Legislature(2007 - 2008)CAPITOL 106
03/13/2008 08:00 AM House STATE AFFAIRS
| Audio | Topic |
|---|---|
| Start | |
| HB406 | |
| HJR19 | |
| HJR38 | |
| HJR19 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| *+ | HJR 19 | TELECONFERENCED | |
| *+ | HJR 38 | TELECONFERENCED | |
| *+ | HJR 37 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| += | HB 406 | TELECONFERENCED | |
HB 406-COMPETITIVE BIDDING FOR BALLOT PREP 8:07:54 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, adopted as a work draft on 3/6/08, was the committee substitute (CS), Version 25-LS1487\C, Bullard, 2/28/08.] 8:08:05 AM REPRESENTATIVE COGHILL moved to adopt the committee substitute (CS) for HB 406, Version 25-LS1487\E, Bullard, 3/11/08, as a work draft. There being no objection, Version E was before the committee. 8:08:23 AM REPRESENTATIVE ANNA FAIRCLOUGH, Alaska State Legislature, reviewed the changes incorporated into Version E. She noted that after the prior bill hearing, she had discussed the concerns of the committee with [Gail Fenumiai], the director of the Division of Elections, and Vern Jones, the chief procurement officer for the Division of General Services, and she offered her understanding that there is now concurrence regarding the issues of timing and the exclusion of the ballot bidding process outside of the procurement code. REPRESENTATIVE FAIRCLOUGH reviewed that Representative Coghill's concern had been that following the procurement procedure, in relation to ballots, would be an arduous process, especially in terms of special elections. She reviewed that Representative Doll wanted to know if there would be an additional cost involved in doing a request for proposal (RFP), and she said the director of the Division of Elections thinks since Version E would allow a competitive bid process under a bidder proposal, there would be no increase in fiscal obligations for the division. 8:10:25 AM REPRESENTATIVE FAIRCLOUGH, regarding the certification process, said she has not heard back from Premier Elections [Solutions] - formerly Diebold [Election Systems] ("Diebold"), and before that Global Election Systems; however, she said it is rumored that when the original developer of the hardware had proprietary provider options on the balloting, it developed the certification process so that no one else could compete against those who were building and selling the hardware. She deferred to Ms. Fenumiai for an update on that matter. 8:10:49 AM GAIL FENUMIAI, Director, Division of Elections, Office of the Lieutenant Governor, said she spoke with a representative from Premier Election [Solutions] about the printer certification process and was informed that it was started as a courtesy to customers. When optical scan technology was brand new, customers were concerned about printers being able to print the ballots properly so that they would be able to be fed into the AccuVote units and read properly. However, the company became too big and it was no longer economically feasible for them to continue that process, and it was not something that was required of Premier Election [Solutions]. Additionally, Premier Election Solutions purchased a printing company and determined it had a conflict of interest. That, she concluded, is the reason that the certification of printers ceased. REPRESENTATIVE FAIRCLOUGH added that Alaska state law does not require the certification; it is a quality measure. She indicated that one of the reasons that she chose the RFP process versus the bid process in Version E was based on testimony of "the current provider" that the points of utmost importance would be outlined through the RFP process. MS. FENUMIAI confirmed that's correct. She added that the proposal process would allow the division to consider factors other than just the lowest bid. 8:12:49 AM REPRESENTATIVE FAIRCLOUGH reviewed that Representative Johnson, at the last bill hearing, had suggested five years for the length of time an individual printer would be awarded the state's contract for ballot printing; however, she said one year is better, because the state can hold the printer accountable for performing in a timely manner, as well as for producing the quality work necessary. Furthermore, she said the Division of Elections would offer the bid in an "off year" to ensure that a printer can perform before the general election year arrives. 8:13:47 AM MS. FENUMIAI confirmed that's correct. 8:13:52 AM REPRESENTATIVE FAIRCLOUGH, in response to a question from Representative Doll, said the division would ensure the quality of the ballot. She spoke of printers that are showing what they can provide, noting that Anchorage has a competitive bid process already. REPRESENTATIVE DOLL remarked, "You can follow written specifications, but unless you go through a testing, it may not work." 8:15:56 AM MS. FENUMIAI offered her understanding that under the current process, as the printer runs official ballots, those ballots are run through a testing process to make certain the "timing" marks are in the correct places and that the folding marks do not infringe on them. She said the division would ensure that testing procedures were in place for that. REPRESENTATIVE FAIRCLOUGH clarified that the one-year process would include multiple years of renewal options to be determined at the proposal. 8:16:46 AM VICE CHAIR ROSES asked if the option would be designed only as one exercised by the state or if it would also be exercised by the printer. REPRESENTATIVE FAIRCLOUGH responded it would be determined in the RFP whether the printer wanted to "be under the state's specification." 8:17:13 AM REPRESENTATIVE DOLL asked the bill sponsor to clarify what the new language is on page 4, [lines 2-5], which read as follows: Sec. 15.15.031 Contracts for the preparation of election ballots. (a) Except as provided in (b) of this section, the director shall award a contract for the preparation of election ballots to the most advantageous offeror whose proposal conforms in all material respects to the requirements and criteria set out in the request for proposals. REPRESENTATIVE FAIRCLOUGH said the new language is "advantageous offeror", which is a term of art in procurement code. 8:18:05 AM VERN JONES, Chief Procurement Officer, Division of General Services, Department of Administration, explained that "advantageous" is used to mean "the proposal deemed most beneficial to the state through evaluation criteria that's published in the RFP." 8:18:57 AM MR. JONES, in response to Vice Chair Roses, confirmed that when HB 406 first surfaced, it proposed a low bid takes all situation, which caused him concern regarding ambiguities of timing in relation to procurement code requirements for bid circulation time, protest period, and official written notice. He said he thinks the changes made in Version E address some of those concerns. For example, Version E would allow a number of factors to be listed in addition to price so that the state could look for a printer that would produce the best quality and value. He said, "I am also convinced that given the timing and the plan to have term contracts in lieu of individual, yearly, or election-cycle contracts, ... the division will be able to go out with enough time, get a contractor on board, and meet their time frame." 8:20:48 AM REPRESENTATIVE FAIRCLOUGH noted that the term, "Alaska product" is defined in Version E, beginning on page 4, line 28. In response to a question from Representative Gruenberg, she referred to language [on page 4, within lines 6-8], which read as follows: (b) The director shall award a contract based on solicited proposals to the most advantageous, responsive, and responsible offeror after an Alaska offeror preference of five percent and an Alaska product preference of seven percent. REPRESENTATIVE FAIRCLOUGH stated her intent that Alaskans get awarded the contract. However, she noted that currently in Alaska there is only one printer that has an Alaska product certificate, and it is not the current printer. She said she was assured by Kevin Fraley, who is the current printer, "that he had been an Alaska product provider before and had that certificate." Representative Fairclough said the certificates are issued, at no charge, by the Department of Commerce, and established a number ranking for how much of a printer's service is made in Alaska. She reiterated that she is trying to make certain Alaska contractors are awarded printing bids from the State of Alaska. She added, "So, that's why I support that preferential in this product." She suggested Mr. Jones may have a differing opinion on the subject. 8:23:04 AM MR. JONES said he supports the sponsor's intent to ensure the job goes to an Alaskan firm. He said he thinks it almost has to because of the logistics involved, and he mentioned that there is a lot of shipping to many sites. He related that his only reservation with an Alaska product preference is that, as the sponsor noted, there is currently only one vendor who has that certificate; all the others living in Alaska and presumably qualified would certainly qualify to obtain that preference. He explained his concern has to do with the timing it takes for the Department of Commerce to qualify a firm and put it on a list that is only published twice a year. A new printer may start work in the state and miss the publishing cycle and not qualify in time for preference. The result, he indicated, could be that one Alaskan firm could be distinguished over another. Mr. Jones suggested the committee consider "eliminating that preference and simply increasing the Alaska bidder preference." He concluded, "It would have the same effect, and the printers wouldn't have to go through this ... process, which I guess, in my opinion, if you're in Alaska, if you're printing, I don't know what ... purpose that serves." 8:25:03 AM MR. JONES, in response to a question from Representative Gruenberg, said he knows of no legal opinions about the product preference, whereas he said he thinks the bidder preference has been vetted several times and has survived the lawsuits. In response to a follow-up question from Representative Gruenberg, he said the "offeror" would be the person who submits a proposal. REPRESENTATIVE GRUENBERG remarked that the aforementioned 5 and 7 percent are so substantial, the result may be to "knock anybody else out," particularly if there is only one firm that qualifies. He expressed concern about whether, in the event of a lawsuit, an administrative law judge would consider "the constitutionality of this" or whether "it would have to go up on an appeal to the [Alaska] Superior Court and then the [Alaska] Supreme Court," which could slow the process down considerably and also increase the cost. He added, "... I don't know that we want to push the envelope, at least right away on this." 8:26:42 AM REPRESENTATIVE FAIRCLOUGH said "Alaska product" is defined in AS 36.30.338. REPRESENTATIVE GRUENBERG pointed out that Version E refers to a definition of "Alaska product" [from AS 36.30.338(2)], which differs from the definition of "Alaska product" found in [AS 36.30.338(1)], as follows: (1) "Alaska product" means a product of which not less than 25 percent of the value, as determined in accordance with regulations adopted under AS 36.30.332(a), has been added by manufacturing or production in the state; REPRESENTATIVE FAIRCLOUGH stated her disagreement, adding that the [statute] referenced on line 30 of Version E refers to that subsection. REPRESENTATIVE GRUENBERG highlighted that [the statute] is only [referenced] in [subparagraph] (A). "Then you have to add [subparagraphs] (B) and (C). Those are not in the current definition as I read it," he said. REPRESENTATIVE FAIRCLOUGH clarified, "We did not define 'product' or 'recycled Alaska product'; that's under the certification that if anyone got the certification that they would go through." REPRESENTATIVE GRUENBERG said the terms "produced or manufactured" are defined in the current statute. He then pointed out that the statute referenced, AS 36.30.338, only refers to [paragraph] (2). He suggested distributing this statute to the committee members as he read it as a different definition. Paragraph (2) of AS 36.30.338 read: (2) "produced or manufactured" means processing, developing, or making an item into a new item with a distinct character and use through the application within the state of materials, labor, skill, or other services; 8:29:20 AM REPRESENTATIVE FAIRCLOUGH said Legislative Legal and Research Services prepared the language "to be Alaska product that would fall under the certification under the Department of Commerce ..., and if it doesn't meet that I'm happy to amend it to do that." REPRESENTATIVE GRUENBERG reiterated that the definition presented in Version E is different than the existing definition. He asked Mr. Jones if he concurred. MR. JONES answered that he wasn't sure since the bill references that statute. MR. JONES related that although there are two preferences, which total 12 percent, the way the RFP works, cost is not going to be 100 percent. He said the preferences act on cost. He stated, "So, for example, if the evaluation factor for cost was 50 percent, these preferences would, in essence, equate to a 6 percent advantage to an Alaskan firm." 8:30:54 AM REPRESENTATIVE JOHNSON said a printer who is chosen by the state would have a considerable investment in printing ballots; therefore, he recommended the contract term be made as long as possible. Doing so, he said, would save money and ensure quality. 8:33:05 AM MR. JONES, in response to a question from Representative Doll, explained that the term "advantageous" is a term of art used across the country and probably listed in Black's Law Dictionary. He noted that "responsive" and "responsible" are procurement terms either defined in statute or regulation. 8:35:18 AM REPRESENTATIVE GRUENBERG asked for the definition of the word "staffed" on page 4, line 14. He said even if a business was in the state, its staff may not be. 8:36:01 AM MR. JONES replied that the phrasing is "from the existing Alaska bidder preference in statute," and is interpreted to mean that the firm has a physical presence in the state, with employees doing the work on site. It does not include a person renting a suite and Post Office box and having phones answered out of state. REPRESENTATIVE GRUENBERG said he wants to establish that ["staffed"] and "advantageous" are terms that, although not familiar to everyone in the legislature, are defined by the agency's common law. MR. JONES responded, "We've certainly had many numerous protests and appeals and lawsuits using the RFP with that language ... contained in it." 8:38:33 AM REPRESENTATIVE GRUENBERG said he does not want any legal problems regarding [the definition of "Alaska offeror" and "Alaska product"], on page 4, line 9,. REPRESENTATIVE FAIRCLOUGH said she would be happy to make a request of Legislative Legal and Research Services to "clarify the intent of the difference in the language." REPRESENTATIVE GRUENBERG said he would leave that to the discretion of the bill sponsor. He said he does not have a problem with moving the bill. 8:39:44 AM REPRESENTATIVE JOHNSON moved to report the committee substitute (CS) for HB 406, Version 25-LS1487|E, Bullard, 3/11/08, out of committee with individual recommendations and the accompanying fiscal notes. There being no objection, CSHB 406(STA) was reported out of the House State Affairs Standing Committee.
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