Legislature(2007 - 2008)CAPITOL 106
03/11/2008 08:00 AM House STATE AFFAIRS
| Audio | Topic |
|---|---|
| Start | |
| HB406 | |
| HB396 | |
| SB253 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | HB 406 | TELECONFERENCED | |
| *+ | HB 396 | TELECONFERENCED | |
| + | SB 253 | TELECONFERENCED | |
| + | TELECONFERENCED |
HB 406-COMPETITIVE BIDDING FOR BALLOT PREP 8:08:53 AM VICE CHAIR ROSES announced that the first 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." [Before the committee as a work draft was the proposed committee substitute (CS) for HB 406, Version 25-LS1487\C, Bullard, 2/28/08.] 8:11:53 AM VICE CHAIR ROSES reopened public testimony [closed on 3/6/08]. 8:12:56 AM KEVIN FRALEY, General Manager, Print Works; Owner Print Works Super Software, Inc., stated that he has printed the state's ballots for the last three to four election cycles. He referred to his written testimony [in the committee packet] and clarified that he is not accusing anyone of impropriety. He stated, "I don't have any kind of evidence to push an agenda like that. I want to stand on my own record and my own quality and ... my own passion for doing a good job with the election process." MR. FRALEY said he feels that he is under attack, but recognizes that that may be unfounded. He emphasized that his biggest concern "is that we are talking about two vendors." He said the company that did certifications no longer offers them. He said the State of Alaska is going to have to come up with some kind of certification process [printing ballots] "is not just putting ink on paper." Mr. Fraley said there are many printers in the state that have the ability to do the job; however, there needs to be a process in place that keeps the printer under check to make sure that these ballots are printed properly and that accountability is taken into consideration. He offered an example to describe the intensity of the accountability required when printing ballots, noting that one ballot picked up and set down accidentally in another pile can mean someone voting on a ballot intended for another precinct. 8:16:17 AM VICE CHAIR ROSES closed public testimony. He announced that he would allow the committee to ask questions of Mr. Fraley, Mr. Noblin, and Mr. Foster - the latter two having testified during the 3/6/08 hearing on HB 406. 8:16:38 AM REPRESENTATIVE GRUENBERG observed that in the committee packet is one substantive letter, dated 3/3/08, from Mr. Fraley, and a rebuttal letter from Mr. Foster, dated 3/7/08. He asked if those two letters "are the main documents." 8:17:20 AM MR. FRALEY confirmed that his letter expresses "his main argument and concern in opposition to HB 406." 8:17:32 AM PATRICK FOSTER, A.T. Publishing and Printing, stated that he chose the format of a letter in which to address some of the points in Mr. Fraley's letter. 8:17:53 AM REPRESENTATIVE GRUENBERG said Mr. Fraley's main concern, as expressed today, is in regard to the importance of quality. He questioned if the consideration in choosing printers would be limited only to cost if HB 406 were to pass, or if quality and security would also be considerations. 8:18:30 AM GAIL FENUMIAI, Director, Central Office, Division of Elections, Office of the Lieutenant Governor, responded that the bill, as written, would result in a bid that would be awarded strictly based upon lowest cost. REPRESENTATIVE GRUENBERG asked if that is the normal basis upon which the state considers bids. MS. FENUMIAI offered her understanding that there are a variety of bidding processes, including an invitation to bid and request for proposals (RFPs), both of which she said she believes allow other factors of consideration to be made. REPRESENTATIVE GRUENBERG asked, "But you believe this one does not?" MS. FENUMIAI replied that that's her understanding. In response to a follow-up question from Representative Gruenberg, she said she has not ascertained a legal opinion from the assistant attorney general regarding this matter; however, she said the division has consulted with Vern Jones, the chief procurement officer for the state, who she said "offered testimony to that effect at the last committee hearing." 8:20:02 AM VERN JONES, Chief Procurement Officer, Central Office, Division of General Services, Department of Administration, stated that when the department uses the term, "bids," it means a situation in which it offers specifications, and the responsible bidder that meets those specifications and responds with the lowest price is the winner. He said typically when the department wants to evaluate quality and other factors in addition to price, it uses either competitive sealed proposals or RFPs. He concluded, "My reading of this is that it does say competitive bids, and to us that means low bids award." 8:20:51 AM REPRESENTATIVE GRUENBERG directed attention to page 4, line 6, of Version C, which specifies "the lowest responsible and responsive bidder". He asked Mr. Jones if, after reviewing that language, his answer remains the same or changes. MR. JONES responded that he would maintain his answer. REPRESENTATIVE GRUENBERG asked what language Mr. Jones would suggest to ensure that the division could consider the [printer's] ability to perform in a satisfactory manner, rather than choosing a printer based solely on cost. MR. JONES suggested that the words "competitive bids", on page 2, line 2, of Version M, could be changed to "competition". VICE CHAIR ROSES offered his understanding that Representative Johnson had discussed possible language to address this issue at the last hearing of HB 406, and an amendment would be forthcoming. 8:22:48 AM REPRESENTATIVE JOHNSON asked Mr. Jones, "If we were to bring you under the procurement code, would that allow you to do the RFP and ... stretch it that way, or would we need to put in this bill that it would be by RFP?" MR. JONES answered, "That would certainly allow us to do RFPs and proposals if this were subject to the procurement code. It would be a choice at that point." In response to a follow-up question from Representative Johnson, he explained that subjecting the service to the procurement code would open up a number of possibilities. He expounded: It could be done via bid, where ... the division would specify as they needed and award based on lowest price. They could offer a request for proposals, in which they could set a number of criteria for quality and experience and qualifications and certification and so on, in addition to price. The procurement code ... also has alternate procurement types in there: single source, emergency, limited competition .... There are small procurements; if any of these jobs were to be under $50,000, it could be done under small procurements, which would be essentially getting quotes or informal proposals. 8:24:42 AM REPRESENTATIVE JOHNSON said he wants to "open it up to competitive bidding," but also wants a timing that will ensure quality. He asked if inserting language to the title regarding having bids every five years and adding a new section that would bring the process in the procurement code would still allow for a sole source contract under the procurement code. MR. JONES responded: I'm not sure what changing the title would be. Subjecting the service to the procurement code could potentially result in an alternate procurement situation, depending on the circumstances. If clearly the intent was spelled out somewhere that it would be competed, I'm sure that the division would follow that direction. 8:26:11 AM REPRESENTATIVE GRUENBERG said the suggestions for amending the bill, made by Representative Johnson, are complex, and he would like to see a written amendment. REPRESENTATIVE JOHNSON suggested making the changes conceptually. 8:27:28 AM REPRESENTATIVE ANNA FAIRCLOUGH, Alaska State Legislature, as prime sponsor of HB 406, expressed her wish that the committee hold the bill and hear it at its next meeting to give her time to work on the bill language with an attorney. She explained that she had contacted the Division of Elections, as well as the Office of the Lieutenant Governor, and was told explicitly "that they needed to be left out of the procurement code, and that's why this is written how it is." She said she would be happy to ensure "that we're under competitive bid and under the procurement code," and she thinks it is appropriate to have a five-year contract period, "with a possible renewal period for good conduct." Representative Fairclough said the bill would create AS 15.15.031, which would ensure that an Alaska printer gets the job, and she would want to secure that guarantee should the entire Section 15.15.031 be deleted from the bill. REPRESENTATIVE FAIRCLOUGH said she spoke at length with Mr. Fraley, who raises some valid points. However, she stated, "His company competes in Anchorage already for the same vote." She said she respects that Mr. Fraley is protecting an asset that he has developed, but it is possible to compete for bids with the State of Alaska. Representative Fairclough said she understands that Mr. Fraley has done an exceptional job in responding to the State of Alaska in all aspects of his performance, and she respects that and applauds it; however, she stated her belief that "that same expectation should be set for all who would want to enter into this process and understand that accountability." REPRESENTATIVE FAIRCLOUGH asked the committee members to let her know any other concerns they may have before she talks to "procurement," so that she can meet those expectations. REPRESENTATIVE ROSES said he would hear HB 406 another day to give Representative Fairclough the time she requested. He asked committee members to continue with their line of questioning. 8:30:15 AM REPRESENTATIVE COGHILL suggested that there may be issues of timing under the procurement code. He mentioned process issues that "may be more complex than you can do under this." He suggested an RFP in relation to Section 15.15.031. He said, "It would be more directive, and then kind of takes the [Office of the] Lieutenant Governor ... out of the hot seat with regard to having to make choices." He said bidding [for ballot printing] is probably quite different than any other bidding issues in the state because of the timing involved. 8:31:03 AM REPRESENTATIVE DOLL said she is interested in finding out what the additional costs in doing an RFP might be, including the time to put together the RFP and the additional staff that may be needed. 8:32:31 AM MR. JONES responded to a question from Representative Johansen as follows: If this were subject to the procurement code, single source procurement requests over $50,000 go to the chief procurement officer, so I would be making that decision. However, I believe that the situation that's gone on before, if it were subject to the procurement code, could not stand. I don't know any basis to be able to make a determination under the procurement code that this qualifies as a single source procurement. I think obviously the only reason that it's been able to be awarded the way it is, is because it's not been subject to the procurement code. So, I don't see a basis sitting here for making a ... single source award for a service like this when there are numerous companies capable of performing. REPRESENTATIVE JOHANSEN asked for clarification that Mr. Jones meant that "you couldn't just simply decide that this company was going to get it, because of the rules of the procurement code." MR. JONES said the decision would be that of the chief procurement officer, but it would have to be supported by factual evidence that documents and proves that the competitive sealed bidding or proposal process is not practical and award to a single, individual firm is in the state's best interests. He stated, "And, at least from what I've seen, I doubt that I'd be able to make those two determinations ... to satisfy the statute." 8:34:44 AM REPRESENTATIVE GRUENBERG directed attention to the second to last paragraph of the second page of a letter in the committee packet, written by Mr. Fraley, [dated 3/3/08], which read: The bottom line is that there are two certified printers in the state of Alaska to print AccuVote ballots. Premier Election Solutions is no longer certifying any new vendors for ballot printing. Passage of HB 406 will remove control from the Division of Elections for the sake of one vendor. REPRESENTATIVE GRUENBERG then directed attention to a corresponding rebuttal from Mr. Foster, [dated 3/7/08 and included in the committee packet], which read as follows [original punctuation provided]: This means only that Diebold no longer is taking $5000 from Alaskan printing companies wanting to print ballots. Now, all companies can participate in the process, not just two of us. There is available an email statement from Premier Elections Solutions that they are out of the business of certifying, but are willing to work with individual state's desiring some form of printing certification. They recognize the printing of ballots requires much more than simple ink on paper. REPRESENTATIVE GRUENBERG explained that he had read the excerpts as clarification for Mr. Fraley, and he asked Mr. Fraley if Mr. Foster is correct. MR. FRALEY said although the question is a difficult one to answer, he would have to "lean towards 'no.'" He said he spoke with Premier Elections Solutions yesterday "to clarify that statement." He continued: They did specifically work with the State of California to develop a certification process for printers in California. They would be willing, if the state was to pay a contract to Premier Elections Solutions, to develop some sort of certification process for printers in the state of Alaska. My argument is that in order for this bill to be useable in the way it's written, that process would have to be sorted out so that there is some kind of a certification system and a [qualifying] on a yearly or every-five-years basis. ... Until more printers are certified, we are still talking about two printers. REPRESENTATIVE GRUENBERG asked Mr. Foster if he would like to respond. 8:38:52 AM MR. FOSTER noted he had spoken with Michael Lindroos of Premier Elections Solutions. He said the company provides ballot readers for "20-some states," and California is the only state with which the company worked on an agreement. He stated, "I do believe that Mr. Fraley's right that some ... form of certification is required, because not just any printer can do the ballots. But I do know that it's a simple process to be worked out." He said it may involve a contract or working with Diebold; however, he said Diebold does not sound too interested in certifying individual printers. 8:40:16 AM MR. FOSTER, in response to a question from Representative Johnson, said some states print their state ballots at a county level. Some counties have the authority to single source their printing, while some "go to competitive bid." But by and large, he stated, a vast majority of states do have a competitive bidding process. REPRESENTATIVE DOLL asked if Diebold is the sole source for purchasing voting machines. 8:41:20 AM MS. FENUMIAI said Diebold is the only provider of the AccuVote optical scan voting machine used by the State of Alaska. REPRESENTATIVE DOLL asked what role Diebold plays in certification. MS. FENUMIAI said she is not familiar with the certification process for printers. She indicated that the software, hardware, and firmware that is used in the Diebold machines are certified at a federal level. VICE CHAIR ROSES proffered, "And that's for the machines themselves, but not the printing of the ballots; those are two separate issues." MS. FENUMIAI answered that's correct. 8:42:44 AM REPRESENTATIVE FAIRCLOUGH, in response to a request for clarification from Representative Gruenberg, said that after speaking with Mr. Fraley, she learned that the State of Alaska was sold hardware and told at the time of the purchase that "Diebold at the time, now Premier Elections [Solutions]" would provide a certification process for the machines and for the printers in the state of Alaska. However, since the transaction was made, the company has shut down its certification process for the state's printers. She stated her intention to call the company to find out if the state will now have to "pick up a certification process as an expense." Representative Fairclough opined that just because the state was sold "a past bill of goods that is inappropriate," that does not mean there should be no competition in the process. REPRESENTATIVE FAIRCLOUGH said she is not advocating for Mr. Fraley to lose his bid or for the other certified printer in the state to get the bid; what she is saying is that there should be competition. She stated her belief that the sole reason for [selecting a printer] should not be based on the lowest bid. She said she believes in quality assurance, but does not agree that the state should now stay with one person because that's the only person who qualified under a certification process that is no longer available. She said she has discussed the matter with Mr. Fraley extensively and thinks his company has done a remarkable job; however, "when one person only has a product to sell, it can become expensive over time." Representative Fairclough said Mr. Fraley has convinced her that during the course of time in which he has printed ballots for the State of Alaska, he has not increased his bid. REPRESENTATIVE FAIRCLOUGH stated that without certification available to other printers, the State of Alaska could be "at a disadvantage in receiving a fair price for the citizens of Alaska." She said she does not mean her remarks to be disparaging. She remarked that [Mr. Fraley] has spoken well to "all of the issues that are there," but she does not "buy into fear factor when it comes to capitalism." She said she wants Alaska to get a fair return for its money. She related that Mr. Fraley had told her his belief is that "there was liability with that certification process," and she said she does not want to expose the state to that liability. She said she would research for the facts related to this matter. 8:46:31 AM MR. FRALEY confirmed that a representative of Premier Elections [Solutions] told him yesterday that the reason the company stopped its certification process was because of liability. He said the problem specifically was that printers were lowering their standards and "they were becoming frustrated with the need to recertify because of the quality standards that were being ignored." He said one area of certification relates to a requirement to meet certain ink and registration specifications. He explained that means that an image must be printed in a certain location on the ballot on the front and back, because both sides are scanned simultaneously and the image has to line up perfectly. Another area of certification is the cutting of the ballots. The quality of the ballot and the machinery is what is certified. 8:48:14 AM REPRESENTATIVE FAIRCLOUGH, in response to a remark by Representative Johnson, concurred that the attorney general should be involved if Alaska does not have support for a system in which it has invested. 8:48:42 AM REPRESENTATIVE GRUENBERG said he thinks this problem is solvable, and he hopes the committee will allow Representative Fairclough to proceed as she has suggested rather than offering the conceptual amendment previously discussed by Representative Johnson [but not offered]. REPRESENTATIVE JOHNSON said he would not move to adopt an amendment today in deference to the bill sponsor. VICE CHAIR ROSES announced that HB 406 was heard and held.
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