KRS 45A.045: Authority of cabinet -- Authority to promulgate administrative

regulations -- Disposal of state-owned real and personal property.

(1) The Finance and Administration Cabinet shall serve as the central procurement and

contracting agency of the Commonwealth. The cabinet shall:

(a) Require all agencies to furnish an estimate of specific needs for supplies,

materials, and equipment to be purchased by competitive bidding for the

purpose of permitting scheduling of purchasing in large volume. The cab inet

shall establish and enforce schedules for purchasing supplies, materials, and

equipment. In addition, prior to the beginning of each fiscal year all agencies

shall submit to the Finance and Administration Cabinet an estimate of all

needs for supplies, materials, and equipment during that year which will have

to be required through competitive bidding;

(b) Have the authority, with the approval of the secretary of the Finance and

Administration Cabinet, to transfer between departments, to salvage, to

exchange, and to condemn supplies, equipment, and real property; and

(c) Attempt in every practicable way to ensure that state agencies are fulfilling

their business needs through the application of the best value criteria.

(2) The Finance and Administration Cabinet shall recommend regulations, rules, and

procedures and shall have supervision over all purchases by the various spending

agencies, except as otherwise provided by law, and, subject to the approval of the

secretary of the Finance and Administration Cabinet, shall promulgate

administrative regulations to govern purchasing by or for all these agencies. The

cabinet shall publish a manual of procedures which shall be incorporated by

reference as an administrative regulation in accordance with KRS Chapter 13A.

This manual shall be distributed to agencies and shall be revised upon issuance of

amendments to these procedures. No purchase or contract shall be binding on the

state or any agency thereof unless approved by the Finance and Administration

Cabinet o r made under general administrative regulations promulgated by the

cabinet.

(3) The Finance and Administration Cabinet shall purchase or otherwise acquire, or,

with the approval of the secretary, may delegate and control the purchase and

acquisition of the combined requirements of all spending agencies of the state,

including, but not limited to, interests in real property, contractual services, rentals

of all types, supplies, materials, equipment, and services.

(4) (a) The Finance and Administration Cabinet shall sell, trade, or otherwise dispose

of any interest in real property of the state which is not needed, or has become

unsuitable for public use, or would be more suitable to the public's interest if

used in another manner, as determined by the secreta ry of the Finance and

Administration Cabinet.

(b) The determination of the secretary of the Finance and Administration Cabinet

shall be set forth in an order and shall be reached only after review of a

written request by the agency desiring to dispose of t he real property. This

request shall describe the real property and state the reasons why the agency

believes the real property should be disposed.

(c) Before the disposal of real property, the secretary of the Finance and

Administration Cabinet shall determine that:

1. No other state agency has a purpose for the real property; and

2. The city, county, urban -county government, or consolidated local

government where the real property is located does not have an

ownership interest in the real property.

(d) All instruments required by law to be recorded which convey any interest in

any real property so disposed of shall be executed and signed by the secretary

of the Finance and Administration Cabinet and approved by the Governor.

(e) Unless the secretary of the Finance and Administration Cabinet deems it in

the best interest of the state to proceed otherwise, all interests in real property

shall be sold either by invitation of sealed bids or by public auction. The

selling price of any interest in real property shall not be less than the appraised

value thereof as determined by the cabinet, or the Transportation Cabinet for

the requirements of that cabinet.

(f) A state agency notifying the Finance and Administration Cabinet of its intent

to dispose of any interest in real property assigned to the state agency shall

continue to provide maintenance and security of the existing structures,

buildings, and land includ ed in the real property until the sale or other

disposition is complete.

(g) In the event the Finance and Administration Cabinet receives no responsive

bids for real property being disposed of, either by sealed bid or by public

auction, the real property m ay be disposed of, consistent with the public

interest, in any manner deemed appropriate by the secretary of the Finance

and Administration Cabinet. A written description of the real property, the

method of disposal, and the amount of compensation, if any, shall be made by

the secretary of the Finance and Administration Cabinet.

(5) (a) If state-owned real property is observed to be abandoned, or it has not been

substantially utilized for a public use, the chief executive officer of the city,

county, urban -county government, or consolidated local government where

the real property is located may:

1. Receive notice inquiring about the real property from a citizen,

developer, or consultant as described in paragraph (d) of this subsection;

2. Develop a plan for public use of the real property; and

3. Submit a written notice to the secretary of the Finance and

Administration Cabinet and the Capital Planning Advisory Board:

a. Expressing interest in the use of the real property;

b. Requesting state utilization inf ormation from the Finance and

Administration Cabinet on the availability of the real property for

disposal; and

c. Requesting the real property to be considered for sale, trade, or

disposal.

(b) Within sixty (60) calendar days of receiving written notice u nder paragraph

(a)3. of this subsection, the secretary of the Finance and Administration

Cabinet shall send a written response to the chief executive officer of the city,

county, urban-county government, or consolidated local government and the

Capital Planning Advisory Board that includes but is not limited to:

1. The current occupancy and use of the real property;

2. If the Finance and Administration Cabinet or other applicable state

agency intends to evaluate real property for disposal under subsection

(4) of this section or to maintain its ownership interest in the real

property for public use; and

3. Provide a description of the real property, current status, available and

planned occupancy, utilization, restrictions of use, and a timeline for full

utilization of the property.

(c) If the applicable state agency determines to request disposal of the real

property, the state agency and Finance and Administration Cabinet shall

proceed in accordance with subsection (4) of this section.

(d) A citizen, develop er, or consultant may notify the chief executive officer of

the city, county, urban -county government, or consolidated local government

where state-owned real property is located if he or she observes that the state -

owned real property is abandoned or not substantially utilized for public use.

(6) The Finance and Administration Cabinet shall sell, trade, or otherwise dispose of all

personal property of the state that is not needed, or has become unsuitable for

public use, or would be more suitable to the pu blic's interest if used in another

manner, or, with the approval of the secretary, may delegate the sale, trade, or other

disposal of the personal property. In the event the authority is delegated, the method

for disposal shall be determined by the agency head, in accordance with

administrative regulations promulgated by the Finance and Administration Cabinet,

and shall be set forth in a document describing the property and stating the method

of disposal and the reasons why the agency believes the property should be

disposed of. In the event the authority is not delegated, requests to the Finance and

Administration Cabinet to sell, trade, or otherwise dispose of the property shall

describe the property and state the reasons why the agency believes the proper ty

should be disposed of. The method for disposal shall be determined by the Division

of Surplus Properties, and approved by the secretary of the Finance and

Administration Cabinet or his or her designee.

(7) The Finance and Administration Cabinet shall ex ercise general supervision and

control over all warehouses, storerooms, and stores and of all inventories of

supplies, services, and construction belonging to the Commonwealth. The cabinet

shall promulgate administrative regulations to require agencies to take and maintain

inventories of plant property, buildings, structures, other fixed assets, and

equipment. The cabinet shall conduct periodic physical audits of inventories.

(8) The Finance and Administration Cabinet shall establish and maintain programs f or

the development and use of purchasing specifications and for the inspection,

testing, and acceptance of supplies, services, and construction.

(9) Nothing in this section shall prevent the Finance and Administration Cabinet from

negotiating with vendors who maintain a General Services Administration price

agreement with the United States of America or any agency thereof. No contract

executed under this provision shall authorize a price higher than is contained in the

contract between the General Services Administration and the vendor affected.

(10) Except as provided in KRS Chapters 175, 176, 177, and 180, and subject to the

provisions of this code, the Finance and Administration Cabinet shall purchase or

otherwise acquire all real property determined to b e needed for state use, upon

approval of the secretary of the Finance and Administration Cabinet as to the

determination of need and as to the action of purchase or other acquisition. The

amount paid for this real property shall not exceed the appraised va lue as

determined by the cabinet or the Transportation Cabinet (for such requirements of

that cabinet), or the value set by eminent domain procedure. Subject to the

provisions of this code, real property or any interest therein may be purchased,

leased, or otherwise acquired from any officer or employee of any agency of the

state upon a finding by the Finance and Administration Cabinet, based upon a

written application by the head of the agency requesting the purchase, and approved

by the secretary of the F inance and Administration Cabinet and the Governor, that

the employee has not either himself or herself, or through any other person,

influenced or attempted to influence either the agency requesting the acquisition of

the property or the Finance and Admin istration Cabinet in connection with such

acquisition. Whenever such an acquisition is consummated, the request and finding

shall be recorded and kept by the Secretary of State along with the other documents

recorded pursuant to the provisions of KRS Chapter 56.

(11) The Finance and Administration Cabinet shall maintain records of all purchases and

sales made under its authority and shall make periodic summary reports of all

transactions to the secretary of the Finance and Administration Cabinet, the

Governor, and the General Assembly. The Finance and Administration Cabinet

shall also report trends in costs and prices, including savings realized through

improved practices, to the above authorities. The Finance and Administration

Cabinet shall also compile an annual repo rt of state purchases by all spending

agencies in the state's statewide accounting and reporting system. The report format

shall include, but not be limited to, dollar amount, volume, type of purchase, and

vendor.

(12) For capital construction projects, su bject to the provisions of this code and KRS

45A.180, the procurement may be on whichever of the following alternative project

delivery methods, in the judgment of the secretary of the Finance and

Administration Cabinet after first considering the traditio nal design -bid-build

project delivery method, offers the best value to the taxpayer:

(a) A design-build basis; or

(b) A construction management-at-risk basis.

Proposals shall be reviewed by the engineering staff to assure quality and value, and

compliance with procurement procedures. All specifications shall be written to

promote competition. Nothing in this section shall prohibit the procurement of

phased bidding or construction manager-agency services.

(13) The Finance and Administration Cabinet shall have control and supervision over all

purchases of energy -consuming equipment, supplies, and related equipment

purchased or acquired by any agency of the state as provided in this code, and shall

promulgate administrative regulations to designate the manner in which an energy -

consuming item will be purchased so as to promote energy conservation and

acquisition of energy efficient products. Major energy components shall be

amortized on a seven (7) to ten (10) years' recovery basis and shall take into

consideration the projected cost of fuel. The Finance and Administration Cabinet, in

consultation with the Cabinet for Economic Development, shall conduct a thorough

economic feasibility analysis on any major energy-using component of at least three

million (3,000, 000) BTU's per hour heat input and shall issue a certificate of

economic feasibility prior to the Finance and Administration Cabinet's purchasing

or retrofitting any such component that utilizes any fuel other than coal. The

economic feasibility analysis s hall consist of life -cycle cost comparisons of a

component that would utilize coal and one(s) that would utilize any fuel other than

coal. For the analysis, the Finance and Administration Cabinet shall provide

detailed estimates of equipment purchase price , installation cost, annual operation

and maintenance costs, and usage patterns of energy-using components.