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Vendor Procurement Guide

Section 2: Definitions

Vendors should become familiar with the following definitions, which are used in the state procurement process administered by the Purchasing Division.

Agency - For the purpose of this Vendor Procurement Guide, 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 or service expected to exceed $25,000, 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 and services that are frequently purchased but 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 or service which was competitively bid, evaluated, awarded and maintained by the state agency. This contract is for purchases $25,000 or less annually and for commodities and services that are frequently purchased that are not on a statewide contract.

Award Date - For purchases more than $25,000, the award date is the date of encumbrance by the Purchasing Division. This date is considered the date upon which the contract between the vendor and the agency is consummated.

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 Cycle Cost (LCC), and Expression of Interest (EOI).

Bid Bond – A bond in which a third party accepts liability 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.

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.

Cooperative Agreement – A legal relationship whereby state government is transferring a thing of value to a local government (or other recipient) to carry out a public purpose of support or stimulation authorized by law, as opposed to acquiring commodities or services for the direct benefit or use of state government.  With a cooperative agreement, substantial involvement is expected between the state agency and the local government or (other recipient).

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.

Emergency Purchase - A purchase made when unforeseen circumstances arise, including delays by contractors, delays in transportation and an 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 hardships resulting from neglect, poor planning or lack of organization by the spending unit. Failure to plan does not constitute an emergency situation.

Expression of Interest - A Best Value Procurement tool used primarily 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.

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 relationship (agreement) whereby state government is transferring a thing of value to a local government (or other recipient) to carry out a public purpose of support or stimulation authorized by law, as opposed to acquiring commodities or services for the direct benefit or use of state government.  In a grant relationship, substantial involvement is not expected between the state agency and the local government (or other recipient).

Labor and Materials Payment Bond - A bond submitted by the apparent successful vendor upon request of the state to ensure payment of labor and materials purchased or contracted on behalf of the state in a construction project.

Life Cycle Cost - 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 dates.

Litigation Bond - A 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.

Litigation Bond - A 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 protests as well as law suits filed by the vendor in protest of an award, etc.

Maintenance Bond - A 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 that are absolute and compliance with these terms 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 or must.

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 that 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.

Notice to Proceed - A formal written communication most often used in construction contracts to establish the date for work to commence and the date for its completion.

Open-End Contract - A generic term used for a contract that covers a period of time in which all terms, conditions and prices are specified with the exception of quantity.

Performance Bond – A bond in which a 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.

Pre-bid Conference - A meeting between vendors and agency personnel which provides 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.

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 (WV-16) issued by the Purchasing Division used to execute a purchase transaction with a vendor. It serves as notice to a vendor that a contract 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.

Release - 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.

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 Quotations (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.

Secondary Bid Process – A subsequent bidding process for commodities and services included in an existing contract that is required as part of the original terms and conditions. Participation in this secondary bid process is restricted to the pre-approved, certified vendors for the existing contract.

Sole Source - The only known vendor who can supply a commodity or service needed by a state agency.

Solicitation - A written or oral attempt made by the state to obtain bids or proposals for the purpose of entering into a contract. A Request for Quotations (RFQ), Request for Proposals (RFP), telephone calls or other documents may be used.

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.

Vendor - An individual or business registered with the Purchasing Division who may provide commodities and services to state agencies.

Vendor Preference - 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.

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