Legislature(1995 - 1996)
03/28/1996 03:40 PM Senate STA
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* first hearing in first committee of referral
+ teleconferenced
= 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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