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, spending unit 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 was 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 $25,000 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.
Award Date - For purchases over $25,000, the award date is the date of encumbrance by the Purchasing Division.
Best Value Procurement - 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. This includes Request for Proposals (RFP), Life Cost Cycle (LCC), and Expression of Interest (EOI).
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 percent (5%) 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) which 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 (2) 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 Procurement tool is a concept within a single contract whereby the contractor is responsible to design and construct buildings or alterations to buildings.
Direct Purchase - A transaction in which a purchase is made from a sole source vendor.
Electronic - Electrical, digital, magnetic, optical, electromagnetic or any other similar technology.
Electronic Transmission – 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.
Emergency - A purchase made when unforeseen circumstances 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. Failure to plan does not make it an emergency situation.
Evaluation of Bids - After the bid opening, the process of examining all offers in order to determine the bidder’s 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 Procurement tool used only in the selection of architects and engineers which permits the state to award a contract to the most qualified vendor on the basis of demonstrated competence and qualification for the type of professional services required at a fee determined to be fair and reasonable.
Fixed Assets - Reportable property with an acquisition cost of $1,000 or more and has a life of one (1) 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 - A legal instrument reflecting a relationship between state government and a local government or other recipient, when competition is not possible, and whenever: (1) the principal purpose of the relationship is the transfer of money, property, services or anything of value to the local government or other recipient in order to accomplish a public purpose of support or stimulation authorized by federal or state statute rather than by acquisition, by purchase, lease or barter, of property or services for the direct benefit or use of the state government; and (2) no substantial involvement is anticipated between the executive agency acting for the state government and the local government or other recipient during the performance of the contemplated activity.
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 thirty (30) days. Title does not pass from the lessor 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 Procurement 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 vendor’s failure to meet specific completion or due dates.
Litigation Bond - A valid bond submitted by the vendor at the time of the bid which may be used by the state to recover damages due to frivolous and groundless law suits filed by the vendor in protest of an award, etc.
Maintenance Bond - A valid bond provided as a warranty of normally two (2) years, which is required on roofing projects.
Mandatory Terms - All terms and conditions in the written specification which are absolute and the compliance with cannot be waived. Failure to comply with mandatory terms shall require the vendor to be disqualified. Mandatory terms are indicated by the use of the terms shall, will, must, maximum, or minimum.
Negotiation - A bargaining process between two (2) 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.
Non-Mandatory Terms - All terms and conditions in the written specification which are not absolute. Non-mandatory terms are indicated by the use of the terms may, should, preferred or could, and are understood to be permissive and shall not be used to disqualify any vendor.
Nonprofit Workshops - An establishment where manufacture or handiwork is carried on, which is operated either by a public agency, a cooperative, 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 open-end contract of the federal government, agencies of other states, other public bodies or other state agencies to which the requesting agency was not an original party. Piggybacking requires prior approval by the Purchasing Director.
Pre-bid 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 Affidavit - A form required to be completed by all vendors prior to the award of a contract. In accordance with West Virginia Code, 5A-3-10A, 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 is a debtor and the debt owed is an amount greater than $1,000 in the aggregate.
Purchasing Bulletin – An electronic publication posted weekly by the Purchasing Division on its website advertising purchases expected to exceed $25,000 for all agencies under the Purchasing Division’s 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 contract. Releases may also be Equipment Contract Orders which are processed by the Purchasing Division against either statewide or open end contracts.
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 thirty (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 Division’s RFQ form is a WV-17, with the agency (delegated purchasing) equivalent being a WV-43 form.
Request for Proposals (RFP) - A Best Value Procurement 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, pursuant to West Virginia Code §5A-3-37.
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 or service.
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 General’s 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 (2) or more bids of equal terms and amount or score 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 state’s automated purchasing system.
WVFIMS (West Virginia Financial Information Management System) - The state’s 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 coversheet generated by the agency when a requisition is prepared and submitted to the Purchasing Division.
“X” document is a WVFIMS coversheet generated at the agency level for changes to a P- document.
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