This section will address purchases of $10,000 or less which are processed by state spending units.

6.1 Definition of Authority: In accordance with the Legislative Rules and Regulations, state agencies may make purchases in the amount of $10,000 or less of certain commodities and services.

The $10,000 limit shall be determined based on any of the following conditions:

The twelve (12) month period begins with the effective date of the contract. Purchase orders and/or contracts which are renewed or extended for a period of one (1) year and meet one of the above conditions shall also be considered as having met the $10,000 limitation requirement.

Issuing a series of requisitions or purchase orders to circumvent competitive bidding or to defeat the State Purchasing Card transaction or delegated purchasing limit is strictly prohibited.

Most state agencies have a procurement officer who is responsible and knowledgeable in state purchasing guidelines as well as their own agency policies and procedures. It is important to note that questions from agency personnel relating to purchasing issues should be directed first to the respective agency procurement officer rather than directly to the Purchasing Division. If the agency procurement officer needs assistance, they are encouraged to contact the appropriate state buyer in the Acquisition and Contract Administration Section of the Purchasing Division for assistance in preparing specifications. (See Appendix C).

Agency personnel are encouraged to use West Virginia vendors for delegated purchases, when possible, while maintaining compliance with state purchasing guidelines.

6.1.1 Purchases $1,000 and Less: Competitive bids are not required, but are encouraged when possible. (Agencies are to use the State Purchasing Card for these purchases).

Agencies must first check mandatory contracts or internal resources, such as statewide contract or agency open-end contract exists for the commodity or service, or if Surplus Property, Correctional Industries or the West Virginia Association of Rehabilitation Facilities is able to supply the need.

6.1.1.1 Purchasing Card Program: The Purchasing Card Program allows state agencies to purchase materials and supplies totaling $1,000 or less per transaction including commodities and services on certain statewide contracts. This program also provides a more efficient, cost-effective method to purchase and pay for small purchases. For more information, please refer to the State Auditor’s Office Purchasing Card Program Policies and Procedures.

6.1.2 Purchases $1,000.01 to $5,000: A minimum of three (3) verbal bids are required when possible.

Bids shall be documented and recorded for public record. (See Appendix B for Verbal Bid Quotation Summary form, WV-49). An Agency Purchase Order, WV-88, or TEAM-Generated Purchase Order is required for purchases exceeding $1,000. Awards are to be made only to vendors who are properly registered with the Purchasing Division. Fax bids are acceptable.

Agencies must first review availability of mandatory contracts or internal sources, such as statewide contract or agency open-end contract exists for the commodity or service, or if Surplus Property, Correctional Industries or the West Virginia Association of Rehabilitation Facilities is able to supply the need.

6.1.3 Purchases $5,000.01 to $10,000: A minimum of three (3) written bids are required, when possible.

A Request for Quotations form, WV-43, or TEAM-Generated RFP/RFQ (See Appendix A) should be used for documenting and making these requests. In all cases, state agencies must attempt to obtain at least three (3) written bids for a product or service. A "no bid" is not considered a bid. An Agency Purchase Order or TEAM generated Purchase Order is required. Fax bids are acceptable.

Agencies must first review availability of mandatory contracts or internal sources, such as statewide contract or agency open-end contract exists for the commodity or service, or if Surplus Property, Correctional Industries or the West Virginia Association of Rehabilitation Facilities is able to supply the need.

6.2 The Bid Process: The agency delegated purchasing process requires certain steps to be taken to complete the purchasing cycle after the acquisition planning process. These steps are explained below:

6.2.1 Solicitation of Bids: In order to achieve the goal of competitive bidding, a minimum of three bids is required, when possible. For agency delegated purchasing (procurements $10,000 or less), care must be taken to solicit vendors capable of providing the necessary products or services.

Agency personnel are encouraged to use West Virginia vendors for delegated purchases.

6.2.1.1 Requests for Quotations: The Request for Quotation (RFQ) is used to acquire all tangible property (i.e., equipment, supplies, etc.). Exceptions to this requirement may be granted by the Purchasing Director.

An RFQ consists of:

(1) a detailed description of, or specification for, the item(s) being purchased;

(2) delivery date, if required;

(3) bid price per unit of the item(s);

(4) any applicable maintenance; and,

(5) quantities of all items.

Each item should be identified by a model number or some other specific identification. Prices cannot be altered after bids are opened.

6.2.2 Evaluation of Bids: Bids are received, opened and examined to ensure compliance with all specifications and determination of the lowest responsible bidder.

6.2.3 Award Process: After the evaluation of all bids, an award is made to the lowest responsible bidder who meets the specifications. Generally defined, a responsible bidder is able to furnish the required needs of the organization as requested in the specifications.

If an award is made to other than the lowest bidder, a detailed justification must be written and retained for public record and inspection. The justification must be signed by the evaluator(s) and retained as part of the bid file. A public record of all purchasing transactions must be kept on file at the agency location, and subject to inspection at the discretion of the Purchasing Division.

Prior to an award, a vendor must be in compliance with the following:

• Vendor registration process (must be registered and the fee paid, if applicable)

• In accordance with the West Virginia Code, §21A-2-6, Workers Compensation/BEP default account search (to verify vendor is not in default with workers compensation and employment compensation). Agency personnel may check online at Bureau of Employment Programs to ensure compliance. (See Appendix L for sample letter)

• No Debt Affidavit (required on all contracts over $5,000)

• Agreement Addendum [WV-96] (required when vendors submits alternate terms and condition with their bid) (See Appendix B)

6.2.3.1 Tie Bids: When purchasing commodities and services $10,000 or less, occasionally two or more bids of equal terms and amount are received in response to a solicitation, thus, resulting in a tie bid. If multiple awards are not made, the tie bid(s) must be resolved. The preferred method for resolving tie bids is the flip of a coin, draw of a card, or any other impartial method.

6.2.3.2 Errors in Bids: The Purchasing Division’s Legislative Rule guides the division in cases of errors in bids for purchases over $10,000. It is recommended that agencies follow these procedures when processing delegated purchases ($10,000 or less).

If an error is discovered by the agency or the Purchasing Division, the burden of proof and timely action for request of relief is the vendor’s responsibility. The request for relief must be made in writing by the vendor to the agency within five (5) working days from the bid opening date.

Erroneous bids may be rejected after the bid opening if all the following reasons are met:

(1) An error was made, and;

(2) The error materially affected the bid, and;

(3) Rejection of the bid would not cause a hardship on the state agency involved other than losing an opportunity to receive commodities and services at a reduced cost; and,

(4) Enforcement of the part of the bid in error would be unconscionable. In order to reject a bid, the public file must contain documented evidence that all of the above conditions exist.

The vendor must specifically identify the error(s), and provide documentation to substantiate the claim that the error(s) materially affected the bid and enforcement of the part of the bid in error would be unconscionable.

The unit price prevails if there is an error in the extension.

6.3 Receiving Procedures: Unexpected conditions may occur occasionally with vendors that cause delivered items to be different from those originally quoted and awarded. Materials must be opened and inspected within five (5) normal working days, otherwise the state agency may be subject to difficulty in obtaining an adjustment. Agencies must verify the shipment against the specifications in the purchase order.

Do not sign for any shortage. Insist on a correction of the packing slip and after all corrections have been made, request that the driver sign all shipping documents before leaving. Do not accept any alternate or substitution without Purchasing Division’s approval on commodities and services awarded by the Purchasing Division.

Several days before the promised delivery of a commodity, the agency should follow-up with the vendor to determine if the promised delivery date will be met. Concurrently, the needs of the end-user in the organization should be monitored to determine the difficulties that may occur if delivery is delayed. It should also be determined from the vendor, during the follow-up procedure, as to the method of shipment to be used - motor freight, parcel post or other carrier. The name of the carrier, expected date and time of delivery and pro-number on the bill of lading should be obtained prior to shipment from the vendor.

6.3.1 Inspection: In accordance with §5A-3-9 of the West Virginia Code, the Purchasing Director reserves the right to inspect the commodities delivered or services rendered to assure conformance with contractual requirements. The agency shall perform this inspection on all delivered commodities and services. Nonconformity is to be reported to the Purchasing Director and the chief officer of the spending unit purchasing such commodities for remedial action.

6.3.2 Proper Receiving Techniques: Any person receiving commodities is responsible for performing all of the inspection steps described below.

Receipt of Commodities and Services 

The state agency shall check the shipment to determine if commodities are in conformance with the purchase order or contract and verify the following:

Commodities:

The make, model number, brand name and general description of the item(s) delivered match the specifications on the purchase order.

The quantity received agrees with the purchase order quantity, packing list and bill of lading. An actual count is necessary to assure receipt of all items.

Services:

Labor services must match the frequency (daily, weekly, monthly, etc.) and duration (number of hours, days, etc.) described in the purchase order or contract (janitorial, security, etc.).

Service contracts that require the vendor to provide consultant reports, audit reports, statistics, or recommendations, must be as specified in the purchase order or contract.

Service contracts that require the vendor to perform a particular service, such as elevator maintenance, carpet cleaning, must have all tasks completed as described in the purchase order or contract.

Loss or Damage in Shipment: Filing of claims for loss or damage to merchandise in shipment is the responsibility of the party having title to merchandise during shipment. The title to the commodities is determined by the FOB point on the purchase order.

FOB Destination: Title remains with vendor until goods are received and accepted by the state agency.

FOB Shipping Point: Title passes to the state agency immediately when goods are given to a common carrier at the time of shipment. The state agency is responsible for any and all damages or losses while merchandise is in transit. If damages occur to merchandise in shipment, it is the state agency’s responsibility to file a claim.

Obvious Loss or Damage

FOB Destination: Note all losses or damages on receiving papers, sign and have driver sign. Write the word "Refused" on receiving papers. Do not accept merchandise with obvious damage from carrier under any circumstances.

FOB Shipping Point: Note all losses or damages on receiving papers, sign and have driver sign. Retain all merchandise in the condition in which it was received and notify both the carrier and seller in writing and by telephone within five (5) working days. The carrier will send a representative to investigate the claim.

Concealed Damage and Losses

FOB Destination: The damage or loss may become evident when uncrating. If this is the case, stop uncrating and retain all merchandise and crating in exactly the same condition in which it was received. Notify the vendor immediately in writing and by telephone. Do not use any of the merchandise and do not destroy any packaging material.

FOB Shipping Point: Follow the same procedure as in the above paragraph. The state agency must notify and file a claim with the carrier.

The Interstate Commerce Commission has promulgated rules to assure the prompt processing of such claims. Carriers must acknowledge claims within 30 days and settle, deny or offer a compromise settlement within one hundred and twenty (120) days. However, any claims as to damaged or lost merchandise must be promptly reported to parties concerned so action can be taken on any claims.

6.3.3 Freight Terminology: Freight or shipping terms should always be included in a contract which you have initiated with a particular vendor. Purchase orders should have a specified point of origin and destination plus carrier to be used. Misunderstanding of the freight terms may cause problems in the receiving end of the purchase. Below is a brief overview of the freight possibilities:

FREIGHT TERMINOLOGY TO BE USED
BY STATE PURCHASERS

F.O.B. Origin, Freight Prepaid

Seller pays freight charges
Seller bears freight charges
Buyer owns goods in transit
Buyer files any claims

F.O.B. Destination, Freight Collect

Buyer pays freight charges
Buyer bears freight charges
Seller owns goods in transit
Seller files any claims

F.O.B. Origin, Freight Collect

Buyer pays freight charges
Buyer bears freight charges
Buyer owns goods in transit
Buyer files any claims

F.O.B. Destination, Freight Prepaid

Seller pays freight charges
Seller bears freight charges*
Seller owns goods in transit
Seller files any claims

F.O.B. Origin, Freight Prepaid and Add

Seller pays freight charges
Buyer bears freight charges
Buyer owns goods in transit
Buyer files any claims

F.O.B. Destination, Freight Collect and Allowed

6.4 Payment Process: To promote good public relations and to avoid interest on late payments, state agencies should establish internal procedures to expedite payment of vendor's invoices. Please refer to the Payment Processing Guide issued by the State Auditor's Office (304-558-2261)for all questions regarding invoice processing.

6.4.1 Late Payments: Payments not made promptly may be subject to the Prompt Payment Act of 1990. Effective July 1, 1991, the Prompt Payment Act of 1990 entitles a vendor to interest on a legitimate uncontested invoice calculated from the sixty-first (61st) day after the invoice was received by the state agency until the date on which the state check is mailed to the vendor. This Act applies to invoices for commodities and/or services purchased after June 30, 1991.

The Act considers a legitimate uncontested invoice as one which covers commodities or services which have been delivered and accepted by the agency and that invoice is correct in all respects, as determined by the agency and approved by the State Auditor's Office. If the invoice is received prior to the acceptance of the commodities and/or services, the invoice will become legitimate and uncontested only when the agency accepts the commodities and/or services. In order for a vendor to receive payment for interest if entitled, the vendor must request this interest from the agency, in writing, with proof that the vendor received a check for payment of the invoice after the sixty (60) day time limit.

The State Auditor's Office will calculate and pay all amounts due under this Act by charging the appropriate account of the spending agency against line item code 082 - interest expense.

6.4.2 State Purchasing Card: Effective July 1, 1998, purchases of commodities and approved services which do not exceed the per transaction dollar limit may be paid by using the State Purchasing Card. (An increase to $2,500 will be considered on a selective basis in the near future.) The Purchasing Card Program was established to provide a more efficient, cost-effective method of purchasing and paying for small dollar purchases.

Use of the State Purchasing Card is not justification to avoid utilizing statewide or agency contracts, but is simply a method of payment. Agencies must use statewide contracts, unless specifically exempt by the Purchasing Director. For more information, refer to the State Auditor’s Office Purchasing Card Program Policies and Procedures.

6.4.3 Invoice Errors: Invoice unit prices may deviate from purchase order/contract unit prices and/or the extension of the unit price times quantity may be in error such that the total dollar amount of an invoice is greater or less than that specified by the purchase order/contract.

An invoice deviation greater than that specified by the purchase order/contract is acceptable provided it does not exceed the lesser of $5.00 or 5% of the total invoice amount.

When an invoice deviation exceeds the acceptable deviation limit, it is to be returned immediately to the vendor for correction.

"Final invoices" which result in a deviation of a dollar amount less than the total dollar amount specified by the purchase order/contract are acceptable and no change order is necessary. Final invoices are: [1] those which cover the remaining quantity(ies) of material(s) which fulfill(s) the exact total quantity(ies) specified on the purchase order/contract when prior partial shipments have been made, [2] those which cover the exact quantity of each item specified on the purchase order/contract and [3] those which cover a lump sum dollar amount supported by either a letter or notice on the invoice that states the invoice represents final payment for the purchase order/contract. Requisitions for Payment submitted in these cases should clearly by marked "Final Payment".

In those cases where partial shipments occur and multiple invoices are processed against a purchase order/contract, more than one (1) invoice could have an acceptable deviation, thus causing the total deviation on the purchase order/contract to exceed $5.00. In such cases, the "final invoice" processed (refer to [1] above) should be accompanied by a change order explaining the reason for the overrun as "Invoice Errors" and specifying the total number of invoices processed against the purchase order/contract and total dollar amount of the overrun.

6.5 Fixed Assets: Once payment has been made to the vendor and the "I" document number established, reportable property must be added to the WVFIMS Fixed Assets System.

6.6 Public Records: All records maintained at the agency level related to purchase orders and/or contracts are considered public records. The only exemptions to disclosure of information are listed in the West Virginia Code, §29B-1-4. Primarily, trade secrets as submitted by a vendor are the only exemption to public disclosure by the Purchasing Division. All bids, proposals, or offers submitted by vendors shall become public information and are available for inspection during normal business hours. All public information may be released with or without a Freedom of Information request.