to the affidavit certificate or whether the vendor is doing business as another entity;
(5) The vendor's latest Dun & Bradstreet number and rating, if there is any rating as to the vendor; and
(6) A list of one or more banking institutions, if such institution is available, to serve as references for the vendor; and
(7) The vendor's tax identification number.

(b) Whenever a change occurs in the information submitted as required, the change shall be reported immediately in the same manner as required in the original disclosure affidavit certificate.
(c) The affidavit certificate and information received by the director shall be kept in a register of vendors which shall be made a public record. and open to public inspection during regular business hours in the director's office and made readily available to the public
(d) 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.
(e) Any person who makes an affidavit falsely submits a false certificate or who knowingly files or causes to be filed with the director, an affidavit a certificate containing a false statement of a material fact or omitting any material fact, is guilty of a misdemeanor and, upon conviction, shall be fined not more than $1,000, and, in the discretion of the court, confined in jail not more than one year. An individual convicted of a misdemeanor under this subsection may never hold an office of honor, trust or profit in this state, or serve as a juror.
§5A-3-15. Emergency purchases in open market.
The director may authorize in writing a state spending unit to purchase in the open market, without filing requisition or estimate, specific commodities for immediate delivery to meet bona fide emergencies arising from unforeseen causes, including delays by contractors, delays in transportation and unanticipated volume of work. A report of any such purchase, together with a record of the competitive bids upon which it was based, shall be submitted at once to the director by the head of the state spending unit concerned, together with a full account of the circumstances of the emergency: Provided, That the director may waive the need for the record of competitive bids. Such report shall be entered on a record and shall be open to public inspection.
§5A-3-18. Substituting for commodity bearing particular trade name or brand.

If a spending unit requests the purchase of a commodity bearing a particular trade name or brand, and if the commodity is covered by standard specifications adopted as provided by section five of this article the director may substitute a commodity bearing a different trade name or brand, if the substituted commodity reasonably conforms to the adopted standard specifications and can be obtained at an equal or lower price.
§5A-3-19. Purchases from federal government and other sources.
(a) Notwithstanding any other provision of this article, the director may upon the recommendation of a state spending unit, 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. 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.
(b) The Department of Administration may approve administrative fees, not to exceed the amount of $50,000, necessary to participate in a cooperative purchasing agreement. Fees which exceed $50,000 are subject to the competitive bid requirements of this article.
§5A-3-35. Submission of annual inventories.
The head of every spending unit of state government shall, on or before July 15 of each year, file with the director an inventory or certify the accuracy of the inventory of all real and personal property, and of all equipment, supplies and commodities in its possession as of the close of the last fiscal year, as directed by the director.
§5A-3-36. Inventory of removable property.
The director shall have has the power and duty to (1) make and keep current an inventory of all removable property belonging to the state. Such inventory shall be kept on file in the office of the director as a public record. The inventory shall disclose the name and address of the vendor, the date of purchase, the price paid for the property therein described and the disposition thereof.
(2) Provide for the maintenance and repair of all office furniture, machinery and equipment belonging to the state, either by employing personnel and facilities under his director or by contract with state agencies or private parties.
§5A-3-37. Preference for resident vendors; preference for veteran residents; exceptions.

(a) In any instance where a purchase of commodities or printing by the director or by a state spending unit is required under the provisions of this article to be made upon competitive bids, preference shall be given to vendors resident in West Virginia as against vendors resident in any other state. If the resident vendor's bid does not exceed the lowest qualified bid from a nonresident vendor by more than six percent of the latter bid, and if the vendor has made written claim for the preference at the time the bid was submitted, the award shall be made to the resident vendor. This preference is only applicable to the cost portion of a vendor's bid submission.
(b) A resident vendor preference of six percent is available to a vendor successfully certifying that the vendor:
(1) Is registered to transact business within the State of West Virginia in accordance with article twelve, chapter eleven of this code;
(2)Maintains its headquarters or principal place of business within the state;
(3) Has paid personal property taxes pursuant to article five, chapter eleven of this code on equipment used in the regular course of supplying services of the general type offered; and
(4) Has actually paid, and not just applied to pay, all required business taxes imposed by chapter eleven of this code.
In addition, in the case of a vendor selling tangible personal property, a resident vendor is one who has a stock of materials held in West Virginia for sale in the ordinary course of business, which stock is of the general type offered, and which is reasonably sufficient in quantity to meet the ordinary requirements of customers.
(c) In addition to the six percent preference provided in subsection (b) of this section, resident vendors who qualify for the six percent preference are entitled to an additional two percent upon proof that:
(1) The vendor is a veteran of the United States Armed Forces, the reserves or the National Guard; or
(2) The vendor uses products manufactured in West Virginia, and such products comprise at least fifty percent of the products offered in the bid and utilized to fulfill the contract.
(d) No resident vendor shall receive more than an eight percent preference unless that vendor is competing against a nonresident vendor from a state that offers a preference in excess of the percentage offered by this section.
(e) If any of the requirements or provisions set forth in this section jeopardize the receipt of federal funds, then the requirement or provisions are void and of no force and effect for that specific project.
(f) If any provision or clause of this section or application thereof to any person or circumstance is held invalid, the invalidity shall not affect other provisions or applications of this section which can be given effect without the invalid provision or application, and to this end the provisions of this section are severable.
§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. State agencies are responsible for the cost of transportation of surplus property to the state agency for surplus property or other location.
(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 section (g) of this section;
(5) Properly disposing of the commodities as waste;
(6) Selling the commodities to the general public at the posted price or 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; or
(7) Selling the commodities to the highest bidder by means of an Internet auction site approved by the director as set forth in an emergency rule pursuant to the provisions of chapter twenty-nine- a of this code.
(c) Upon the sale to the general public or 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 before 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 of 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 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 before authorizing the disposal and those circumstances when the inspection is not necessary prior to before 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 amend the various functions of the Purchasing Division director, the requirements of the procurement process, the documentation of state inventory, and the transportation of state surplus property.


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