Legislature(2021 - 2022)BUTROVICH 205
04/27/2021 03:30 PM Senate STATE AFFAIRS
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| Audio | Topic |
|---|---|
| Start | |
| SB117 | |
| SB91 | |
| SB92 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| *+ | SJR 12 | TELECONFERENCED | |
| *+ | SB 117 | TELECONFERENCED | |
| + | SB 92 | TELECONFERENCED | |
| + | SB 91 | TELECONFERENCED | |
SB 117-PROCUREMENT; CONSTRUCTION; CONTRACTS
3:40:33 PM
CHAIR SHOWER announced the consideration of SENATE BILL NO. 117
"An Act relating to the state procurement code; establishing the
construction manager general contractor procurement method; and
providing for an effective date."
He listed the invited testifiers.
3:41:11 PM
MIKE LESMANN, Legislative Liaison, Department of Transportation
and Public Facilities (DOT&PF), Juneau, Alaska, stated that the
purpose of the bill is to grant the department the authority to
write regulations for the existing process between DOT&PF and
its contractors. SB 117 seeks to amend the state's procurement
code under AS 36.30 by codifying the department's current
practice of using the construction manager general contractor
(CMGC) construction contracting method.
MR. LESSMANN explained that the CMGC contracting method has a
two-phase contract that allows the same contractor to provide
construction related services during both preconstruction and
the construction phase of a project. While the existing state
procurement law does not offer this procurement method as a
specific option, the department has been using CMGC under the
innovative procurement guidelines in AS 36.30.308.
MR. LESSMANN reported that CMGC has been used for the last 15
years in Alaska for public facility projects, federal aid
highway and bridge projects, and new vessel construction. This
contracting method is recognized in the Federal Highway
Administration regulations and is a commonly accepted practice
in the construction industry. DOT&PF's experience is that CMGC
can decrease contractor change orders, decrease administrative
delays, and leverage resources to improve Alaska's
infrastructure.
MR. LESSMANN advised that should this become law, the department
will collaborate with stakeholders to adopt the regulations
needed to further refine and standardize the CMGC contracting
method in Alaska.
3:45:27 PM
SENATOR KAWASAKI highlighted that the fiscal note analysis
indicates that the CMCG contracting method has been used for
just 20 projects over the past 15 years. He asked why it had
been used for so few projects and how the department expects
that to change should the bill pass.
MR. LESMANN answered that it is not right for every project, but
it is a tool for the department to use. He deferred further
comment to Mr. Lund who has experience using the CMGC
contracting method.
3:46:58 PM
MIKE LUND, Construction Engineer, Northern Region, Department of
Transportation and Public Facilities (DOTPF), Fairbanks, Alaska,
explained that CMGC is a procurement tool that involves a
contractor, prior to committing to costs, giving input into the
phasing of a project. This is not needed on all projects that
are done on a regular basis, but sometimes it is to the state's
advantage and the public interest to do so. The department has
been successful in using CMGC under the innovative procurement
statute.
CHAIR SHOWER asked for examples of projects that would use CMGC.
MR. LUND explained that this method is generally used for more
complex projects. He cited University Avenue in Fairbanks that
involved complex phasing and staging with underground and
overhead utilities, and the Kivalina School site access road
that involved complex logistics to get materials and heavy
equipment to rural Alaska. He said it is heavily used and useful
in the vertical construction industry. Using the CMGC process on
the UAF engineering building allowed flexibility for the project
to shut down when there were fiscal constraints and restart
without contract closure and a lengthy claims process.
SENATOR KAWASAKI summarized that DOT&PF uses the innovative
procurement code to get a construction manager general
contractor. He asked why the CMGC method has not been used more
frequently since it has been available under the innovative
procurement statute.
MR. LUND agreed with the summary. Responding to the question, he
explained that the innovative procurement statute effectively
allows the department to use CMGC to partner with the local
contracting community, but it is on an ad hoc basis. It is
difficult to develop regulations and adopt overriding policies
without codifying the process.
SENATOR KAWASAKI asked how the department would select the best
contractors.
MR. LUND answered that while there is a price component to the
process, the contractor is selected based on qualifications
CHAIR SHOWER asked for the sectional analysis.
3:55:02 PM
MR. LESMANN paraphrased the following sectional analysis for SB
117 [original punctuation provided]:
Section 1. AS 36.30.200(c) is amended to add CMGC
(Construction Manager/General Contractor). This
section ensures that the Department only uses the
contracting method on appropriate projects by
requiring that the Commissioner of Transportation and
Public Facilities first determine that doing so is
advantageous to the State.
Section 2. AS 36.30.250 is amended to add the
Department may exclude price criteria when awarding a
preconstruction services contract under the CMGC
contracting method.
Section 3. AS 36.30 is amended to add a new section AS
36.30.309. This section is the operative provision of
the CMGC bill. It identifies the CMGC method as
requiring a two-phase contract: one contract for
preconstruction services and another for construction
services. The Department awards the construction
services contract only if the parties can reach an
agreed price for construction services for a specific
project scope and schedule. If the parties cannot
reach an agreed price, the Department may contract
with another contractor for construction of the
project using any other contracting method under the
procurement code.
Section 4. AS 36.30.990 is amended to add the
definition for "preconstruction services".
Section 5. Authorizes the Department to adopt
regulations that further implement the Act.
Section 6. This section specifies that Section 5 takes
effect immediately.
3:57:30 PM
CHAIR SHOWER found no questions and opened public testimony on
SB 117.
3:57:50 PM
CHARLES MCKEE, representing self, Anchorage, Alaska, testified
off topic during the hearing on SB 117.
CHAIR SHOWER asked if he supported or opposed SB 117.
MR. MCKEE said he supported it and then asked the committee to
understand that there was no statute of limitations for slander.
4:01:44 PM
ALICIA SIIRA, Associative General Contractors of Alaska (AGC),
Anchorage, Alaska, stated that AGC supports having CMGC as an
alternative project delivery method for DOT&PF. It has been used
in Alaska for decades. AGC believes that CMGC can be a great
tool when properly used and prepared. However, it is not the
only tool and when it is used there should be ample review to
ensure the best value for the state. She offered her belief that
codifying the CMGC procurement process will benefit the
construction industry and the state. It would allow the
department to use the CMGC process without having to submit an
innovative procurement request to multiple agencies for each
project. She said SB 117 will modernize, clarify, and improve
the state's procurement process and align Alaska with the
majority of other states. It will also allow the construction
industry to have a voice in developing regulations, which will
remedy concerns about consistency in the use of CMGC projects.
She asked that AGC be given a seat at the table throughout the
regulatory process. She said AGC looks forward to sharing the
list of best practices it has compiled.
CHAIR SHOWER asked if AGC would like to see any changes to the
bill.
MS. SIIRA replied they have suggested language changes but
nothing substantial.
CHAIR SHOWER suggested she send the suggestions to
ssta@akleg.gov.
4:05:04 PM
SARAH LEFEBVRE, representing self, Fairbanks, Alaska, stated
that she has worked in the construction industry in civil
contracting for 23 years. She agreed with Ms. Sirra's comments
and said the bill will ensure that CMGC will be applied more
consistently across the three DOT regions. She noted that this
has been a concern to the contracting community on past
projects. She referenced Senator Kawasaki's question and offered
her experience that each CMGC has progressed in a silo and the
lessons learned have not necessarily been applied in subsequent
projects and procurements. She offered her belief that having
the CMGC procurement method in statute allows the department to
establish clear regulations and eventually implement a
consistent CMGC handbook. She said that industry partners look
forward to participating in this process to help improve the
application of CMGC in Alaska. She suggested that the CARES Act
and federal infrastructure packages offer an opportunity for
DOT&PF to get future year projects onto the street. CMGC could
be a valuable tool to fill the gap left by accelerated project
funding. She said she is an ADC member, and her company has
minor edits for the bill that she would submit to this committee
and the Transportation Committee. She noted that the edits had
been vetted by department staff.
CHAIR SHOWER said he would appreciate receiving the documents.
4:07:43 PM
CHAIR SHOWER closed public testimony on SB 117 and advised that
written comments would be accepted at ssta@akleg.gov.
4:08:21 PM
CHAIR SHOWER held SB 117 in committee.
| Document Name | Date/Time | Subjects |
|---|---|---|
| SB 117 Bill v.A.A |
SSTA 4/27/2021 3:30:00 PM |
SB 117 |
| SB 117 fiscal note.pdf |
SSTA 4/27/2021 3:30:00 PM |
SB 117 |
| SB 117 Sectional Analysis 3.31.2021.pdf |
SSTA 4/27/2021 3:30:00 PM |
SB 117 |
| SB 117 Sponsor Statement.pdf |
SSTA 4/27/2021 3:30:00 PM |
SB 117 |
| SB 91 Version 32 GS1576 I.PDF |
SSTA 4/27/2021 3:30:00 PM |
SB 91 |
| SB 91 Transmittal Letter.pdf |
SSTA 4/27/2021 3:30:00 PM |
SB 91 |
| SB 91 Summary of Changes- 32 GS1576 I .pdf |
SSTA 4/27/2021 3:30:00 PM |
SB 91 |
| SB 91 Sectional Analysis Version 32 GS1576 I .pdf |
SSTA 4/27/2021 3:30:00 PM |
SB 91 |
| SB 91 Fiscal Note DPS.pdf |
SSTA 4/27/2021 3:30:00 PM |
SB 91 |
| SB 91 Fiscal Note DHS.pdf |
SSTA 4/27/2021 3:30:00 PM |
SB 91 |
| SB 91 Fiscal Note COR.pdf |
SSTA 4/27/2021 3:30:00 PM |
SB 91 |
| SB 92 Sectional Analysis v. A 04.07.21.pdf |
SSTA 4/27/2021 3:30:00 PM |
SB 92 |
| SB 92 Sponsor Statement 04.07.21.pdf |
SSTA 4/27/2021 3:30:00 PM |
SB 92 |
| SB 92 HSS Fiscal Note 04.07.21.pdf |
SSTA 4/27/2021 3:30:00 PM |
SB 92 |
| SB 92 DPS Presentation 04.27.21.pdf |
SSTA 4/27/2021 3:30:00 PM |
SB 92 |
| SB 92 DPS Fiscal Note 04.07.21.pdf |
SSTA 4/27/2021 3:30:00 PM |
SB 92 |
| SB 92 Additional Statistics.pdf |
SSTA 4/27/2021 3:30:00 PM |
SB 92 |
| SB 31 - Sectional Analysis.pdf |
SSTA 4/27/2021 3:30:00 PM |
SB 31 |
| SB 31 - Sponsor Statement.pdf |
SSTA 4/27/2021 3:30:00 PM |
SB 31 |
| SB 31 Bill v.A.A |
SSTA 4/27/2021 3:30:00 PM |
SB 31 |
| SB 92 DPS Presentation REVISED.pdf |
SSTA 4/27/2021 3:30:00 PM |
SB 92 |