PROCEDURES HANDBOOK |
5.0 AGENCY DELEGATED ACQUISITION
PROCEDURES:
5.1 Definition of Authority:
In accordance with the
West Virginia Code of State Rules,
the Purchasing Division has delegated the ability to process procurements of
$25,000 or less to state agencies.
This means that state agencies may make purchases of commodities or services in
the amount of $25,000 or less without processing a formal
Requisition through the
Purchasing Division. The delegated authority is further stratified into three
categories of procurement discussed in more detail in
Section 5.1.1 below.
It is expected that procurements made under delegated authority
will mirror, to the greatest extent possible, formal procurement procedures. It
is further expected that the forms used in the bidding process will be the most
recent version approved by the Purchasing Division, which are available on the
Purchasing Division’s Internet and intranet sites.
Amounts spent with vendors are viewed comprehensively. State
agencies should continuously monitor their expenditures with vendors to ensure
that the total amount spent with a given vendor, within any 12-month period,
does not exceed an applicable bid threshold without the proper level of
documentation and bidding.
No agency shall issue a series of requisitions to circumvent the
$25,000 threshold. Violation of the $25,000 threshold is commonly referred to as
“stringing,” and is prohibited by law.
Instances of stringing must be reported to the Legislature.
As an example, an agency will have exceeded the $25,000 limit in
each of the following scenarios:
1. Agency makes a one-time payment of $25,000.01 or more to a
single vendor within a twelve (12) month period.
2. Agency makes multiple payments to a single vendor that aggregate
to $25,000.01 or more within a twelve (12) month period.
3. Agency makes multiple payments to multiple vendors for the same
commodity or service that aggregate to $25,000.01 or more within a 12-month
period.
4. Agency makes monthly lease payments of $2,083.34 or more for
twelve (12) consecutive months.
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 (1) of the above conditions shall also be
considered as having met the $25,000 limitation requirement.
State agencies are encouraged to use the
State Purchasing Card as a payment method for purchases, whenever possible, in
accordance with State Purchasing Card guidelines.
If an agency fails to comply with the procedures and requirements
established for purchases of $25,000 or less, the Purchasing Director has the
ability to:
•
Suspend or reduce purchasing authority for that spending unit;
• Require
the spending unit to provide additional reports and documentation relating to
purchases of $25,000 or less for Purchasing Division review;
• Require
the agency to submit to additional oversight that the Purchasing Director deems
appropriate; or,
• Require
that agency personnel responsible for purchases of $25,000 or less participate
in remedial training provided by the Purchasing Division.
Most state agencies have a procurement officer who is responsible
and knowledgeable in state purchasing guidelines as well as their own agency
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).
Prior to
seeking competitive bids, agencies must first check the following mandatory
contracts or internal resources: statewide contract or agency open-end contract
existing for the commodity or service, Surplus Property, Correctional Industries
and the West Virginia Association of Rehabilitation Facilities. If the
product/service is available from one of these sources but that source is not
able to supply the product/service, a waiver must be obtained and retained with
the purchase order file for each transaction to which the waiver applies.
A vendor preference is required for agency delegated purchases. For more details
regarding this preference, please see
Section 6.3.
5.1.1 Purchases $2,500 and Less:
Competitive bids are not required, but are encouraged when
possible.
5.1.2 Purchases $2,500.01 to $5,000:
A minimum of three (3) verbal bids are required,
when possible,
and the lowest bid meeting specifications must be awarded the purchase
order/contract. All bids must be present in the file.
Bids shall be documented and recorded for public record. (See
Appendix B for Verbal Bid Quotation Summary,
WV-49). A
wvOASIS procurement award document is required for purchases exceeding
$2,500. Awards are to be made only to vendors who are properly registered with
the Purchasing Division. Signed fax bids or electronic bids are acceptable.
Screen
prints from Internet sites are not acceptable as a valid bid.
A “no bid” is not considered a bid.
5.1.3 Purchases $5,000.01 to $25,000:
A
minimum of three (3) written bids are required, when possible, and the lowest bid meeting specification must be awarded the purchase
order/contract. All bids must be present in the file.
An
Agency Request for Quotation 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. The date and time of the bid opening shall be published on the
Request for Quotation.
A
wvOASIS procurement award document is required. Signed fax bids or electronic bids
are acceptable. Screen prints from Internet sites are not acceptable
as a valid bid.
A vendor choosing to submit a bid or a written change to a bid by
electronic transmission accepts full responsibility for transmission and receipt
of the bid or written change to a bid. The state accepts no responsibility for
the unsuccessful and/or incomplete transmission of bids by electronic
transmission.
5.2 The Bid Process:
The agency delegated
purchasing process requires that the agency take certain steps to complete the
purchasing cycle after the acquisition planning process. These steps are
explained below:
5.2.1 Solicitation of
Bids:
In order to achieve the goal of competitive bidding, a minimum of three (3) bids
is required, when possible. For agency delegated purchasing (procurements
$25,000 or less), care must be taken to solicit vendors capable of providing the
necessary products or services.
For
procedures relating to technology purchases, visit
Section 3: Acquisition Planning, 3.6.1.4
Technology.
5.2.1.1 Requests for
Quotations:
The Request for Quotation (RFQ) should be used to acquire all tangible property
(i.e. equipment, supplies, etc.). The RFQ is required for all purchases between
$5,000.01 and $25,000. 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. The RFQ must have an established date and time for the bid opening, after which bids will no longer be accepted. All bids should be stamped with the date and time of receipt.
5.2.2 Evaluation of Bids:
Bids are received, opened and examined by the agency to ensure compliance with
all specifications and determination of the lowest responsible bidder. Bids
shall be sealed until the date and time set for the bid opening, which shall be
open to the public.
Agencies
are responsible for making bids immediately available to the public.
While bidder information and amount bid are available for public inspection at this time, agency personnel should not discuss award scenarios with the public during the evaluation period. The complete contract file is considered public record and is available to the public after the award of the contract. For guidance relating to the release of contract information, please refer to Section 1.7.
5.2.2.1 Additive / Alternative Options (Add-on or Deduct):
In construction contracts,
there are projects for which alternative options may be requested of the
participating bidders.
Pursuant
to
West Virginia Code §5-22-1(e), if the pricing pages contain
alternates/add-ons, there must be no more than seven listed, and the
alternates/add-ons will be selected in the order of priority listed on the
pricing pages.
The
first alternate/add-on must be selected before the second alternate/add-on can
be selected and so on. Provided,
that the agency may accept an alternate out of the listed order if acceptance
would not affect determination of the lowest qualified responsible bidder. Any
unaccepted alternate contained within a bid shall expire 150 days after the date
of the opening of bids for review.
5.2.3 Award Process:
After the evaluation of all bids by the agency personnel, an award is made to
the lowest responsible bidder who meets the specifications.
If an award is made to other than the lowest bidder, a detailed justification as to why the lowest bidder was not awarded the contract 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.
All contracts
should be entered into for a firm, fixed price per unit of goods or service. In
such cases where the nature of the procurement prohibits a firm, fixed price, a
detailed written justification must be included in the file.
Purchases made under Agency Delegated authority are processed at
the agency level. Therefore, requisitions, purchase orders or other
documentation should be retained by the agency and not forwarded to the
Purchasing Division. 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. This file
must contain any verification checks not automatically performed in wvOASIS; Certificate
of Non-Conflict of Interest; specifications used for the bidding process, and
any and all attempts to obtain competitive bids.
Prior to an award, a vendor must be in compliance with the
following
requirements and, if applicable, the agency shall
retain documentation verifying compliance in the file:
·
Vendor registration process (must be registered and the fee paid,
if applicable).
The registration
process includes having the proper disclosure of information in the
wvOASIS vendor/customer account, such
as the Owner/Officer Information and Banking Information listed under the
“Disclosures” tab. It is also recommended
that the Finance Division have a current W-9 on file for the vendor.
This is indicated under the “Hold Payment” portion of the “Disbursement
Options” tab of the wvOASIS
vendor/customer account;
·
In accordance with the West Virginia Code §21A-2-6,
verification of current unemployment fee status and Workers’ Compensation
coverage is required to ensure the vendor is not in default with Workers’
Compensation and Employment Compensation.
wvOASIS automatically verifies compliance
prior to award,
· Verification that the vendor is not debarred by the federal government. wvOASIS automatically verifies this federal compliance prior to award. Additionally, the Purchasing Division maintains a list of vendors declared as debarred by the state of West Virginia, which may be accessed at: www.state.wv.us/admin/purchase/Debar.html. Agencies must verify this compliance prior to award;
· In accordance with the Code of State Rules 148 CSR 6.1.e, the vendor must be licensed and in good standing with any and all state and local law and requirements, including proper registration and good standing with the Secretary of State’s office and the State Tax Department, regardless of payment method, To search for a business or corporation with the Secretary of State’s office, visit http://apps.sos.wv.gov/business/corporations. Agencies must verify this compliance prior to award;
· Purchasing Affidavit (required on all contracts exceeding $5,000); and,
·
Agreement Addendum
(WV-96) (required when vendors submit alternate terms and condition with
their bid) (See
Appendix B)
5.2.3.1 Tie Bids:
When purchasing commodities and services of $25,000 or less, occasionally two
(2) 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.
When tie bids are received,
the Purchasing Director shall break the tie by allowing the tied vendors to make
a final offer, flip of a coin, draw of the cards, or any other impartial method
considered prudent by the Director. A
witness must be present when resolving the tie and documentation of the method
and results, with signatures of all witnesses, must also be included in the
file. Vendors affected by the tie should be notified and given an opportunity to
attend the tie breaker.
5.2.3.2 Errors in Bids:
The Purchasing Division’s
West Virginia
Code of State Rules guides the division in cases of errors
in bids for purchases over $25,000. It is recommended that agencies follow these
procedures when processing delegated purchases ($25,000 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 and should be received by 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;
(2) The error materially affected the bid;
(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.
5.3 Receiving Procedures:
In accordance with the West Virginia State Auditor’s receiving
report requirements (West
Virginia Code
of State Rules, §155-1-4),
materials must be opened and inspected within 24 hours of receipt, 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 and
retain a copy of the receiving report prepared for the Auditor’s office with the
purchasing file. For receipt of services, a receiving report similar in form to
that required by the Auditor’s office shall be completed, signed and retained
with the purchasing file.
In cases where receiving reports are retained by another office of
the spending unit and the volume of receiving reports would create a storage
problem, spending units may include a memorandum to file in the purchasing file
indicating the storage location of the receiving reports. The actual reports
shall be produced on demand, in accordance with the
West Virginia Code of State Rules,
§148-1-4.14.
Agencies must verify quantities received. [If quantities do not
match the purchase order, insist on a correction of the packing slip. 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 of 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.
5.3.1 Inspection: In accordance with West Virginia Code §5A-3-9, 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.
5.3.2 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) received 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 or carpet cleaning, must have all tasks
completed as described in the purchase order or contract.
5.3.3 Freight Terminology
and Loss/Damage:
Freight or shipping terms should always be included in a contract. Purchase
orders should have a specified point of origin and destination. Misunderstanding of the freight terms may cause problems in the
receiving end of the purchase. In accordance with the National Institute of
Governmental Purchasing’s (NIGP) Public Procurement Dictionary of Terms (2008),
the definitions for Free on Board (F.O.B.) Destination and Free on Board
(F.O.B.) Origin are noted as follows:
Free on Board (F.O.B.) Destination: Where
the seller or consignee delivers the materials to a specified delivery point.
The cost of shipping and the risk of loss are borne by the seller or consignee.
Title passes when delivery is received by the buyer at destination. Seller has
total responsibility until shipment is delivered. This is the preferred method
of shipment as it easily facilities a comparison of price among multiple
vendors.
Free on Board (F.O.B.) Origin: Title is
transferred from seller to buyer at the origin of the shipment. Buyer owns the
goods in transit and files any claims. Buyer has total responsibility. The
payment of the freight charges is determined by contract terms.
Any use of this delivery method requires that the price evaluations
account for delivery costs to ensure an accurate price comparison.
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.
Damage during shipment must be resolved by the seller.
If the damage is obvious
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. If the damage or loss becomes
evident when uncrating, 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:
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
on behalf of the state.
If there is obvious loss or damage, 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.
If the damage or loss becomes evident when uncrating 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.
5.4 Payment Process: To promote good public relations 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.
5.4.1 State Purchasing
Card:
When possible, the spending unit is encouraged to use the State Purchasing Card.
Use of the State Purchasing Card, however, 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 Procedures located at:
5.5 Fixed Assets:
After payment has been made to the vendor, reportable property must
be added to the Fixed Assets module of wvOASIS.
5.6 Agency Delegated Public Records:
All records maintained at the agency level related to purchase orders and/or
contracts are considered public records. (Refer to
Section 1.7).
Agency delegated contracts and supporting documentation should be
maintained until the agency obtains permission to destroy the documents from the
Legislative Auditor’s office pursuant to
West Virginia Code §5A-3-11(h).
5.7 Attorney General’s Office Instructions for Use of WV-96:
The Attorney General’s Office has provided instructions for the use of the
Agreement Addendum (WV-96) for agency delegated purchases. The instructions are
included in
Appendix Q of this handbook.
5.8 Changes: Occasionally, it becomes necessary to amend, clarify, change or
cancel purchasing documents. A contract change order is required whenever the
change affects the payment provision, time for completion of the work and/or the
scope of the work. See Section 6.7
for more on Changes to Contracts
5.9 Contract Cancellation:
The agency
may cancel a contract or purchase order obtained through the agency delegated
process upon written notice to the vendor under any one of the following
conditions including, but not limited to:
(a) The
vendor agrees to the cancellation;
(b) The
vendor has obtained the contract by fraud, collusion, conspiracy, or in conflict
with any statutory or constitutional provision of the State of West Virginia;
(c) Failure
to conform to contract requirements or standard commercial practices;
(d) The
existence of an organizational conflict of interest is identified; or
(e) Funds are
not appropriated or an appropriation is discontinued by the legislature for the
acquisition.
(f) Violation
of any federal, state, or local law, regulation or ordinance.
The agency
may also cancel a purchase order or contract for any reason, upon 30 days’
written notice to the vendor.
In the event
that a vendor fails to honor any contractual term or condition, or violate any
provision of federal, state, or local law, regulation, or ordinance, the agency
may request the vendor remedy the contract breach or legal violation within a
time frame the agency determines to be appropriate. If the vendor fails to
remedy the contract breach or legal violation then the agency may cancel
immediately without providing the vendor an opportunity to perform a remedy.