Legislature(2007 - 2008)CAPITOL 106
03/06/2008 08:00 AM House STATE AFFAIRS
| Audio | Topic |
|---|---|
| Start | |
| HB353 | |
| HCR20 | |
| HB406 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| *+ | HB 396 | TELECONFERENCED | |
| += | HB 261 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| += | HB 353 | TELECONFERENCED | |
| += | HCR 20 | TELECONFERENCED | |
| += | HB 406 | TELECONFERENCED | |
HB 406-COMPETITIVE BIDDING FOR BALLOT PREP 9:39:51 AM VICE CHAIR ROSES announced that the final order of business was HOUSE BILL NO. 406, "An Act relating to a requirement for competitive bidding on contracts for the preparation of election ballots." 9:40:08 AM REPRESENTATIVE JOHNSON moved to adopt the proposed committee substitute (CS) for HB 406, Version 25-LS1487\C, Bullard, 2/28/08, as a work draft. There being no objection, Version C was before the committee. 9:40:34 AM RENEE LIMOGE, Staff, Representative Anna Fairclough, Alaska State Legislature, introduced HB 406 on behalf of Representative Fairclough, prime sponsor. She said the intent of the bill is to open the competitive bidding process and to allow for fair business practices in Alaska. The bill includes an Alaska bidder and product preference and would not subject the Division of Elections to the procurement code. Furthermore, Ms. Limoge said, the intent is not to affect the integrity of the ballots printed or Alaska's election process. Currently, there is a sole source contract for the printing of election ballots, and the bill sponsor would like to open up that process to allow other Alaska printers the opportunity to apply for the business. 9:41:44 AM MS. LIMOGE, in response to a question from Representative Doll, said currently there is one vendor that is certified. However, she offered her understanding that the certification process is no longer [required], so other printers would be able to apply. When the certification process did exist, the cost was prohibitive. She added, "And when it was a closed process, there wasn't much need to do that." 9:42:26 AM KERRY NOBLIN, Peninsula Printing, testified in support of HB 406, as follows: Currently the Division of Elections is contracting this work through one shop without giving other qualified printing contractors the chance to bid on the job. I can understand that the Division of Elections has become complacent and comfortable with their current arrangement and their sole printing contractor, but the efforts that go into printing these ballots are neither a technical nor extraordinary effort. The printing of state election specific ballots is a rather simple job when it comes down to the process of completing it. The largest challenge that face[s] any shop competing for the contract is the sheer volume of that ballot, but there are many printing contractors in Alaska that are capable of handling these quantities. Without putting these ballots out for bid, the state is leaving itself to the mercy of one contractor, allowing this contractor to dictate terms to the state with regards to [the] pricing, quality, [and] turnaround of this job. It is a bad policy to uphold and it also stifles a strong, competitive atmosphere. With state election ballots being put up for bid among qualified Alaskan printers, not only will the state be stimulating positive economic growth in the Alaska printing industry, but it will also ensure that the state is getting the best deal possible in terms of price, quality, and turnaround. The public bid process of the contracting of other election ballots has been successful in the past, and continues to be a success on a municipality and borough level. In closing, it is my belief that the state should support this bill. The bill not only ensures the state is getting the best deal possible, it will help stimulate economic growth in the local printing industry. 9:44:37 AM REPRESENTATIVE DOLL asked Mr. Noblin why he thinks the use of one printing company puts the state in a position of having to "obey this vendor." MR. NOBLIN answered that because the state is not giving other vendors the opportunity to bid on projects, there is no way of knowing whether the single vendor being used is charging fair prices; there is no means of comparison. 9:46:04 AM REPRESENTATIVE GRUENBERG directed attention to a letter in the committee packet, from Kevin Fraley, the general manager of Super Software Inc. "DBA - Print Works," dated March 12, 2008. He said he would like to know how Mr. Noblin would respond to the information in Mr. Fraley's letter. 9:47:36 AM PATRICK FOSTER, A.T. Publishing and Printing, testified in support of HB 406. He said he has worked in the printing industry in Alaska for nearly 30 years. He said the State of Alaska used Diebold Election Systems' ("Diebold") electronic ballot readers for the purpose of tallying votes from statewide elections. Until recently, he noted, Diebold required printing companies that print ballots used in its machines to be certified by the company. At the time that the State of Alaska adopted the use of Diebold's ballot readers in the mid-1990s, no companies in Alaska were certified. Shortly after, a small, Alaska printing company was certified, and the Division of Elections has "sole-sourced approximately $2 million to this company since." He said that has been done despite the fact that a number of Alaska printing companies have voiced a desire to be included in the process. Mr. Foster said his company became a certified Diebold printer in 2003; however, today, Diebold no longer requires certification, which removes an expensive hurdle for many Alaska printing companies. MR. FOSTER said he is aware that there is probably a certain comfort level that the division has working with a printer that has proven to do a good job. He said he works to give his clients that same comfort, and recently has succeeded in securing the ballot-printing contract for the Municipality of Anchorage. He noted that Anchorage formerly sole sourced its ballot printing out to another printer before making the decision to put the ballot printing out to bid. The municipal clerk, he said, was concerned about moving forward with a new printer, but has since found that the change was not only relatively easy, but also that the City of Anchorage has benefitted by paying less for its ballots. He relayed that his company has printed ballots for the Municipality of Anchorage from 2005-2007, considered by Diebold to be among "the most difficult ballots in the nation." He said the municipality has put a new contract out for bid this year. Mr. Foster said, "I'm certain that the ... Division of Elections would develop a fine working relationship with any printing company that would be awarded the contract." MR. FOSTER said some might claim that the complexity of the State of Alaska ballots is reason enough to leave things the way they are, but he emphasized that nothing is further from the truth. The task of printing a few hundred thousand ballots would be daunting for some small shops, but those shops would not bid on the project. There are many companies in the state that are fully capable of handling the volume of work in the time required, including the packaging and shipping logistics, he said. The ballots require careful imprinting and packaging, but are otherwise easy to produce - nothing beyond the scope of many jobs produced by dozens of Alaska printing companies each year. He said another concern is that the Division of Elections could be bogged down putting ballots out to bid every two years. Mr. Foster recommended that each bid be awarded for one election cycle, with "a performance option for a second." 9:51:00 AM MR. FOSTER stated that opening the election ballot to competitive bid would have a variety of positive effects, including the likely savings of a substantial amount of money. The level playing field, he said, would open the door for more Alaska printing companies to be involved, which would in turn give those companies the opportunity to upgrade their facilities and improve their standing in both the industry and the state. Furthermore, the state would not have to put all its eggs in one basket by relying on a single printing company. 9:52:26 AM GAIL FENUMIAI, Director, Central Office, Division of Elections, Office of the Lieutenant Governor, explained how HB 406 would impact the division's business practices. Prior to 2002, the division had ballots printed by a company other than the current vendor - a company outside of Alaska. She said the division is thankful to have its ballots printed inside the state now, because doing so alleviated many of its concerns regarding getting ballots delivered on time, as well as other issues. MS. FENUMIAI stated that ballots are the most important aspect of conducting an election. The ballot printing process is complex and requires a vendor that needs to know the processes of the division and its timelines in order for the job to be done correctly. If ballots are printed incorrectly and not received on time, the result could be a disenfranchisement of voters and an impairment of the division. Ms. Fenumiai emphasized the importance of the report and of trust gained by working with a vendor. She said the vendor needs to be willing to stick with the division in the instance where something may go wrong. She offered an example when, in 2004, the court required ballots to be reprinted due to an initiative ballot language summary, and the division's current vendor worked around the clock and was able to get the ballots reprinted and delivered on time, so that the general election was able to proceed as it was supposed to according to statute. MS. FENUMIAI relayed that the division follows the competitive bid process for everything else it is required to do, for example, purchasing envelopes, tally books, and the official election pamphlet. She stated, "This is one area that we feel is very, very difficult ...." She said she would give the committee a timeline of statutory requirements that make a competitive bid process impractical. 9:55:06 AM MS. FENUMIAI stated that the only competitive bid process she is aware of is what is referenced in the procurement code, which she said she believes is a 21-day, competitive, sealed bid process. She said there is some time allowed for a protest period. She related that although she is not personally familiar with the procurement code, Vern Jones, the state's chief procurement officer, was available to answer questions. She continued: The division has very tight statutory deadlines. Moving to a competitive bid process raises concerns that the required timelines couldn't be met. There are 22 days from the date the ballot is certified for the primary election to the date the ballots need to be issued in our offices. 9:56:04 AM VICE CHAIR ROSES asked Ms. Fenumiai if she has observed a significant difference between a ballot on the day it is certified and the same ballot several weeks before that. MS. FENUMIAI said she does not recall, but she offered to find out and get back to the committee with an answer. She continued: For the general election, the timeline gets even tighter; there are 16 days from the date [on] which the ballot is sent to the printer and the date [on] which the ballots have to be back in the division's offices ready for distribution. And a lot of that is contingent on when the primary election is certified, because obviously we can't send the ballot to the printer until the primary is certified. The division is also concerned that the lowest bidder may not also be the best bidder. There is a lot that goes on other than just putting a template on a printer and printing ballots out. The printer tests ballots to make sure that the tiny marks and the fold marks - the cut marks - are properly done. So, it is more than just a simple copying job, for lack of a better word. There's accountability involved. And also, at the same time, many counties throughout the nation are printing ballots, and ballot printers need to know ahead of time if they're going to need to order ballot paper, because there are literally thousands in the nation that will be printing ballots for a general election in November. 9:58:12 AM MS. FENUMIAI, in response to a series of questions from Representative Doll, said to the best of her knowledge there have been no problems related to the present vendor and she does not feel that the division has been dictated to by that vendor. She said the division tells the printer what, how much, and when it needs in terms of ballots, and she said to the best of her knowledge the timelines have always been met by the current vendor. The division decided in 2002 to find out if there was any printer in the state of Alaska that would be qualified to print ballots. At that time, Diebold required ballot printers to be certified, and Print Works in Homer had gone through that certification process. The division toured the plant, met the owner, and felt comfortable that the business understood and could meet the division's needs, concerns, and deadlines. She concluded, "Ever since then, things have been fine." 9:59:54 AM MS. FENUMIAI explained that the length of the ballot can change, but the width remains the same. In response to a follow-up questions from Vice Chair Roses, she confirmed that creasing and folding issues can differ with the size of the page. At the time the division would put out a bid spec for ballots, she said, it "would not have a genuine, true idea if a ballot was going to be an 8 1/2 by 11-inch ballot [or] an 8 1/2 by 14-inch ballot until much closer towards the election." 10:00:27 AM VICE CHAIR ROSES asked if the bidding process would prevent the division from getting a "variegated bid" that would allow the printing companies to submit a different bid for each of the possible ballot sizes. MS. FENUMIAI deferred to Mr. Jones. 10:02:01 AM REPRESENTATIVE JOHNSON said he has spent some time in the printing business, and he suggested that it may be efficient for individual printers to "just buy the bigger paper" and cut it to size. 10:02:30 AM VERN JONES, Chief Procurement Officer, Central Office, Division of General Services, Department of Administration, said during the bidding process what needs to be known, regarding paper used, is "the mix of how much of each size and what the price would be" in order to come up with an accurate total. He said, "Representative Johnson's solution would probably be much easier to implement than simply getting pages per different price, because you wouldn't know what the mix would be to know who would actually be cheaper until the last minute, and that would be too late." 10:03:31 AM REPRESENTATIVE JOHANSEN asked, "Can you make, basically, a deal that for this election cycle this company's going to ... be the printer, and then deal with the deadlines on it?" MR. JONES said he generally is an advocate of competition; therefore "this" is a bit of a departure for him. He explained: It's not so much the time built into the procurement code, because the procurement code doesn't apply here, but just practically how much time they have - given the information they have when they have it - to get a bid out, to get the product - the stock ship by the vendor, I understand takes a couple of months, to get the testing done - they have to have preliminary bids in and ... all the machines have to be tested on the ... ballots that come back well before they're ready. Gail mentioned reprints, as well. There's shipping time - once the printer has its job done, they have to be shipped to all different areas of the state. So, it's not so much the time that the procurement takes, as ... the very restricted amount of time that the division has once they know what needs to be printed. And again, that's not any reflection on the capabilities of the printers out there. I don't think the division's made the leap that the printer they're using is the only one that can do the job; it's just that the time involved to actually effect the competition is very tight, and I would probably venture to say that in some instances, in some election cycles, it's definitely not practical to take that time to go out and get the competitive bidding that's required. Something else I'd like to mention is that while the bill doesn't subject the printing of the ballot to the procurement code, it's silent on a number of issues that the procurement code would probably be used to step in and fill in the blanks. For example, there's no ... protest provisions in the bill, so we would likely look to the protest provisions of the procurement code to fill in. Those ... entail giving the vendor ten days after an award is made to protest. And then there'd be the time necessary to respond to the protest. 10:07:02 AM MR. JONES said it is probably very important to have a comfort level with a printer. That doesn't necessarily mean there is only one printer involved, but there are other factors to consider. He opined that "if this were going to be competed," a request for proposals (RFP) would be what "you'd want," rather than a bid process. He explained that with an RFP, the state would be able to examine a printer's experience, history, capability, physical plant, and perhaps financial credentials. He stated, "This speaks against the bill, because an RFP is an even longer procurement process than a bidding process." He continued: If the bill simply said we want to subject the printing and ballots to the procurement code, there would be much more flexibility there. The procurement code has any number of procurement methods available and exceptions, like limited competition procurements, and so on. Now, I'm not suggesting that that be done, I'm just saying that there would be a lot more flexibility if that were the case. 10:08:20 AM REPRESENTATIVE JOHANSEN asked if one company can be chosen for a specific election rather than undergoing another bid or process "every time you turn around." MR. JONES responded that it would be possible to do so; however, the information that would be necessary in order to be able to fairly evaluate "one versus the other" would depend on the information that the division gets, and "it doesn't get it until ... 18 days before the ballots are needed to be in hand and ready to be voted on." 10:10:19 AM REPRESENTATIVE JOHNSON asked if there is any language in the proposed legislation that would prevent the division from issuing a competitive bid process, effective in 2010, which would apply for the next five years, and repeat the process every five years thereafter. He said he thinks it would be ill- advised to try to put a bid out for every election, but supports the idea of contracts every five to seven years. He stated, "Sixteen days in the printing world is a lifetime," thus, the time frame does not concern him, but quality control does. He said he could name a half dozen printers who could print ballots for the state. He said he doesn't know if they could do it for a better price than the printer the state currently uses, but he doesn't think the division knows that answer either, which is the purpose of [the bill]. He said the state could make a test run be a requirement of the bid process. MR. JONES said there is nothing in the language of the bill that would prevent that from happening. He suggested that "a bid may not be the appropriate vehicle for printing a ballot in this case." REPRESENTATIVE JOHNSON said perhaps the RFP process would apply. He said there is a system by which the state could allow a competitive process to "enter our election" without jeopardizing the quality of that election. He said he thinks the bill needs to be considered more closely. He said, "There is nothing that should keep this from happening, and quite honestly, I don't know why the Division of Elections hasn't done it anyway." He said he thinks the state is probably spending more than necessary for its ballots. 10:14:18 AM MS. FENUMIAI responded that timing is an issue. She said there are a lot of intricacies involved with printing ballots. A significant amount of testing is done at the printer's shop and at the Division of Elections to ensure that the ballots record votes properly in the optical scan units. VICE CHAIR LYNN asked if Representative Johnson's suggestion of a rotating bid would allow "time for that to take place and still have a competitive process." MS. FENUMIAI replied that she believes it would be a better process than getting bids every two years. 10:15:33 AM REPRESENTATIVE JOHANSEN asked how often the layout and the face of the ballots actually change. MS. FENUMIAI responded that the ballot would be on same type of paper each year; only the names and races would change, along with the length of the ballot. In response to a follow-up question from Representative Johansen, she said the placement of the names of candidates and the ovals that are placed next to each name shift with each ballot. REPRESENTATIVE JOHANSEN said he would like to know how much the cost of printing ballots has increased in the last six to eight years. MS. FENUMIAI noted that, according to available records, the 2004 [primary] ballots totaled $156,229.25; general election ballots for 2004 cost $264,546.28; and the reprinting of [the general election] ballots for 2004 cost $235,802.87. The 2006 primary ballots cost $181,632.00; the 2006 general election ballots cost $205,773.75. In response to Representative Johnson, she explained that there had been a court order that mandated the ballot summary language be changed on one of the initiatives, which required every single 2004 general election ballot to be reprinted. The prices fluctuate because of quantity, size of the ballot, and paper [length], she noted. 10:18:48 AM MS. FENUMIAI, in response to a question from Representative Doll, offered more details regarding the certification process previously required by Diebold. 10:19:50 AM JASON HOOLEY, Special Assistant/Legislature, Office of the Lieutenant Governor, testified regarding the practical aspects of HB 406. He stated that the Office of the Lieutenant Governor supports competition; however, the flexibility afforded by current statute has not led to a situation without standard or lacking oversight. Conversely, that flexibility has allowed the division to explore a number of areas that have led to quality assurance and security measures that have served the division well. That said, he reported that the Office of the Lieutenant Governor does not oppose bill, but asks that the committee continue to work with the division to address the practical concerns articulated by Ms. Fenumiai and Mr. Jones. 10:21:03 AM VICE CHAIR ROSES closed public testimony, but said he may reopen testimony for Mr. Fraley if he is available to testify at the next committee hearing on HB 406. [HB 406 was heard and held.]
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