WEST VIRGINIA PURCHASING DIVISION
POLICIES AND PROCEDURES HANDBOOK
2.0 DEFINITIONS, ABBREVIATIONS AND ACRONYMS
2.1 Scope: When using this handbook, it is important to begin by defining various terms that are used in the state procurement process and in other programs administered by the Purchasing Division. Below are several of these terms and their definitions:
Agency - For the purpose of this handbook, agency means any agency, department, authority, board, division, institution, or office of the state of West Virginia which is not statutorily exempt from the state purchasing procedures.
Agency Open-End Contract - A legal and binding instrument between the state agency and a vendor to exclusively provide a commodity which is competitively bid, evaluated, and awarded by the Purchasing Division and maintained by the state agency. This contract may be for unlimited dollars and for commodities or services that are frequently purchased that are not on a statewide contract.
Agency Delegated Open-End Contract - A legal and binding instrument between the state agency and a vendor to exclusively provide a commodity which was competitively bid, evaluated, awarded and maintained by the state agency. This contract is for purchases under $10,000 annually and for commodities and services that are frequently purchased that are not on a statewide contract.
Agency Delegated Purchase Order - A form (WV-88) which may be used by an agency to procure items within its delegated small purchase authority.
Agreement - A document used to acquire services from a vendor for a preset fee covering a specific period of time. Terms and conditions are outlined in this form. The WV-48 Agreement form is used for delegated purchases and, on certain occasions, for services over $10,000 in the absence of any other formal written contract.
Award Date - For purchases over $10,000, the award date is the date of encumbrance by the Purchasing Division.
Best Value Purchasing - Purchasing methods used in awarding a contract based on evaluating and comparing all established quality criteria where cost is not the sole determining factor in the award.
Bid - A competitive offer made by a seller.
Bid Bond - An insurance agreement in which a third party agrees to be liable to pay a certain amount of money in the event a selected bidder fails to accept the contract as bid. This bond is usually five (5) percent of the total bid amount.
Bid Opening - A firmly established date and time for the public opening of responses to a solicitation.
Buyer - An employee of the Purchasing Division whose primary assignment is purchasing commodities or services on behalf of the state.
Change Order - A document (WV-35) is used when it becomes necessary to amend, clarify, change or cancel purchasing documents issued by the Purchasing Division.
Commodity - Supplies, materials, equipment, contractual services and any other articles or things used by or furnished to a department, agency or institution of state government.
Competitive Bidding - The process by which individuals or firms compete for an opportunity to supply specified commodities and services by submitting an offer in response to a solicitation.
Contract - An agreement enforceable by law between two or more competent parties for a lawful purpose for consideration.
Design Build - In accordance with the West Virginia Code, §5-22A-1, this Best Value Purchasing tool is a concept within a single contract whereby the contractor is responsible to design and construct buildings or alterations to buildings.
Direct Purchase Order - A purchase made from a sole source vendor.
Emergency - A purchase made when unforeseen causes arise, including delays by contractors, delays in transportation and unanticipated volume of work. A report of any such purchase, together with a record of competitive bids upon which it was based, is to be submitted to the Purchasing Director. Emergency purchases are not used for hardship resulting from neglect, poor planning, or lack of organization by the spending unit.
Evaluation of Bids - After the bid opening, the process of examining all offers in order to determine the bidders responsibility, responsiveness to requirements, conformance to specifications, and other characteristics important to the recommendation or selection for award.
Expendable Commodities - Commodities which, when used in the ordinary course of business, will become consumed or of no market value.
Expression of Interest - A Best Value Purchasing tool used only in the selection of architects and engineers which permits the state to award a contract to the most qualified vendor at fair market value determined to be in the states best interest.
Fixed Assets - Reportable property with an acquisition cost of $1,000 or more and has a life of one year or more.
Freight Terminology - Terms used to specify the point of origin and destination, stating the responsible party for bearing freight charges and when title passes to another.
General Terms and Conditions - Standard clauses and requirements incorporated into all solicitations and resulting contracts which are derived from laws, or administrative procedures of the agency.
Grant - Money distributed to recipients, including state agencies and political subdivisions, in which no direct commodity or service is received by the granting agency.
Justification - A written explanation of an award which must be retained as a public record available for inspection, when not awarding to the lowest bidder.
Labor and Materials Payment Bond - A valid bond submitted by the apparent successful vendor upon request of the state to ensure payment of labor and materials purchased or contracted for on behalf of the state in a construction project.
Lease - A written agreement between the owner of equipment (lessor) and a state agency (lessee) by which the owner agrees to give the agency permission to use the equipment for a predetermined fee (rental) for a period exceeding 30 days. Title does not pass from the owner to the lessee.
Lease Purchase - A written agreement in which the lease payments are applied, in whole or in part, as installment payments for equity or ownership upon completion of the agreement. Title transfers with the last installment payment to the lessee.
Life Cost Cycle - A Best Value Purchasing tool that allows for the evaluation of the total or projected cost of a commodity over its life cycle, in addition to the initial purchase price, including operational expenses and other factors.
Liquidated Damages - A specified contract provision which entitles the state to demand a set monetary amount determined to be a fair and equitable repayment to the state for loss of service due to vendors failure to meet specific completion or due dates.
Litigation Bond - A valid bond submitted by the vendor with the bid which may be used by the state to recover damages due to frivolous and groundless law suits filed by the vendor.
Maintenance Bond - A valid bond provided as a warranty of normally two years, which is frequently used on roofing projects.
Mandatory Terms - All terms and conditions in the written specification which are absolute and preceded by shall, must, or will.
Negotiation - A bargaining process between two or more parties, each with its own viewpoints and objectives, seeking to reach a mutually satisfactory agreement on, or settlement of, a matter of common concern.
No Debt Affidavit - A form required to be completed by all vendors prior to the award of a contract. In accordance with 5A-3-10A of the West Virginia Code, no contract or renewal of any contract may be awarded to any vendor who is a debtor to the State of West Virginia in an aggregate amount of $5,000 or more.
Non-Mandatory Terms - All terms and conditions in the written specification which are preceded by may, should, or could are understood to be permissive.
Nonprofit Workshops - An establishment where manufacture or handiwork is carried on, 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 earning inures, or may lawfully inure, to the benefit of any private shareholder or individual. It 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 which shall be approved, as evidenced by a certificate of approval, by the State Board of Vocational Education, Division of Vocational Rehabilitation.
Notice to Proceed - A formal written communication most often used in construction contracts to establish the date for work to commence and determines the date for completion.
Open-End Contract - A generic term used for an instrument that is competitively bid and awarded in which all terms, conditions and prices are predetermined with the exception of quantity.
Performance Bond - An insurance agreement in which a valid surety agrees to be liable to pay a certain amount of money in the event a vendor fails to perform a contract as bid. This bond is usually for the full amount of the contract.
Piggybacking - Utilizing any existing agency open-end contract to which the requesting agency was not an original party. Piggybacking requires prior approval by the Purchasing Director.
Prebid Conference - A meeting between vendors and agency personnel which offers an opportunity to emphasize and clarify critical aspects of a solicitation, eliminates misunderstanding and permits vendor input. Vendor attendance may be mandatory or voluntary as specified in the bid document.
Prevailing Wages - Hourly labor and fringe benefit rates established annually by the West Virginia Division of Labor on a county by county basis which are required to be paid for all work involving various crafts and labor identified by the West Virginia Division of Labor in construction, renovation and improvement projects.
Printing - Services including printing, binding, ruling, lithographing, engraving and other similar services.
Protest - A formal, written complaint filed by a vendor regarding specifications or an award made with the intention of receiving a remedial result.
Purchase Order - A document issued by the Purchasing Division (WV-16) used to execute a purchase transaction with a vendor. It serves as notice to a vendor that an award has been made.
Purchasing Bulletin - A publication issued twice monthly by the Purchasing Division advertising purchases expected to exceed $10,000 for all agencies under the Purchasing Divisions jurisdiction.
Releases - A written agency order to the contractor authorizing quantities of commodities and/or services to be delivered all in accordance with the terms, conditions, and prices stipulated in the original contact.
Removable Property - Any personal property not permanently affixed to or forming a part of real estate.
Renewal -When an existing contract is renewed for an additional time period in accordance with the terms and conditions of the original contract.
Rental - Temporary compensation or fee paid for the use of any equipment usually for a period of less than 30 days.
Request for Information (RFI) - A document used to solicit information to assist in preparing specifications for a Request for Quotation (RFQ) or Request for Proposal (RFP). No award can be made from an RFI.
Request for Quotation (RFQ) - A document, containing the specifications or scope of work and all contractual terms and conditions, that is used to solicit written bids. Conformity to specifications and price are the only factors used in the evaluation process. The Purchasing Divisions RFQ form is an WV-17, with the agency (delegated purchasing) equivalent being a WV-43 form.
Request for Proposals (RFP) - A Best Value Purchasing tool used to acquire professional and other services where the scope of work may not be well defined and cost is not the sole factor in determining the award. All criteria by which the bidders will be evaluated must be contained within the bid document.
Requisition - A written or electronic request by an agency for the purchase of commodities and services.
Resident Vendor Preference (RVP) - A numerical preference used during the evaluation of bids when comparing in-state and out-of-state bidders.
Services - Work performed by a vendor that does not consist primarily of tangible commodities.
Ship To - The destination to which the commodity is to be delivered.
Spending Unit - A department, agency or institution of state government for which an appropriation is requested, or to which an appropriation is made by the Legislature.
Sole Source - The only vendor that can supply a needed commodity.
Solicitation - A written or oral attempt made by the state to obtain bids or proposals for the purpose of entering into a contract. Requests for Quotation (RFQ), Requests for Proposal (RFP), telephone calls, or other documents may be used.
Specifications - A detailed description of a commodity or service to be included in a solicitation or bid or an awarded contract.
Standard Exhibit - Standardized language developed and approved by the Purchasing Division and Attorney Generals Office which establishes contract clauses such as life of contract, price adjustment and ordering procedures.
Statewide Contract - A legal and binding instrument between the state and a vendor(s) which is used by all state agencies to purchase frequently used commodities and services. State agencies are required to use these contracts, which are competitively bid, awarded and maintained by the Purchasing Division.
Stringing - Issuing a series of requisitions or purchase orders to circumvent competitive bidding or to defeat the State Purchasing Card transaction or delegated purchasing limit.
Terms of Sale - Stipulations made within the contract regarding the transaction.
Tie Bid - When two or more bids of equal terms and amount are received in response to a solicitation.
Unit Price - The cost per unit of the commodity or service.
Vendor - An individual or business registered with the Purchasing Division who may provide commodities and services to state agencies.
TEAM (Team Effort for Acquisition Management)-The states automated purchasing system.
WVFIMS (West Virginia Financial Information Management System) - The states automated accounting system.
WVFIMS Documents - Documents generated within the West Virginia Financial Information Management System, including the following:
"I" document is the generated document when payment has been made;
"P" document is a WVFIMS purchase order cover sheet generated by the agency when a requisition is prepared and submitted to the Purchasing Division;
"X" document is a WVFIMS cover sheet generated at the agency level for changes to a "P" document.
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