Legislature(2011 - 2012)BUTROVICH 205

03/27/2012 09:00 AM STATE AFFAIRS


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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+= SB 132 PROVISIONAL DRIVER'S LICENSE STICKER TELECONFERENCED
Moved CSSB 132(STA) Out of Committee
+= HB 129 DECEASED VETERAN DEATH CERTIFICATE TELECONFERENCED
Moved SCS CSHB 129(STA) Out of Committee
+ HB 204 STATE PROCUREMENT CODE TELECONFERENCED
Heard & Held
+ Bills Previously Heard/Scheduled TELECONFERENCED
                 HB 204-STATE PROCUREMENT CODE                                                                              
                                                                                                                                
9:14:17 AM                                                                                                                    
CHAIR  WIELECHOWSKI  announced that  the  final  bill before  the                                                               
committee would  be HB 204,  which proposes changes to  the State                                                               
Procurement Code.                                                                                                               
                                                                                                                                
REPRESENTATIVE ANNA  FAIRCLOUGH, sponsor, HB 204,  introduced the                                                               
bill. She read from the following sponsor statement:                                                                            
                                                                                                                                
     HB 204 proposes changes  to the State Procurement Code.                                                                    
     It  attempts to  clarify  the  Alaska business  license                                                                    
     requirement  that  bidders   hold  an  Alaska  business                                                                    
     license. It increases the  dollar amount for thresholds                                                                    
     for small  procurements from  $50,000 to  $100,000, for                                                                    
     construction for  a small procurement from  $100,000 to                                                                    
     $200,000  and it  increases lease  space from  3,000 to                                                                    
     7,000, all  under small procurements.  This legislation                                                                    
     is an  effort to modernize procurement  policies, which                                                                    
     haven't been  amended in over twenty  years. In smaller                                                                    
     communities across Alaska it  is sometimes difficult to                                                                    
     find  lease space  or make  construction changes  under                                                                    
     the current  code. The  bill amends  the code  to allow                                                                    
     electronic  bids  and   signatures.  It  eliminates  an                                                                    
     outdated vendor's list that is  not used currently, but                                                                    
     is  mandated under  state  statutes  to be  maintained.                                                                    
     These   changes   are   intended   to   modernize   the                                                                    
     procurement system  and assist staff to  better fulfill                                                                    
     their  duties and  put their  efforts  into leases  and                                                                    
     procurements  that  require   more  detail  than  small                                                                    
     procurements.                                                                                                              
                                                                                                                                
CHAIR WIELECHOWSKI requested a sectional analysis.                                                                              
                                                                                                                                
9:16:38 AM                                                                                                                    
LAURA  PIERRE, staff  to Senator  Anna Fairclough,  explained the                                                               
sections of  HB 204.  She related that  Section 1  would increase                                                               
the threshold limit  for small procurements of  leased space from                                                               
3,000 square feet  to 7,000 square feet. She noted  that that the                                                               
statutes are outdated and this  change would help in rural Alaska                                                               
or  other communities  where  people may  feel  intimidated by  a                                                               
large procurement process.                                                                                                      
                                                                                                                                
SENATOR  PASKVAN wanted  to know  what  the process  would be  if                                                               
someone has a 7,000 square foot lease.                                                                                          
                                                                                                                                
9:18:04 AM                                                                                                                    
VERN  JONES,  Chief  Procurement  Officer,  Division  of  General                                                               
Services,   Department  of   Administration,  addressed   Senator                                                               
Paskvan's  question.  He  explained  that  there  were  different                                                               
levels of competition  for a small procurement,  depending on the                                                               
dollar amount.  He said  the current  practice in  leasing, which                                                               
will  remain unchanged,  is that  the  division would  distribute                                                               
requests for  proposals (RFP's)  to anyone  in the  community and                                                               
place the  opportunity on the  state's on-line public  notice web                                                               
site.                                                                                                                           
                                                                                                                                
SENATOR  PASKVAN asked  if there  were parameters  for the  small                                                               
procedure, such  as a maximum  duration or maximum  dollar amount                                                               
of the contract.                                                                                                                
                                                                                                                                
MR. JONES  replied that in  Section 7, the threshold  amounts for                                                               
other types  of procurements were  increased. Those  are governed                                                               
by the  dollar value estimates  of the procurement going  in. For                                                               
leases, however, the determination is  based on whether the lease                                                               
is going  to be structured  under the small procurement  rules or                                                               
under the  formal procurement  process based on  the size  of the                                                               
lease. The bill  increases the current square  footage from 3,000                                                               
to 7,000, irrespective of the cost  per square foot. There are no                                                               
sideboards on the amount for a lease.                                                                                           
                                                                                                                                
CHAIR   WIELECHOWSKI  asked   for   explanation   of  the   major                                                               
differences  between the  procurement  process  and the  changing                                                               
procedures for small procurements.                                                                                              
                                                                                                                                
MR. JONES  explained that  currently in  regulation in  the small                                                               
procurement  procedures   there  are   a  number   of  processes,                                                               
depending on the size. Up to  $5,000, you use competition that is                                                               
reasonable under the circumstances  determined by the procurement                                                               
officer. From $5,000 to $25,000,  for general goods and services,                                                               
three quotes or informal proposals  are required; from $25,000 to                                                               
$50,000, a written  request for quotes or  proposals is required.                                                               
Anything  over $50,000  is considered  a formal  procurement. The                                                               
bill proposes to double those amounts for goods and services.                                                                   
                                                                                                                                
He  noted  that  leases  are   handled  differently  because  the                                                               
Division  of  General  Services  is  the  only  agency  that  has                                                               
authority   to  lease   office  space   and  it   handles  leases                                                               
internally. A formal process for  notification is used due to the                                                               
problem of  lack of competition.  All leases are noticed  on line                                                               
and sent to everyone who might qualify for the lease.                                                                           
                                                                                                                                
CHAIR WIELECHOWSKI asked if the dollar amounts were per year.                                                                   
                                                                                                                                
Mr.   JONES  clarified   that  they   were  dollar   amounts  per                                                               
procurement.                                                                                                                    
                                                                                                                                
CHAIR WIELECHOWSKI asked  if a lease was $5,000  per month, which                                                               
provision it would fall under.                                                                                                  
                                                                                                                                
MR.  JONES  explained   that  it  would  fall   under  the  small                                                               
procurement provision.  Under the statute, the  requirement would                                                               
be to solicit informal quotes  and proposals from three firms. In                                                               
reality,  it would  be on  the on-line  public notice  and anyone                                                               
could bid on it.                                                                                                                
                                                                                                                                
CHAIR  WIELECHOWSKI  asked  how   many  leased  spaces  would  be                                                               
affected by the bill.                                                                                                           
                                                                                                                                
MR.  JONES   related  that  the  Division   of  General  Services                                                               
administers 416  leases; 252  of which are  3,000 square  feet or                                                               
less, 75  are between  3,000 and  7,000 square  feet, and  89 are                                                               
over  7,000  square feet.  He  noted  that  leases are  the  most                                                               
complex of the procurements the state does.                                                                                     
                                                                                                                                
9:24:42 AM                                                                                                                    
CHAIR WIELECHOWSKI asked what the  differences would be for small                                                               
procurements, as  compared to the large  procurements, because of                                                               
the bill.                                                                                                                       
                                                                                                                                
MR. JONES  explained that on  the leases, the  notification would                                                               
not  change.  It's  a  matter  of timing  and  formality  of  the                                                               
process.  Due to  the change,  the division  would have  a larger                                                               
percentage of leases in a process  that does not take as long. It                                                               
would be less  intimidating, so a prospective bidder  would get a                                                               
10 to  15 page package  to review and fill  out instead of  a 200                                                               
page RFP.                                                                                                                       
                                                                                                                                
SENATOR  PASKVAN spoke  of the  99-year railroad  lease bill.  He                                                               
wondered if there  was a maximum dollar amount or  a maximum year                                                               
amount. He  was looking for  sideboards on  potentially expensive                                                               
leases.                                                                                                                         
                                                                                                                                
MR. JONES  reported that there  is no  dollar cap limit  on small                                                               
lease  procurements.  However,  statute  places a  limit  on  all                                                               
office  leases -  they cannot  exceed 40  years. It  is generally                                                               
more acceptable to  have a 5 or 10 year  lease, with typically 10                                                               
to 20 years  maximum. There are provisions in  statute that allow                                                               
for lease  extensions. The initial  term of a lease  can't exceed                                                               
40 years.                                                                                                                       
                                                                                                                                
9:27:37 AM                                                                                                                    
MS.  PIERRE  explained  that  Section   2  would  clarify  Alaska                                                               
business  license requirements  for competitive  sealed bids  and                                                               
qualification for the Alaska bidder  preference. The change would                                                               
require bidders  to show proof  of their Alaska  Business License                                                               
prior to the award, but would  require the license at the time of                                                               
bid  submission  in  order  to  qualify  for  the  Alaska  bidder                                                               
preference.                                                                                                                     
                                                                                                                                
CHAIR WIELECHOWSKI  asked if  adding this  section would  make it                                                               
easier for out-of-state businesses to compete.                                                                                  
                                                                                                                                
REPRESENTATIVE  FAIRCLOUGH explained  that the  bill would  allow                                                               
anyone to bid on a project,  but an Alaska Business License would                                                               
be required before an award was  received. A company must have an                                                               
Alaska  Business License  in order  to receive  an Alaska  bidder                                                               
preference.                                                                                                                     
                                                                                                                                
MR. JONES  agreed that the bill  does not make it  any easier for                                                               
out-of-state  companies   to  bid  because  all   of  the  formal                                                               
procurements  are  on  the  on-line  public  website.  It  allows                                                               
acceptance  of  an RFP  for  evaluation  and assurance  that  the                                                               
company has an  Alaskan business license. This change  in the law                                                               
was made at the request of Legislative Budget and Audit.                                                                        
                                                                                                                                
9:31:06 AM                                                                                                                    
CHAIR WIELECHOWSKI asked which companies are being denied.                                                                      
                                                                                                                                
MR. JONES replied that the  most common situation is from out-of-                                                               
state  firms that  have no  Alaskan  license, but  it applies  to                                                               
Alaskan firms, too.                                                                                                             
                                                                                                                                
CHAIR WIELECHOWSKI asked how much an Alaska preference entailed.                                                                
                                                                                                                                
MR. JONES  stated that  there are  many Alaskan  preferences. The                                                               
most  common  is  the  Alaska Business  Preference,  which  is  5                                                               
percent.                                                                                                                        
                                                                                                                                
CHAIR WIELECHOWSKI asked  if an Alaskan business  license was the                                                               
only qualification.                                                                                                             
                                                                                                                                
MR.  JONES listed  the qualifications:  have  an Alaska  business                                                               
license, submit a  bid or proposal in the names  appearing on the                                                               
license,  and have  a  place of  business in  the  state for  six                                                               
months previous to the due date of the bid.                                                                                     
                                                                                                                                
SENATOR  MEYER  inquired  if  an  Alaskan  business  could  be  a                                                               
corporation.                                                                                                                    
                                                                                                                                
MR. JONES said yes.                                                                                                             
                                                                                                                                
SENATOR MEYER asked if EXXON was an Alaskan business.                                                                           
                                                                                                                                
MR. JONES said yes.                                                                                                             
                                                                                                                                
9:33:03 AM                                                                                                                    
CHAIR  WIELECHOWSKI asked  how many  bids  are out-of-state  bids                                                               
versus Alaskan bids.                                                                                                            
                                                                                                                                
MR. JONES  said he  does not  currently have  a way  of capturing                                                               
that data.  A new automated  procurement system is in process. He                                                               
pointed  out that  the increased  threshold changes  in the  bill                                                               
would  increase the  likelihood of  an award  to an  Alaskan firm                                                               
because the  division is  only required  to contact  three firms.                                                               
Regulations  stipulate   that  three   in-state  firms   must  be                                                               
contacted before out-of-state firms  are contacted. There is more                                                               
likelihood that an Alaskan vendor would be solicited.                                                                           
                                                                                                                                
CHAIR WIELECHOWSKI  asked if there was  a list of those  who have                                                               
been disqualified for not having a business license.                                                                            
                                                                                                                                
MR. JONES said no.                                                                                                              
                                                                                                                                
CHAIR WIELECHOWSKI expressed interest in who is being excluded.                                                                 
                                                                                                                                
MR. JONES gave an example of  a megaproject bid with only outside                                                               
vendors  competing and  one  is disqualified  for  not having  an                                                               
Alaska business  license. He said  that situation  is frustrating                                                               
and costly.                                                                                                                     
                                                                                                                                
9:35:22 AM                                                                                                                    
SENATOR  PASKVAN   asked  if  there  were   glaring  examples  of                                                               
exclusion in the $7,000 and under lease category.                                                                               
                                                                                                                                
MR.  JONES said  it  was really  not an  issue  in that  category                                                               
because most of the vendors have Alaskan licenses.                                                                              
                                                                                                                                
MS.  PIERRE related  that  Section 3  eliminates  reference to  a                                                               
procurement officer's use of vendor  lists, reflecting the repeal                                                               
of  the statute  establishing the  vendor lists,  consistent with                                                               
Section 10.                                                                                                                     
                                                                                                                                
CHAIR  WIELECHOWSKI referred  to  page  2, lines  23  to 25,  the                                                               
reference to  eliminating mailing  notices to  active prospective                                                               
contractors, and questioned the rationale for that decision.                                                                    
                                                                                                                                
MR. JONES  explained that  current law  requires that  all formal                                                               
bids and  proposals are  posted on  line, with a  21 day  RFP bid                                                               
circulation period.  There will soon be  an automated procurement                                                               
system where everything will also be  posted on a state web site.                                                               
The  bidder lists  that were  required to  be maintained  are not                                                               
required by statute to be used.                                                                                                 
                                                                                                                                
CHAIR WIELECHOWSKI  summarized that the current  process involves                                                               
mailing a postcard to a  list of potential contractors, notifying                                                               
them of a procurement opportunity.                                                                                              
                                                                                                                                
MR. JONES said most of the  time the procurement officer does not                                                               
use the  postcard bidders list  because most contractors  know to                                                               
look  on  line for  the  information.  However, it  is  currently                                                               
required by statute,  therefore HB 204 is trying to  do away with                                                               
it.                                                                                                                             
                                                                                                                                
CHAIR  WIELECHOWSKI  asked  if there  will  still  be  electronic                                                               
notices  sent out,  or  if  people will  have  to  check on  line                                                               
themselves.                                                                                                                     
                                                                                                                                
MR. JONES explained  that on the on-line public  website there is                                                               
an  option  that any  interested  person  can choose  to  receive                                                               
notices by  email. The new  automated procurement system  will do                                                               
the same thing.                                                                                                                 
                                                                                                                                
CHAIR WIELECHOWSKI inquired when the new system would be done.                                                                  
                                                                                                                                
MR. JONES reported  that the system is currently  being built and                                                               
should be in place by 2014.                                                                                                     
                                                                                                                                
CHAIR  WIELECHOWSKI asked  if the  system was  instituted through                                                               
the Department of Administration and if it was fully funded.                                                                    
                                                                                                                                
MR. JONES said it was.                                                                                                          
                                                                                                                                
CHAIR WIELECHOWSKI asked who was building it.                                                                                   
                                                                                                                                
MR. JONES said it was a firm called CGI.                                                                                        
                                                                                                                                
CHAIR  WIELECHOWSKI  gave  a hypothetical  example  of  a  rental                                                               
property located in  Angoon. He wondered if the  owner could post                                                               
the availability on line.                                                                                                       
                                                                                                                                
MR. JONES  explained that  a person  could submit  a notification                                                               
request on  the on-line public  notice website. Any time  a lease                                                               
procurement  came up,  they would  receive a  notification to  go                                                               
look on line.                                                                                                                   
                                                                                                                                
CHAIR  WIELECHOWSKI  concluded  that  Section 3  takes  away  the                                                               
requirement that postcards are sent to a list of contractors.                                                                   
                                                                                                                                
MR. JONES said yes.                                                                                                             
                                                                                                                                
CHAIR WIELECHOWSKI asked if it would be a cost savings.                                                                         
                                                                                                                                
MR. JONES thought there would be minimal cost savings.                                                                          
                                                                                                                                
9:41:07 AM                                                                                                                    
MS.  PIERRE explained  Section  4,  which clarifies  construction                                                               
contractor  registration requirements,  now explicitly  requiring                                                               
registration before award of a contract.                                                                                        
                                                                                                                                
CHAIR WIELECHOWSKI asked  if, under current law, a  bidder has to                                                               
be a contractor.                                                                                                                
                                                                                                                                
MR.  JONES  said  Section  4  maintains  a  distinction  that  in                                                               
addition  to  having  a  business   license  for  a  construction                                                               
project, the  bidder must  also be  registered as  a construction                                                               
contractor.                                                                                                                     
                                                                                                                                
SENATOR PASKVAN  asked if  the contract  proposal from  the state                                                               
identifies  the registration  classification needed  to meet  the                                                               
type of contract.                                                                                                               
                                                                                                                                
MR.  JONES  related  that  there  is a  list  of  codes  for  the                                                               
contractor to  choose from. He  added that DOT has  authority for                                                               
construction.                                                                                                                   
                                                                                                                                
SENATOR PASKVAN  wondered if  there has been  a conflict  where a                                                               
contractor has not identified the required classification.                                                                      
                                                                                                                                
9:43:44 AM                                                                                                                    
MR.  JONES  said  that  DOT works  closely  with  the  Associated                                                               
General Contractors of Alaska (AGC) on those requirements.                                                                      
                                                                                                                                
CHAIR  WIELECHOWSKI   thought  the  state  would   want  to  hire                                                               
registered contractors.                                                                                                         
                                                                                                                                
MR. JONES thought it was more  of a technical issue on the timing                                                               
of  the registration.  The contractor  must be  registered before                                                               
the award if a contract.                                                                                                        
                                                                                                                                
CHAIR  WIELECHOWSKI said  he  thought if  it  was a  construction                                                               
contract, the  state would want  a licensed contractor to  do the                                                               
job.                                                                                                                            
                                                                                                                                
MR. JONES said the bill assumes  there was a reason they were not                                                               
registered yet.                                                                                                                 
                                                                                                                                
9:46:00 AM                                                                                                                    
MS. PIERRE  addressed Section 5, which  clarifies Alaska business                                                               
license  requirements   for  competitive  sealed   proposals  and                                                               
qualification  for the  Alaska bidder  preference using  language                                                               
consistent with that used in Section 2.                                                                                         
                                                                                                                                
MR. JONES  added that Section  5 deals  with RFP's and  Section 2                                                               
deals with  invitations to bid, which  are the same, but  pick up                                                               
different types of procurements.                                                                                                
                                                                                                                                
CHAIR WIELECHOWSKI asked  for an explanation of  AS 36.31.170 and                                                               
AS 36.31.175.                                                                                                                   
                                                                                                                                
MR. JONES  related that the  first statute is the  evaluation and                                                               
award provision.                                                                                                                
                                                                                                                                
CHAIR WIELECHOWSKI summarized  that it states the  timing of when                                                               
a contractor must have an Alaskan business license.                                                                             
                                                                                                                                
MR. JONES stated  that Section 5 mirrors Section  2. He explained                                                               
the  definition  of  bid,  which  is  to  provide  specifications                                                               
sufficient  enough that  if a  person  qualifies and  is the  low                                                               
bidder, then they win the bid. A  RFP is a document where cost is                                                               
only a  fraction of the  overall evaluation criteria  and entails                                                               
scoring points. The  high point score wins and cost  is a part of                                                               
the evaluation;  in a  bid process,  cost is  100 percent  of the                                                               
evaluation.                                                                                                                     
                                                                                                                                
SENATOR MEYER asked which process is done the most.                                                                             
                                                                                                                                
MR. JONES replied that in  professional services, RFP's are used,                                                               
and  commodities are  purchased on  a low  bid basis.  Leases are                                                               
always done with RFP's.                                                                                                         
                                                                                                                                
SENATOR MEYER inquired if RFP's are used for road construction.                                                                 
                                                                                                                                
MR. JONES said that generally a bid process is used.                                                                            
                                                                                                                                
9:49:22 AM                                                                                                                    
MS.  PIERRE  addressed  Section  6,  which  adds  a  new  section                                                               
allowing an agency to accept electronic bids and proposals.                                                                     
                                                                                                                                
CHAIR  WIELECHOWSKI asked  if the  department does  not currently                                                               
have the authority to receive bids and proposals.                                                                               
                                                                                                                                
MR. JONES replied  that currently there is  no explicit authority                                                               
for that.                                                                                                                       
                                                                                                                                
SENATOR PASKVAN inquired if the  procurement branch of government                                                               
is ready  to receive  electronic bids and  proposals in  a timely                                                               
manner.                                                                                                                         
                                                                                                                                
MR. JONES admitted that currently it  was not ready, but a said a                                                               
new electronic system was being built.                                                                                          
                                                                                                                                
CHAIR WIELECHOWSKI noted it would  be ready around 2014, so until                                                               
then, if HB  204 is passed, the department would  rely on written                                                               
transmission.                                                                                                                   
                                                                                                                                
MR. JONES agreed that the bill allows for written communication.                                                                
                                                                                                                                
MS.  PIERRE explained  Section 7,  which increases  the threshold                                                               
under which a  state agency may use  informal procurement process                                                               
to $100,000 for goods and  professional services, to $200,000 for                                                               
construction, and 7,000 square feet for lease of space.                                                                         
                                                                                                                                
9:51:26 AM                                                                                                                    
SENATOR PASKVAN  wondered why  there was a  change from  "may" to                                                               
"shall", because it eliminates the department's discretion.                                                                     
                                                                                                                                
MR. JONES  said it  appears to  do that, but  in reality  it does                                                               
not. When  the department issues  a small procurement, it  can be                                                               
written  to  include requirements  of  a  formal procurement.  He                                                               
related that  there are  different protest  procedures, depending                                                               
on  the  size of  the  procurement.  In small  procurements,  the                                                               
process is  one step. In  formal procurements there is  a protest                                                               
to the  commission officer and  an appeal to the  Commissioner of                                                               
Administration  or  Transportation.  Section 7  classifies  which                                                               
process to use.                                                                                                                 
                                                                                                                                
9:53:28 AM                                                                                                                    
SENATOR PASKVAN argued  to keep "may" in the  bill. He understood                                                               
that  using  "shall"  means  the   department  can  still  impose                                                               
restrictions similar to a formal procurement process.                                                                           
                                                                                                                                
MR. JONES  agreed. He  gave an example  of the  lease procurement                                                               
process, where the  department has imposed the  formal process in                                                               
order to obtain more competition.                                                                                               
                                                                                                                                
SENATOR  PASKVAN  asked if  there  would  have to  be  regulation                                                               
changes to accommodate that intent.                                                                                             
                                                                                                                                
MR. JONES  explained that there  has to be regulation  changes to                                                               
account  for  the new  dollar  amounts,  but the  flexibility  is                                                               
already built in to adopt more formal requirements.                                                                             
                                                                                                                                
CHAIR  WIELECHOWSKI  asked if  the  bill  would require  numerous                                                               
regulations.                                                                                                                    
                                                                                                                                
MR. JONES said it would.                                                                                                        
                                                                                                                                
REPRESENTATIVE FAIRCLOUGH  clarified that Section 7  dictates the                                                               
appeal process  on a  small procurement.  If the  department adds                                                               
extra   layers  of   requirements,  and   someone  protests   the                                                               
additional  requests,  the  department   "shall"  use  the  small                                                               
procurement  procedure. She  opined  that  Legislative Legal  was                                                               
trying to narrow the focus of the appeal.                                                                                       
                                                                                                                                
9:57:10 AM                                                                                                                    
SENATOR PASKVAN wanted  to make sure the  procurement officer has                                                               
as   much  discretion   as   possible.   He  assumed   additional                                                               
requirements,  or a  hybrid  procurement  process, would  require                                                               
more regulations.                                                                                                               
                                                                                                                                
MR. JONES  clarified with  an example  of a  $20,000 procurement,                                                               
which  under small  procurement  rules,  require solicitation  of                                                               
three bids. A procurement officer  could make the decision to get                                                               
more bids  and solicit ten firms  or put the announcement  on the                                                               
on-line  public  notice or  adopt  the  21-day circulation  time.                                                               
There is  that flexibility  even though the  wording of  the bill                                                               
says "shall  be run", because small  procurement requirements are                                                               
minimal  requirements. The  wording  does  require following  the                                                               
protest procedures for a small procurement.                                                                                     
                                                                                                                                
CHAIR  WIELECHOWSKI stated  that  would not  be  possible if  the                                                               
department adopted regulations that said otherwise.                                                                             
                                                                                                                                
MR.  JONES  maintained that  the  department  would not  do  that                                                               
because it would not make  sense to bar additional competition or                                                               
additional time requirements.                                                                                                   
                                                                                                                                
CHAIR  WIELECHOWSKI requested  an  example of  an  abuse of  this                                                               
section.                                                                                                                        
                                                                                                                                
MR. JONES repeated the $20,000 procurement example.                                                                             
                                                                                                                                
CHAIR  WIELECHOWSKI argued  if regulations  were adopted  for the                                                               
small  procurement  procedure  that  made specific  bid  or  time                                                               
requirements, the legislation would be bound by them.                                                                           
                                                                                                                                
MR.  JONES clarified  that regulations  generally say  to do  the                                                               
minimum required.                                                                                                               
                                                                                                                                
CHAIR WIELECHOWSKI  thanked Mr. Jones  for the good  education on                                                               
the procurement process.                                                                                                        
                                                                                                                                
10:01:54 AM                                                                                                                   
MS. PIERRE  turned to  Section 8,  which eliminated  reference to                                                               
the removal of  debarred or suspended persons  from vendor lists,                                                               
reflecting the  repeal of  a law  establishing the  vendor lists,                                                               
consistent with Section 10.                                                                                                     
                                                                                                                                
CHAIR  WIELECHOWSKI inquired  if current  law allows  debarred or                                                               
suspended persons to be considered.                                                                                             
                                                                                                                                
MR. JONES replied that they  are prohibited from bidding. Section                                                               
8 deletes the reference to  the bidder list, which was eliminated                                                               
in a previous section.                                                                                                          
                                                                                                                                
CHAIR WIELECHOWSKI concluded that it was cleaning up redundancy.                                                                
                                                                                                                                
MS. PIERRE said yes.                                                                                                            
                                                                                                                                
She  continued  to say  that  Section  9 updates  definitions  to                                                               
include electronics.                                                                                                            
                                                                                                                                
CHAIR WIELECHOWSKI  inquired if  AS 36.30.990 was  the definition                                                               
section.                                                                                                                        
                                                                                                                                
MS. PIERRE said yes.                                                                                                            
                                                                                                                                
MS. PIERRE  related that Section 10  repeals statute establishing                                                               
the vendor list.                                                                                                                
                                                                                                                                
10:04:45 AM                                                                                                                   
MS. PIERRE  explained that Section  11 clarified  the application                                                               
of   the  Procurement   Act  to   pending  solicitations   during                                                               
transition period.                                                                                                              
                                                                                                                                
CHAIR  WIELECHOWSKI concluded  that it  applies only  to bids  or                                                               
proposals that come about after this section.                                                                                   
                                                                                                                                
MS. PIERRE said yes.                                                                                                            
                                                                                                                                
SENATOR PASKVAN  referred to page 4,  lines 18 and 19,  and asked                                                               
if  it would  state in  the contract  that the  submission of  an                                                               
application is their acceptance of these provisions.                                                                            
                                                                                                                                
MR. JONES said yes.                                                                                                             
                                                                                                                                
CHAIR  WIELECHOWSKI inquired  if  Section 12  was the  immediate,                                                               
effective date.                                                                                                                 
                                                                                                                                
MS. PIERRE said yes.                                                                                                            
                                                                                                                                
CHAIR  WIELECHOWSKI asked  if the  effective date  was a  problem                                                               
without the electronic system in place.                                                                                         
                                                                                                                                
MR.  PIERRE said  it  was  not a  problem.  The  bill allows  the                                                               
department to accept electronic bids  and proposals, but does not                                                               
require the department to do so.                                                                                                
                                                                                                                                
10:06:44 AM                                                                                                                   
SCOTT   THORSON,   representing   himself,   Anchorage,   Alaska,                                                               
testified in  support of HB  204 as  a way of  streamlining state                                                               
procurement and making private sector firms' business easier.                                                                   
                                                                                                                                
CHAIR  WIELECHOWSKI asked  if  there was  any  opposition to  the                                                               
bill.                                                                                                                           
                                                                                                                                
REPRESENTATIVE  FAIRCLOUGH  stated  that  the  State  Chamber  of                                                               
Commerce supports  the bill. She  noted written support  from the                                                               
State Chamber of  Commerce. She related that she was  aware of no                                                               
opposition to the bill.                                                                                                         
                                                                                                                                
CHAIR  WIELECHOWSKI  wondered  if there  had  been  controversial                                                               
sections in the bill that had been removed.                                                                                     
                                                                                                                                
REPRESENTATIVE FAIRCLOUGH recalled a  contentious point two years                                                               
ago;  a  provision  to remove  a  bidder's  preference  currently                                                               
allowed  in regulation.  The provision  no longer  exists in  the                                                               
bill.                                                                                                                           
                                                                                                                                
SENATOR MEYER  recalled a concern  about the  procurement process                                                               
in  the past.  He pointed  out that  each state  department makes                                                               
purchases  individually and  it  is difficult  to  track how  the                                                               
money is being spent. He made  a suggestion to capture the dollar                                                               
amount and  then put it  out for bid in  order to save  the state                                                               
money.  He said  he realized  technology  would be  needed to  do                                                               
that.  He  hoped  by  2014  the  state  could  save  money  using                                                               
technology for procurement.                                                                                                     
                                                                                                                                
CHAIR  WIELECHOWSKI  asked  if   each  department  does  its  own                                                               
procurements.                                                                                                                   
                                                                                                                                
MR. JONES explained that the  procurement authority for goods and                                                               
services and  for professional  services is  vested in  the Chief                                                               
Procurement Officer  and the Commissioner of  Administration. The                                                               
construction procurement authority is  vested in the Commissioner                                                               
of the  Department of Transportation. General  Services delegates                                                               
unlimited authority to all agencies  for procurement of goods and                                                               
services   and  for   professional   services   because  of   the                                                               
impossibility  of the  five  buyers  to be  able  to conduct  the                                                               
volume  of procurements.  Delegation  is a  practical matter.  He                                                               
agreed  that there  is some  loss of  control and  oversight that                                                               
way. He  maintained that the  automated system will  improve that                                                               
situation.                                                                                                                      
                                                                                                                                
10:12:01 AM                                                                                                                   
CHAIR  WIELECHOWSKI  pointed  out  that  centralized  procurement                                                               
saves money.                                                                                                                    
                                                                                                                                
MR. JONES hoped to have that system in place.                                                                                   
                                                                                                                                
REPRESENTATIVE  FAIRCLOUGH made  final comments.  She shared  the                                                               
committee's  enthusiasm   about  moving  toward   an  accountable                                                               
system. She said the proposed  changes to procurement in the bill                                                               
are very  small, but  they are intended  to give  the procurement                                                               
officers that  are centralized, the ability  to concentrate their                                                               
resources on much more complex issues.                                                                                          
                                                                                                                                
CHAIR WIELECHOWSKI held HB 204 in committee.                                                                                    

Document Name Date/Time Subjects
SB 132 Sponsor Statement.pdf SSTA 3/22/2012 9:00:00 AM
SSTA 3/27/2012 9:00:00 AM
SB 132
SB0132A.pdf SSTA 3/22/2012 9:00:00 AM
SSTA 3/27/2012 9:00:00 AM
SB 132
SB132-DOA-DMV-3-16-12.pdf SSTA 3/22/2012 9:00:00 AM
SSTA 3/27/2012 9:00:00 AM
SB 132
SB 132 Student Driving Presentation.ppt SSTA 3/22/2012 9:00:00 AM
SSTA 3/27/2012 9:00:00 AM
SB 132
CS SB 132 - 3-26-12.PDF SSTA 3/27/2012 9:00:00 AM
SB 132
CSHB 129(FIN) - Version I.pdf SSTA 3/22/2012 9:00:00 AM
SSTA 3/27/2012 9:00:00 AM
HB 129
HB129CS(FIN)-DHSS-BVS-12-15-11.pdf SSTA 3/22/2012 9:00:00 AM
SSTA 3/27/2012 9:00:00 AM
HB 129
01 HB 129 Sponsor Statement.pdf HMLV 2/22/2011 1:00:00 PM
SSTA 3/22/2012 9:00:00 AM
SSTA 3/27/2012 9:00:00 AM
HB 129
HB 129 version D.pdf SSTA 3/27/2012 9:00:00 AM
HB 129
HB 129 - Explanation of Changes.pdf HMLV 2/22/2011 1:00:00 PM
SSTA 3/22/2012 9:00:00 AM
SSTA 3/27/2012 9:00:00 AM
HB 129
HB 129 - Death Certificate Example.pdf HMLV 2/22/2011 1:00:00 PM
SSTA 3/22/2012 9:00:00 AM
SSTA 3/27/2012 9:00:00 AM
HB 129
HB204-DOA-PUR-12-01-11.pdf SSTA 3/27/2012 9:00:00 AM
HB 204
HB 204.pdf SSTA 3/27/2012 9:00:00 AM
HB 204
HB 204 Sponsor Statement.pdf SSTA 3/27/2012 9:00:00 AM
HB 204
HB 204 Sectional Analysis.pdf SSTA 3/27/2012 9:00:00 AM
HB 204
HB 204 Support- University.pdf SSTA 3/27/2012 9:00:00 AM
HB 204
Alaska Chamber HB 204 March 26, 2012.pdf SSTA 3/27/2012 9:00:00 AM
HB 204