Legislature(1995 - 1996)

03/28/1996 03:40 PM Senate STA

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
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       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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