03/29/2011 08:00 AM House STATE AFFAIRS

                 HB 204-STATE PROCUREMENT CODE                                                                              
                                                                                                                                
[Contains discussion of HB 205.]                                                                                                
                                                                                                                                
9:12:10 AM                                                                                                                    
                                                                                                                                
CHAIR LYNN  announced that the  next order of business  was HOUSE                                                               
BILL NO.  204, "An  Act relating to  the State  Procurement Code,                                                               
including  the use  of small  procurement provisions  for certain                                                               
amounts  of  leased space,  the  requirement  of Alaska  business                                                               
license   proof  for   Alaska   bidder   and  other   procurement                                                               
preferences,  the registration  of construction  contract bidders                                                               
and  offerors,  the establishment  and  maintenance  of lists  of                                                               
persons who  want to provide  supplies or services to  the state,                                                               
state agencies, and state  instrumentalities, electronic bids and                                                               
proposals, small  procurements, and  writings; and  providing for                                                               
an effective date."                                                                                                             
                                                                                                                                
9:12:41 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  ANNA  FAIRCLOUGH,  Alaska State  Legislature,  as                                                               
sponsor,  presented  HB  204.   She  explained  that  during  the                                                               
Twenty-Sixth  Alaska State  Legislature, while  bringing forth  a                                                               
veterans'   procurement  bill   that   addressed  Alaska   bidder                                                               
preferences,  she discovered  that  procurement preferences  were                                                               
"scattered   throughout  the   code"  and   the  state's   "large                                                               
procurement versus  small procurement code" had  not been updated                                                               
in a  long time.   Representative Fairclough  said HB  204 would:                                                               
increase the square  footage for small procurement  from 3,000 to                                                               
7,000  square feet;  increase small  procurement  from 50,000  to                                                               
100,000 square  feet for professional  services and  from 100,000                                                               
to  200,000 for  construction; and  eliminate "the  employers for                                                               
the disabled."   She said House  Bill 225 - the  procurement bill                                                               
of the last legislature  - was split into HB 204  and HB 205, and                                                               
the  only  significant difference  between  the  former bill  and                                                               
current bills is  that neither HB 204 nor HB  205 has anything to                                                               
do with "the offeror's preference."                                                                                             
                                                                                                                                
REPRESENTATIVE FAIRCLOUGH,  in response to Chair  Lynn, explained                                                               
that  during   the  Twenty-Sixth  Alaska  State   Legislature,  a                                                               
veterans'  preference bill  was passed,  which allowed  stackable                                                               
credit limited by  $5,000 "on top of every  other preference that                                                               
an individual or  a company could qualify for."   She said HB 204                                                               
focuses  specifically  on  statutes  related  to  Alaska's  small                                                               
procurement codes.                                                                                                              
                                                                                                                                
9:15:00 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  JOHANSEN  asked the  sponsor  to  confirm if  the                                                               
"offeror's preference" had been removed.                                                                                        
                                                                                                                                
9:15:28 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE FAIRCLOUGH responded yes.                                                                                        
                                                                                                                                
9:18:00 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE GRUENBERG asked why the  bill sponsor chose to use                                                               
two bills  as a vehicle for  the remaining content of  House Bill                                                               
225.                                                                                                                            
                                                                                                                                
REPRESENTATIVE  FAIRCLOUGH  explained  that  she  put  the  least                                                               
controversial issue -  the changes to the  small procurement code                                                               
- in HB  204.  In response to Representative  Gruenberg, she said                                                               
the  veteran  [preference]  was repealed  and  realigned  in  one                                                               
section of HB 205.                                                                                                              
                                                                                                                                
REPRESENTATIVE GRUENBERG asked what  the reason is behind raising                                                               
the procurement code requirements and  how many contracts will no                                                               
longer be done through the procurement code as a result.                                                                        
                                                                                                                                
9:20:01 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE FAIRCLOUGH  clarified that  the bill is  not about                                                               
not  being in  the procurement  code,  but is  about raising  the                                                               
limits for  small procurement acquisitions.   She  explained that                                                               
the purpose  of doing this  is to  reduce the load  being carried                                                               
currently by  those in charge  of procurements and allow  them to                                                               
focus on  "the larger square  footage issues."  A  further result                                                               
of HB 204, she said, would be the increase of competition.                                                                      
                                                                                                                                
9:21:28 AM                                                                                                                    
                                                                                                                                
VERN JONES,  Chief Procurement Officer, Central  Office, Division                                                               
of  General   Services,  Department  of   Administration,  echoed                                                               
Representative   Fairclough's   response.      In   response   to                                                               
Representative  P.  Wilson, he  confirmed  that  the process  for                                                               
smaller procurements  is easier  and may  increase the  number of                                                               
people responding to a request for proposals.                                                                                   
                                                                                                                                
9:25:16 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  FAIRCLOUGH  paraphrased the  sectional  analysis,                                                               
which read as follows:                                                                                                          
                                                                                                                                
     Section 1: Amends AS 36.30.080(f)                                                                                          
                                                                                                                                
      Increases the threshold limit for small procurements                                                                      
     of leased space from 3,000 square feet to 7,000 square                                                                     
     feet, consistent with section 7.                                                                                           
                                                                                                                                
     Section 2: Amends AS 36.30.110(b)                                                                                          
                                                                                                                                
     Clarifies  Alaska  business  license  requirements  for                                                                    
     competitive  sealed  bids  and  qualification  for  the                                                                    
     Alaska bidder preference.  Change would require bidders                                                                    
     to show  proof of  their Alaska Business  License prior                                                                    
     to award, but would require  the license at the time of                                                                    
     bid  submission  in order  to  qualify  for the  Alaska                                                                    
     bidder preference.                                                                                                         
                                                                                                                                
     Section 3: Amends AS 36.30.130(a)                                                                                          
                                                                                                                                
     Eliminates reference to a  procurement officer's use of                                                                    
     vendor  lists, reflecting  the  repeal  of the  statute                                                                    
     establishing the vendor  lists, consistent with section                                                                    
     10.                                                                                                                        
                                                                                                                                
     Section 4: Amends AS 36.30.210(b)                                                                                          
                                                                                                                                
     Clarifies    construction    contractor    registration                                                                    
     requirements,  now  explicitly  requiring  registration                                                                    
     before award of a contract.                                                                                                
                                                                                                                                
     Section 5: Amends AS 36.30.210(e)                                                                                          
                                                                                                                                
     Clarifies  Alaska  business  license  requirements  for                                                                    
     competitive sealed proposals  and qualification for the                                                                    
     Alaska  bidder  preference  using  language  consistent                                                                    
     with that used in section 2.                                                                                               
                                                                                                                                
     Section  6: Amends  AS 36.30  by adding  a new  section                                                                    
     36.30.290                                                                                                                  
                                                                                                                                
     Adds  a  new  section  allowing  an  agency  to  accept                                                                    
     electronic bids and proposals. Session: Alaska State                                                                       
                                                                                                                                
     Section 7: Amends AS 36.30.320(a)                                                                                          
                                                                                                                                
     Increases the threshold under which  a state agency may                                                                    
     use informal procurement process  to $100,000 for goods                                                                    
     and    professional   services,    to   $200,000    for                                                                    
     construction,  and  7,000  square  feet  for  lease  of                                                                    
     space.                                                                                                                     
                                                                                                                                
     Section 8: Amends AS 36.30.655                                                                                             
                                                                                                                                
     Eliminates  reference to  the  removal  of debarred  or                                                                    
     suspended  persons from  vendor  lists, reflecting  the                                                                    
     repeal  of   a  law  establishing  the   vendor  lists,                                                                    
     consistent with section 10.                                                                                                
                                                                                                                                
     Section 9: Amends AS 36.30.990                                                                                             
                                                                                                                                
     Adds new definitions for "in writing" and "written."                                                                       
                                                                                                                                
     Section  10: Repeals  statute  establishing the  vendor                                                                    
     list.                                                                                                                      
                                                                                                                                
     Section 11: Amends  the uncodified law of  the State of                                                                    
     Alaska                                                                                                                     
                                                                                                                                
     Clarifies  the application  of the  procurement act  to                                                                    
     pending solicitations during transition period.                                                                            
                                                                                                                                
     Section 12: Effective Date                                                                                                 
                                                                                                                                
     Language   making   the   procurement   act   effective                                                                    
     immediately.                                                                                                               
                                                                                                                                
9:27:55 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE GRUENBERG directed attention  to Section 11(b), on                                                               
page 4, lines 17-19, which read as follows:                                                                                     
                                                                                                                                
          (b) Notwithstanding (a) of this section, this Act                                                                     
     applies  to  procurements  or  contracts  described  in                                                                    
     (a)(1)  of   this  section  if   all  parties   to  the                                                                    
     procurement  or  contract  agree in  writing  that  the                                                                    
     applicable  provisions   of  this  Act  apply   to  the                                                                    
     solicitation or contract.                                                                                                  
                                                                                                                                
REPRESENTATIVE  GRUENBERG described  a hypothetical  situation in                                                               
which  both the  government and  the person  who gets  a contract                                                               
agree that  the Act applies, but  someone else who did  not get a                                                               
contract might be aggrieved.                                                                                                    
                                                                                                                                
MR.  JONES said  he thinks  practically speaking  that would  not                                                               
happen.  He said the  division issues procurements under the code                                                               
enforced at  the time of  issuance.  He  said under HB  204, only                                                               
the  procurement methodology  that would  be  used to  get to  an                                                               
award would be changed, not the protest and appeal procedures.                                                                  
                                                                                                                                
REPRESENTATIVE GRUENBERG asked Mr. Jones  to confirm that what he                                                               
is saying is that the government "would not agree to that."                                                                     
                                                                                                                                
MR. JONES said that is correct.                                                                                                 
                                                                                                                                
REPRESENTATIVE GRUENBERG  said with  that assurance he  thinks HB
 is a good bill.                                                                                                             
                                                                                                                                
9:31:22 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE KELLER  moved to  report HB  204 out  of committee                                                               
with  individual  recommendations  and  the  accompanying  fiscal                                                               
notes.                                                                                                                          
                                                                                                                                
9:31:30 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE JOHANSEN objected.                                                                                               
                                                                                                                                
CHAIR LYNN,  in response  to the  bill sponsor,  ascertained that                                                               
there was no one else who wished to testify.                                                                                    
                                                                                                                                
REPRESENTATIVE JOHANSEN directed attention  to Sections 8 and 10,                                                               
which  require  the  commissioner  to "maintain  a  list  of  all                                                               
persons debarred  or suspended from consideration"  and remove AS                                                               
36.30.050, respectively.   He expressed  concern that  the public                                                               
be made aware of any person who has been debarred.                                                                              
                                                                                                                                
9:33:14 AM                                                                                                                    
                                                                                                                                
MR. JONES  responded that [AS  36.30.050] is statute  that refers                                                               
to the Alaska  bidders' list.  He explained that  the division is                                                               
doing  away with  the bidders'  list, because  it is  an outdated                                                               
system  that  has  fallen  out  of use;  an  on  line  system  is                                                               
currently being used.  He  stated that the division will continue                                                               
to keep the list of debarred individuals.                                                                                       
                                                                                                                                
REPRESENTATIVE JOHANSEN  said he  understands that, but  wants to                                                               
ensure that the commissioner's list is made public.                                                                             
                                                                                                                                
REPRESENTATIVE JOHANSEN  removed his  objection.  There  being no                                                               
further objection,  HB 204  was reported out  of the  House State                                                               
Affairs Standing Committee.