Legislature(1995 - 1996)
03/28/1996 03:40 PM Senate STA
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* first hearing in first committee of referral
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= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
SB 275 STATE PROCUREMENT PRACTICES & PROCEDURES
CHAIRMAN SHARP brought up SB 275 as the next order of business
before the Senate State Affairs Committee.
Number 345
JERRY BURNETT, Aide to Senator Randy Phillips, reviewed the changes
to SB 275 as set out in a memo dated March 26, 1996 from Senator
Phillips. Outlined below are the changes:
Sections 1-6 are new. These sections require the Ombudsman, the
Alaska Railroad, the Aerospace Development Corporation, Alaska
Housing Finance Corporation, the Alaska State Pensions Investment
Board, the Alaska Seafood Marketing Institute, the Legislature, and
the Court System to comply with AS 36.30.170(b), the Alaska
Bidders' Preference.
Section 10 is the same as former Section 4, except that the 5,000
square foot exception has been changed to 3,000 square feet.
Section 11 is the same as former Section 5, except that the
University is not allowed to extend leases under this provision.
Sections 6 and 7 of the original bill have been deleted.
Section 14 is the same as former Section 10, except that the
language on line 25 has been changed from "that regularly provides
in the normal course of business" to " that deals in".
Section 16 is the sam as former Section 12, with the exception that
the terms "bidder" and "offeror" are clearly defined as having the
same meaning for the purpose of AS 36.30.115(a-e).
Section 20 is the same as former Section 16, with a new subsection
(e) that prohibits the delegation by the chief procurement officer
or the Commissioner of DOT/PF of the determination to make a single
source procurement.
Section 21 is the same as former Section 17, with the exception of
changes in drafting style.
Section 23 is the same as former Section 19, except that the title
was changed to "Innovative Competitive Procurements".
Section 24 is the same as former Sections 20 and 21.
Section 25 replaces former Section 22, which makes any state
official who makes a false statement in a determination under the
procurement code guilty of a class A misdemeanor.
Section 26 is the same as former Section 23, except that 5,000
square feet has been changed to 3,000 square feet.
Section 30 is the same as former Section 27, with the addition of
new language in subsection (b) that requires the Department of
Transportation to maintain and submit to the Commissioner of the
Department of Administration records of single source procurements.
Section 32 is the same as former Section 29, with the addition of
applying the procedures to "the proposed award of a contract".
Section 33 replaces former Section 30, with all new language on the
timing of a protest.
Section 39 is the same as former Section 36, except for the change
from 30 days to 90 days for the time limit for filing a claim on a
contract.
Section 43 is the same as former Section 40, except that paragraph
(34) now exempts only Governor's Office contracts with the media
for advertising, instead of an exemption for lobbying, public
relations, and advertising.
Section 44 is the same as former Section 41, except that it
specifies "41 U.S.C." instead of "federal law".
Section 51 is a new section that makes the first lease extension
report due on August 31, 1997, formerly covered in Section 5.
Section 53 is the same as former Section 48, with the addition of
the sections applying the Alaska Bidders' Preference to agencies
exempted from the procurement code.
CHAIRMAN SHARP handed out Executive Branch Conflict of Interest
reports. He advised members to look at the forms. We want to look
at this in the Rules Committee.
SENATOR DONLEY thinks that when ethics is considered, they should
be considering a comprehensive ethics in government act.
MR. BURNETT believes that someone from the Department of
Administration would like to speak to some of the changes in the
committee substitute.
SENATOR DONLEY made a motion to adopt the committee substitute for
SB 275.
Number 205
CHAIRMAN SHARP, hearing no objection, stated the committee
substitute was adopted. He asked for comments from the Department
of Administration.
Number 195
DUGAN PETTY, Director, Division of General Services, Department of
Administration, stated there are four comments he would like to
make on the committee substitute. It is his understanding that
Section 14 still needs some work. That is the section that
addresses the issue of brokering bidder preferences. He thinks
there is still some improvement that could be made there. Under
Section 20, the section on single-source procurements, the
administration requests that there be an amendment introduced to
allow for some level of delegation on single-source procurements.
Under current statute, the sole-source requirement may not be
delegated by the chief procurement officer, with the exception of
small procurements. We'd like to maintain that level, recognizing
that there's some level of sole-source that can be delegated to an
agency head to make a determination. Other wise, the chief
procurement officer will spend a lot of their time dealing with
relatively small determinations for single sources. The current
statutory limitation is $25,000.00. He thinks the preferable
approach would be to identify it as a small procurement. If the
committee thinks a $50,000.00 statutory procurement limitation is
too high, he suggested lowering that figure to $25,000.00. It
would be difficult to handle those without some level of
delegation. Mr. Petty suggested language to make that change.
MR. PETTY made the same suggestion under Section 21. The
administration would like to see the current allowance for
delegation of small procurements to continue. On Section 21, line
20, there is a comma after $100,000.00; the administration thinks
the deletion of that comma could cause confusion. Those are the
comments.
Number 125
SENATOR LEMAN stated that if deleting the comma causes confusion,
why not just re-order the sentence to say, "a construction contract
under $100,000.00 or a contract for supplies, services, or
professional services may be awarded without competitive sealed
bidding." He moved that amendment.
CHAIRMAN SHARP, hearing no objection, stated the amendment was
adopted.
MR. PETTY stated the administration can live with the committee
substitute as it now reads. But Section 14 should be addressed.
CHAIRMAN SHARP thinks they should forbid brokering of bids that
take advantage of the preference.
Number 085
MR. PETTY informed the committee that the administration has
proposed an amendment on this issue. The amendment proposes to
leave subsection (b) alone, but require that bidders have a history
of selling the supplies of the general nature solicited by the
state to other governments or to the general public.
Number 050
SENATOR DONLEY does not remember having a problem with Section 14
the way it was.
MR. PETTY responded the amendment would not impact the Alaska
bidders' preference, but would simply address the disabled bidders'
preference, the employment program preference, and the business
employing disabled preference.
SENATOR DONLEY asked what was wrong with Section 14 the way it was.
MR. PETTY responded that the concern with Section 14 in the
committee substitute is there is a question of whether that would
solve the problem.
SENATOR DONLEY asked what's wrong with Section 14 in the committee
substitute.
MR. PETTY replied, as he understands it, it's not specific enough
to believe it would prevent the brokering issue, and also, it
required someone to have sold a product or dealt in a product or
supply within the past six months, because it's tied to the six
months of the Alaska bidders' preference. So if an individual had
sold a product 18 or 20 months ago, but not within the last 6
months, they would have been prevented from getting the preference,
when they more appropriately should get it.
TAPE 96-26, SIDE A
Number 010
CHAIRMAN SHARP moved amendment #2 to SB 275.
SENATOR LEMAN objected for the purpose of a clarification. He
asked Mr. Petty if he meant "solicit to other governmental
agencies," because that's not what the bill says.
MR. PETTY stated he misspoke. He prefers the language as it is
written.
SENATOR LEMAN stated this is a little bit different from what he
normally sees in statute. Maybe the drafting attorneys can--
SENATOR RANDY PHILLIPS interjected that SB 275 goes to the
Judiciary Committee.
SENATOR LEMAN thinks it may be interpreted as "solicit to other
governments". What does that mean? Municipal governments?
MR. PETTY responded, municipal governments or other state agencies.
We just want them to have some track record of having been in
business.
SENATOR RANDY PHILLIPS suggested, "other political jurisdictions".
CHAIRMAN SHARP asked Senator Leman what he wanted to do.
SENATOR LEMAN thinks it should say, "solicit to other agencies or
governments," or something like that.
MR. PETTY agreed. If the language was to say, "solicited to other
state agencies, other governments, or to the general public," that
would cover Senator Leman's concern and the intent of the
legislation.
SENATOR LEMAN made a motion to amend amendment #2 and incorporate
those words.
CHAIRMAN SHARP asked if there was objection. Hearing none, he
stated the amendment to amendment #2 was adopted.
Number 070
CHAIRMAN SHARP asked if there was objection to amendment #2.
Hearing none, he stated the amendment was adopted.
CHAIRMAN SHARP asked if there is any prohibition on "shopping"
bids.
MR. PETTY stated that under the invitation to bid procedures, that
is not only inappropriate and unfair, but is not allowed under
current law. However, he doesn't want to mislead the committee,
because the innovative competitive procurement section states that
under certain circumstances there are cases where it's not
practical to use the invitation to bid process, which would prevent
that, or the competitive sealed proposal process, because it's like
trying to put a square peg in a round hole.
CHAIRMAN SHARP asked if that would still prevent bid shopping.
MR. PETTY responded that if the bid process was the appropriate
vehicle, we wouldn't get to the innovative procurement; we would
use the invitation to bid process. Our obligation is to award the
bid to the low responsive responsible bidder. We can't have people
change their bid. We couldn't do that under current law.
Number 135
CHAIRMAN SHARP stated the committee has written testimony in
support of SB 275 from Johanna Munson of Emcon Alaska, Inc.
Number 150
CHAIRMAN SHARP wants the intent for buying off the GSA supply
schedules to be used only for suppliers listed in the State of
Alaska, and not to be used as a catalog for GSA suppliers outside
the state.
SENATOR DONLEY made a motion to move amendment C.6 (amendment #3),
which addresses the chairman's concern.
CHAIRMAN SHARP asked if there is objection. Hearing none, he
stated the amendment is adopted. The chairman asked if there are
other amendments.
SENATOR RANDY PHILLIPS stated there is an amendment on Section 20.
MR. PETTY stated that Section 20 is the single-source section. We
want the authority to delegate small purchases. We currently have
the ability to delegate the determination of a sole-source for a
small procurement. That current threshold is $25,000.00. We would
want to preserve the ability to delegate those small procurement
determinations for single-source.
SENATOR LEMAN moved amendment #4.
MR. PETTY stated that the amendment would amend page 10, line 16 to
read, "except for procurements of supplies, services, professional
services, or construction that do not exceed the amount for small
procurements under AS 36.30.320(a), as applicable. The authority
to make a determination required by this section may not be
delegated, even if the authority to contract is delegated under AS
36.30.015(a-b)."
SENATOR RANDY PHILLIPS stated it is a "trust me" amendment.
SENATOR DONLEY asked Senator Phillips if he knows what the
amendment is.
SENATOR RANDY PHILLIPS replied, no, but his aide is saying it's
okay.
SENATOR LEMAN asked if there is documentation of that determination
made. We don't want this abused.
MR. PETTY replied this is delegated to specific individuals, and it
is made clear to them that they have the same threshold
requirements of statute as the chief procurement officer. Under
this, we would anticipate that we would have to do some training,
because those thresholds have changed with SB 275.
ELMER RASMUSSEN, Acting Director, Division of Engineering &
Operations, Department of Transportation & Public Facilities,
stated DOT requires that the same forms, process, and documentation
level be used for small procurements, with the only difference
being the person who signs it is the delegated individual, instead
of the commissioner.
SENATOR RANDY PHILLIPS made a motion to adopt amendment #4.
Number 225
CHAIRMAN SHARP, hearing no objection, stated amendment #4 is
adopted.
SENATOR RANDY PHILLIPS made a motion to discharge SB 275 from the
Senate State Affairs Committee with individual recommendations.
CHAIRMAN SHARP, hearing no objection, stated SB 275 was discharged
from the Senate State Affairs Committee.
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