02/20/2003 01:32 PM House TRA
| Audio | Topic |
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+ teleconferenced
= bill was previously heard/scheduled
ALASKA STATE LEGISLATURE
HOUSE TRANSPORTATION STANDING COMMITTEE
February 20, 2003
1:32 p.m.
MEMBERS PRESENT
Representative Jim Holm, Co-Chair
Representative Beverly Masek, Co-Chair
Representative Hugh Fate
Representative Vic Kohring
Representative Mary Kapsner
Representative Albert Kookesh
MEMBERS ABSENT
Representative Cheryll Heinze
COMMITTEE CALENDAR
HOUSE BILL NO. 67
"An Act relating to construction of highways by the Department
of Transportation and Public Facilities."
- MOVED HB 67 OUT OF COMMITTEE
HOUSE BILL NO. 96
"An Act naming the Sven Haakanson, Sr. Airport at Old Harbor."
- BILL HEARING POSTPONED to 2/25/03
PREVIOUS ACTION
BILL: HB 67
SHORT TITLE:CONSTRUCTION OF HIGHWAYS BY DOTPF
SPONSOR(S): REPRESENTATIVE(S)HOLM
Jrn-Date Jrn-Page Action
01/29/03 0085 (H) READ THE FIRST TIME -
REFERRALS
01/29/03 0085 (H) TRA, FIN
02/13/03 (H) TRA AT 1:30 PM CAPITOL 17
02/13/03 (H) -- Meeting Canceled --
02/18/03 (H) TRA AT 1:30 PM CAPITOL 17
02/18/03 (H) <Bill Hearing Postponed to
2/20/03> -- Meeting Canceled
02/20/03 (H) TRA AT 1:30 PM CAPITOL 17
WITNESS REGISTER
BARBARA COTTING, Staff
to Representative Jim Holm
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Presented HB 67 on behalf of Representative
Holm, sponsor.
DENNIS POSHARD, Legislative Liaison
and Special Assistant
Office of the Commissioner
Department of Transportation & Public Facilities
Juneau, Alaska
POSITION STATEMENT: Testified that the administration doesn't
have an official position on HB 67.
FRANK T. RICHARDS, State Maintenance Engineer
Office of the Commissioner
Department of Transportation & Public Facilities
Juneau, Alaska
POSITION STATEMENT: Answered questions pertaining to HB 67.
KEVIN RITCHIE
Alaska Municipal League,
Alaska Conference of Mayors
Juneau, Alaska
POSITION STATEMENT: Testified in opposition to HB 67 in its
present form.
JEFF ALLING
Alcan Builders;
Member, Associated Builders and Contractors
Fairbanks, Alaska
POSITION STATEMENT: Testified in favor of HB 67, presenting his
view only.
STEVE WEAVER, Director
Environmental Engineering Program;
Alaska Native Health Consortium
Anchorage, Alaska
POSITION STATEMENT: Testified in opposition to HB 67.
GRAHAM STORY
Nome Chamber of Commerce
Nome, Alaska
POSITION STATEMENT: Testified in favor of HB 67 and provided
suggestions.
JERRY DRAKE, Member
Bethel City Council
Bethel, Alaska
POSITION STATEMENT: Testified in adamant opposition to HB 67.
JIM ADAMS, Director
Maintenance and Operations
Northern Region
Department of Transportation & Public Facilities
Nome, Alaska
POSITION STATEMENT: Testified on HB 67, offering "food for
thought."
JUDY MARTINSON
Northcoast Construction
Nome, Alaska
POSITION STATEMENT: Testified in favor of HB 67.
STUART JACQUES (ph)
POSITION STATEMENT: Testified on his own behalf in favor of HB
67.
ACTION NARRATIVE
TAPE 03-3, SIDE A
Number 0001
CO-CHAIR BEVERLY MASEK called the House Transportation Standing
Committee meeting to order at 1:32 p.m. Representatives present
at the call to order were Representatives Masek, Holm, Fate,
Kohring, and Kapsner. Representative Kookesh arrived while the
meeting was in progress.
HB 67-CONSTRUCTION OF HIGHWAYS BY DOT&PF
CO-CHAIR MASEK announced the order of business would be HOUSE
BILL NO. 67, "An Act relating to construction of highways by the
Department of Transportation and Public Facilities."
Number 0081
BARBARA COTTING, Staff to Representative Jim Holm, Alaska State
Legislature, the bill's sponsor, noted that additions to the
committee packet included a revised fiscal note from the
Department of Transportation & Public Facilities (DOT&PF), a
copy of the "Saint Mary's Airport Road Rehabilitation Final
Completion Summary Report," a statement of opposition from the
Alaska Municipal League, and a statement of support from
Associated Builders and Contractors. Ms. Cotting explained that
Alaska Statute requires that construction and maintenance be
done by competitive bid, except in the case of very small
projects, where the state is allowed to use what is termed a
"force account." She said she understood "force account" as
referring to situations in which the state uses its own forces
to do the work, as opposed to opening up a project to the
competitive bidding process. She said that over the years,
instead of confining this to small projects, many large projects
have been done by the state using the force account method.
From Co-Chair Holm's point of view, she said, this takes dollars
out of the private sector and out of the industry. It also
requires the state to maintain expensive equipment and trained
personnel year-round, and it particularly removes those projects
from oversight by the public.
Number 0245
REPRESENTATIVE KOOKESH noted that the phrase "many large
projects" had been used, and asked for an example of a large
project.
MS. COTTING replied that the Saint Mary's project was an example
of a large project.
REPRESENTATIVE KAPSNER said her understanding was that Saint
Mary's was not a large project, as it was approximately $1
million. She said force accounts only comprise 2.2 to 3 percent
of the total DOT&PF budget, which is analogous to "crumbs off
the pie." She suggested further clarification of what
constitutes a large project.
Number 0336
CO-CHAIR HOLM, speaking as the sponsor of HB 67, suggested that
the Saint Mary's project was not small, as it cost $2 million
470 thousand. He said HB 67 has to do with the application of
funds and how funds are spent. Referring to the packet, he
pointed to fiscal year 2002, Item number 001, preventative
maintenance, in the "DOT&PF Force Account Report." He said in
this case, DOT&PF spends $8,860 million for the Northern Region.
While he understands the department doesn't want someone looking
over its shoulder, as a contractor himself, he believes the
amount of $250,000 is not "chicken feed." Most people in his
business would bid on any job worth $250,000, or less, in the
Bush; if the job was much more than $100,000, they would
certainly apply to do it. Another issue is that the state owns
a lot of equipment that it pays for out of the equipment-highway
fund. In the case of Saint Mary's, the city bought the
equipment, the state leased it, and at the end of project, the
City of Saint Mary's has owned the equipment. He said he does
not begrudge improving the town's financial position, but it may
not be in best interest of the state to do those kinds of
projects. He reiterated that he likes the competitive bidding
process.
Number 0538
REPRESENTATIVE FATE referred to the word "large" and to the
proposed amendment to AS 19.10.170(a) [in HB 67] and its
correlation to the dollar amount of $250,000. He suggested this
as being the guts of the discussion and said he was of the mind
that any debate would focus on the merits as to why this amount
was chosen. He said he was not uncomfortable with the amount of
$250,000, but realized there must be some measure as to how this
figure had been derived.
CO-CHAIR HOLM said a lot of work had been done on this bill last
year, and on the companion bill from Senator Cowdery's office in
which the same figure of $250,00 is used. He said the consensus
is that this is a good number, and he would like to keep things
at a consistent level. He added that last year, the figure had
even been raised to $1 million in attempts to get the bill
through the House.
Number 0661
REPRESENTATIVE KAPSNER asked what types of projects are done in
the state for under $250,000. She suggested that a lot more of
such projects could be done in Fairbanks or Anchorage, as
opposed to Tuntutuliak, for example.
CO-CHAIR MASEK suggested that DOT&PF might address that question
later in the meeting.
REPRESENTATIVE KOOKESH said he wanted to determine what was in
the best interests for the people of Alaska. He said that force
accounts offer a lot of jobs to local areas that normally
wouldn't have those jobs, and he wondered if limiting this to
$250,000 would be of benefit to those in the state who could
afford bonding, people like the sponsor, perhaps, who might
benefit from this limitation.
CO-CHAIR HOLM responded that he doesn't claim to speak for all
Alaskans, and that the possibility of bidding on jobs was not a
personal reason for the suggested limitation. He noted that he
does not personally deal with asphalt, and that a lot of these
dollars are for preventative maintenance and for roads which he
does not have a personal stake in. He added that a lot of these
projects are in the Northern Region, while others refer to
streets in the Juneau area. He reiterated that he believes in
the public bidding process.
REPRESENTATIVE KOOKESH referred to Governor Murkowski's stated
desire for Alaska to benefit economically, and said that the
Saint Mary's project was of benefit to Alaskans, both in terms
of jobs and equipment. He said he was trying to determine what
was best, and that he was willing to be convinced.
CO-CHAIR MASEK said she wanted to allow time for public
testimony, which would hopefully answer some of the stated
questions.
Number 0916
DENNIS POSHARD, Legislative Liaison and Special Assistant,
Office of the Commissioner, Department of Transportation &
Public Facilities, introduced other DOT&PF staff - Mark O'Brien,
Chief Contracts Officer, and Frank T. Richards, State
Maintenance Engineer. He said that the new administration
hasn't yet taken a position on this bill, is reviewing
Administrative Order 199, and is trying to decide upon its
position on the issue of force accounts. He pointed out that
this bill would affect less than 3 percent of the total amount
of the department's annual capital program. The department
agrees that it should not be competing with the private sector,
and that for activities where the private sector can do better,
jobs are contracted out, which is why the department routinely
contracts out more than 97 percent of its program. He explained
that of that less-than-3 percent that they choose to do by force
account, over half of that money goes to the private sector
anyway because when [DOT&PF] works with its own DOT&PF employees
by force account, it still has to buy materials and lease
equipment from the private sector, and often employ private-
sector services for participating in their projects.
Number 1052
MR. POSHARD explained that this bill would affect force account
projects that are transferred, for example, to the Bureau of
Indian Affairs, the Indian Health Service, or local governments.
Another type of force account project that this bill would
affect would be maintenance projects that the department does
with its own maintenance forces. He said there are some
specific line items in the capital budget and in the statewide
transportation improvement program for things like bridge repair
or pavement rehabilitation, and that each spring and summer a
portion of DOT&PF maintenance employees are converted from being
paid from the general fund maintenance budget to being paid from
the capital fund budget. Essentially, in the summer those
employees do what they normally do under the general fund
maintenance program, except that it is done under a capital
project. He explained that the reason is to be able to keep a
trained workforce employed, without having to lay them off or
having to rehire and train employees in the fall. If the
department didn't do that, it would have a pretty serious
management decision, determining either to lay off employees
every spring - to keep a cushion in the personal services line
item so that the department could pay for overtime when needed
for major weather events in winter - or to keep employees and in
the winter, having very little overtime to deal with any
extraordinary snow events. The third type of force account
project that this bill would affect is an offshoot of the
maintenance the department does, which are projects like Saint
Mary's. As indicated in the fiscal note, there are some savings
achieved by working with DOT&PF maintenance forces as opposed to
contracting out. Although the department has no position on
this bill, should it pass, there would be some difficult
management decisions up ahead.
Number 1221
CO-CHAIR HOLM asked if the force account process indicates that
the department does not want to lay off employees, thereby
avoiding paying overtime in winter, but still paying huge
quantities of overtime in the summer.
MR. POSHARD responded that it has paid overtime for maintenance
employees in summer, and has paid overtime out of these capital
line items with force account work. One reason is to maximize
the benefit of that type of work, that is, to complete as much
of the work as possible in the summer, when the weather is
agreeable for work pertaining to the patching of cracked
sealings or guardrails.
CO-CHAIR HOLM asked how much of the $11 million 180 thousand,
the total for this year's force account, could be done by the
private sector.
MR. POSHARD said the question was difficult to answer and that
if the department chose to contract out, the private sector
would be happy to fill the need and do the work. There may be a
few items that couldn't be done, or that would be more
efficiently done by the department, but feasibly the work could
be contracted out.
CO-CHAIR HOLM asked for an example of something the private
sector could not do for the state.
Number 1339
FRANK T. RICHARDS, State Maintenance Engineer, Office of the
Commissioner, Department of Transportation & Public Facilities,
said although there are features of the work that maintenance
does that the private sector could do, it is really a question
of cost-effectiveness. For example, if there is a particular
bridge, with one small piece of guardrail to repair as well as a
bushing or shim that needs repair, that work could be done by
the contracting effort, except the dollar amount would be so
small, it would be more cost-effective to use maintenance forces
when they're there.
CO-CHAIR HOLM rephrased his question and asked if it would be
better for the public sector to take the risk of having
machinery sit around, thereby letting the private sector take
the risk, and advertising over many projects rather than just
one or two projects that the state comes up with.
MR. RICHARDS responded that when the department utilizes
specialized equipment for force account efforts, in many
instances it contracts for that piece of equipment, and makes
the determination at that time, based on the quantity of work,
as to whether or not it is more cost-effective to contract out
for the entire effort or for the utilization of a piece of
equipment with state forces. In the instance when the
department purchases specialized equipment to be used by state
forces, it is with a clear understanding that the piece of
equipment will be utilized for that particular project and for
subsequent projects, so that it will be cost-effective. He said
[the department] reviews rates through published blue book rates
and contracted rates to ensure that it is in the best interest
of the state to purchase that particular piece of equipment.
Number 1466
CO-CHAIR HOLM asked if DOT&PF's purchasing of equipment is
appropriate and cost-effective, and whether it could be done
better by the private sector.
MR. RICHARDS replied that in general terms, the equipment DOT&PF
operates is multipurpose equipment, whether it is an eight-yard
dump truck that is able to handle snow plowing as well as
material hauling, or whether it is a grader, that can be used
for "bluetop grading" as well as snow plowing in the wintertime.
He said it seldom purchases specialized equipment.
CO-CHAIR HOLM rephrased the question by prefacing it with a
statement. He said if there were not dump trucks, [Caterpillars
("Cats")] or guardrail machines in Alaska, then he might accept
the argument that because of Alaska's hugeness or economy of
scale, the state could purchase such equipment and utilize it in
the best interests of the people who live in the state.
However, because the equipment and workforce are there to be
utilized, and because people in the private sector - good
employees, union employees, people with talent - are available
and could be utilized on these projects, why would government
employees be better suited to provide this service than the
private sector?
Number 1579
MR. POSHARD said the department has developed a level of
efficiency in maintaining its equipment fleet, and in using
DOT&PF employees to maintain roads and airports. He said there
is no question, if that were the desire, that maintenance could
be privatized, and it may or may not be cost-effective.
However, that's not really what this force account bill is
about. He said this refers to certain line items, a small
portion of the capital budget, used to do maintenance work.
There are only certain activities the department can do; most of
those do not require specialized equipment, and when they do,
the department often doesn't own or maintain the equipment but
chooses to lease it. He said [DOT&PF] had a partnering meeting
with ABC [Association of Building Contractors], where a few
instances were brought to their attention where it was believed
that the state had purchased specialized equipment, but was not
making efficient use of it. He said [ABC's] point may be valid
and [DOT&PF] will certainly look into that. As a general rule,
for force account work, the type of equipment used is either
equipment the department already has that is needed year-round
for other purposes, and the funding is shifted for that
equipment during the period of time that it is being used on the
capital project, or it is specialized equipment that the
department is leasing.
REPRESENTATIVE KOOKESH asked if there was any timeline as to
when the new administration would take a position on this bill.
MR. POSHARD said he was hesitant to give a specific date, but
assured the committee that this has been brought to the top of
the list of items that the commissioner needs to deal with,
including Administrative Order 199.
REPRESENTATIVE KAPSNER asked what projects take place in the
state for $250,000 and the extent to which projects are covered
in urban versus rural areas for that amount. Representative
Kapsner asked for percentages of the three types of projects
that force accounts affect. She commented that she finds it
bewildering that the Saint Mary's project has gotten people's
hackles up, since it's crumbs in light of DOT&PF's enormous
budget.
Number 1768
MR. POSHARD referred to the "DOT&PF Force Account Report" for
the year 2002, and said that maintenance activities make up all
but about $1.5 million of the $11.2 million, which was the total
amount of force account maintenance activities; a sizeable
portion of that ended up in the private sector anyway. Only 40
percent was related to DOT&PF personnel, personal services, and
equipment, as the rest went to the private sector. He said for
2002, a total of about $1.5 million was force account projects
that the department transferred to other agencies and which they
did not do with their own forces. He added that the Saint
Mary's information was listed in the year 2000.
REPRESENTATIVE KAPSNER noted that $1.5 million was out of $11.2
million for force account work, but inquired as to the amount of
the total budget.
MR. POSHARD responded that $505 million was the total budget,
indicating that the $1.5-million amount transferred to other
agencies was about .2 or .3 percent.
REPRESENTATIVE KAPSNER restated her second question, which
referred to the dollar amounts for the three types of projects
that Mr. Poshard referred to earlier.
Number 1888
CO-CHAIR MASEK asked if something written could be provided to
the committee.
MR. POSHARD asked if Representative Kapsner was looking for
projects, in general, of less than $250,000 that the department
does, or for a breakdown of projects that the department chooses
to transfer to other agencies. In response to Representative's
Kapsner request for both pieces of information, Mr. Poshard said
those could be provided to the committee.
Number 1920
KEVIN RITCHIE, Alaska Municipal League, Alaska Conference of
Mayors, said their committee looked at the bill and does not
recommend adoption of the bill in its present form. He
mentioned the process that was entered into over the summer, as
a result of discussions from last year, and he referred to a
long-term conflict between contracting and force accounting
throughout the state, not just in transportation projects but in
other areas as well. He said there were good sessions that
involved numerous meetings and included key affected parties
from state agencies, federal agencies, general contractors, AFL-
CIO, Native corporations, the municipal league, and others. He
said people aired issues, and the Saint Mary's project received
a fair amount of discussion. He added that he thinks the Saint
Mary's project is fairly unique as far as force accounts go. In
Alaska, an important part of rural economies is temporary work,
such as work that is available through force account projects.
On the other hand, contractors are rightfully concerned that a
force account contract does not have to pay Davis-Bacon wages.
He said there are obvious competitive issues between contractors
and force account projects, and that because both sides have a
fair issue, a great deal of discussion and compromise took
place, which was accomplished under the administrative order.
He said the administrative order was from the prior
administration and needs to be looked at by the current
administration.
Number 2030
MR. RITCHIE continued, to solve the local hire issue, some
productive and unprecedented discussions on training rural
residents resulted from that process. On the equity and pay
issue, the Department of Labor [and Workforce Development]
proposed additional salary schedules for force account projects
that would more closely mirror Davis-Bacon wages, in a training
sense, which would bring the two sides closer together.
Number 2088
JEFF ALLING, Owner, Alcan Builders; Member, Associated Builders
and Contractors (ABC), said his views do not necessarily
represent ABC. He said his ire was raised when he learned of
the Saint Mary's project from a fellow contractor. He spoke to
Mr. Kookesh's question, and said that it makes good economic
sense for contractors to work on rural projects because they
hire locals at the prevailing wage rate, which is under Title
36, the Davis-Bacon wage rate, which benefits the villagers. It
is also economically sound for contractors, since bringing
workers into a village could cost $75 - $160 a day. Other
benefits to the village include shipping equipment in and out;
renting of housing by the supervisory contractors; spending
money on air travel, which puts additional money into the local
airline industry; and an additional unspoken cultural benefit,
namely, when contractors work in the villages they meet a lot of
great people. He said at the last job they did in Nome, the
project lasted for four and a half or five months, and they
hired seven or eight skilled and unskilled individuals from
Nome. About 10 years ago, they remodeled the federal building
and did the same thing.
MR. ALLING stated that a better bidding process often translates
into added value for the state, which generally helps the state;
enhancement of the free enterprise system is something the state
should take very seriously. He said that although reference is
being made to maybe .2 percent of the budget, that .2 percent is
important to him, as a general contractor, and although that is
not a lot of money in the overall picture, it is especially
important to contractors who reside in those communities. In
response to Co-Chair Masek's question, he said he was in favor
of HB 67. He added that a gentleman from the operator's union,
who was not able to testify today, had mentioned that the dollar
amount of $250,000 was, to him, a large project.
REPRESENTATIVE KAPSNER asked what rumors he had heard about the
Saint Mary's project that had upset him.
Number 2350
MR. ALLING said he talked with a highway contractor in Nome,
hopefully somebody who would be testifying today, who was upset
over the size of the project and the direction the state was
taking in Western Alaska; she had indicated that it hurt her
company in a big way.
REPRESENTATIVE KAPSNER said there is a serious economic
situation in rural Alaska and that 10 years ago, on the average,
families would make about $6,000 per year fishing, but don't get
that amount anymore. The Saint Mary's project was an effort to
help families who were in dire straits to get back on their
feet.
TAPE 03-3, SIDE B
Number 2374
CO-CHAIR MASEK pointed out that the discussion was getting off
base by focusing on rural funding and jobs rather than on force
accounts.
REPRESENTATIVE KAPSNER said she thought it was germane to
address projects in rural Alaska and across the state in light
of the $250,000 amount.
CO-CHAIR MASEK said the committee was dealing with HB 67, not
the logistics of wages.
REPRESENTATIVE KOOKESH said he would appreciate the latitude of
being allowed to have the discussion.
Number 2331
STEVE WEAVER, Director, Environmental Engineering Program,
Alaska Native Health Consortium, said his organization was not
in favor of HB 67. The consortium builds sanitation facilities
in communities throughout rural Alaska, and often partners with
the Indian Health Service to build sanitation facilities, access
roads, and boardwalks. Through that process, DOT&PF is able to
piggyback on existing projects, and is able to deliver service
at a lower unit cost and to provide faster service for citizens
who need roads, because things are already in place. He said
because they are participants in AO199 [Administrative Order
199] there is a structured training program that allows local
residents to participate and helps to build a pool of trained
construction workers in rural Alaska. He said he saw a problem
with language in the bill, as it removes DOT&PF's management
flexibility, which would allow for working with programs such as
theirs to deliver better value to citizens.
Number 2271
GRAHAM STORY, Nome Chamber of Commerce, spoke in support of HB
67, except for the language referring to the arbitrary amount of
$250,000. He suggested strengthening the phrase, "appears to be
in the best interests of the state" or making the requirements
tougher for the state to meet before going into force
accounting.
Number 2222
JERRY DRAKE, Member, Bethel City Council, said he was adamantly
opposed to HB 67. Very few communities can take on these
projects because they don't have the right equipment and people.
Furthermore, wages are very germane to this debate. He said
when a contractor does a small project in a rural community,
maybe a few people get hired, but not many. However, if the
work is done by force account, a lot of people in the community
work. He wondered if anyone has studied how many people are
then taken off of welfare and are able to take care of
themselves, since that would be a large savings to the state
that nobody seems to be talking about. He said that a lot of
work was done during the past year, crafting the administrative
order that is currently on the table, and that HB 67 and the
companion Senate bill are a slap in the face to all the people
who worked hard.
Number 2130
JIM ADAMS, Director, Maintenance and Operations, Northern
Region, Department of Transportation & Public Facilities, read
the following testimony:
On a much smaller scale, the federal preventative
maintenance program makes a substantial difference in
the condition of Nome area roads. Since very few STIP
[Statewide Transportation Improvement Program]
projects planned out this way score high enough to
come to fruition, force account work performed under
the preventative maintenance program is what is saving
a portion of our roads now. The Saint Mary's project
was a part of the fish disaster situation, and this
played a part (indisc.).
MR. ADAMS, in response to a question from Co-Chair Masek asking
if he was for or against the forced accounting process said he
was just offering food for thought.
Number 2064
JUDY MARTINSON, Northcoast Construction, a 22-year general
contracting company that hires 90 to 100 percent local people,
said that their work has been eroded by DOT&PF forces and, in
particular, the Saint Mary's road, which was not done by
competitive bid; it was done by DOT&PF. The villagers were paid
less than Davis-Bacon wages, and equipment was purchased,
indirectly through the city, to do the work. She said there is
very little work in Northwest Alaska, and what's there is being
done by the state. She said her business has had to let people
go; that their equipment sits; and that they send their
equipment out on the barge, while DOT&PF forces bring equipment
in. She asked, "What's wrong with this picture?" She said the
3 percent previously referred to has a large impact, and that
the "DOT&PF Force Account Report" shows a skewed dollar amount,
since the 3 percent is for labor only.
MS. MARTINSON said state and city forces are getting stronger,
while [Northcoast Construction] is being put out of business:
its revenues used to be up to $2.5 million and now are down to
$10 thousand to $20 thousand. She said if what is going on now
is not socialism, she doesn't know what is. She acknowledged
that the Saint Mary's project resulted from a poor fishing year,
but she heard that when actual work was being performed, people
were fishing. She said for villagers to have more money in
their pockets, the contractors pay Davis-Bacon wages, which are
a lot higher than what temporary, state-hire personnel are paid,
and it is done in a democratic system. She said the stronger
that government becomes and the weaker the private sector
becomes, so does society and freedom go down the drain. She
testified in favor of HB 67 to solve this problem.
REPRESENTATIVE KAPSNER asked what other contracts were lost due
to force accounting.
MS. MARTINSON replied that contracts weren't lost because [her
company] did not get the opportunity to bid in the first place.
She said it was hard to quantify because there is not much work
in the area, and that work is not available for bidding. She
emphasized that Saint Mary's was a big issue because her
business was really looking forward to being able to bid on that
job, but it was taken off the bid schedule.
REPRESENTATIVE KAPSNER asked what other projects were not
available to be bid on, since the figure Ms. Martinson stated
was alarming - dropping from $2.5 million down to $10 thousand
to $20 thousand. She asked what other factors entered into the
alarming drop in income.
MS. MARTINSON said the only work in the area was maintenance,
which is listed in the force account report, although she didn't
know the specific breakdown. She added that they are grateful
for the small maintenance contract that they have for next year.
REPRESENTATIVE KAPSNER said she hoped things would got better
for Ms. Martinson under the new administration, with the
governor's commitment to building roads, and said that she was
sorry to hear of Ms. Martinson's loss. Representative Kapsner
added that the Saint Mary's fishermen were not fishing
commercially during that year, but that whatever fishing they
were doing was for subsistence.
Number 1780
STUART JACQUES (ph), noting that he is a member of the board of
directors for the Association of Building Contractors, said he
was not speaking for the board, and that he was in favor of HB
67. He said the state should not be in the business of
competing with and potentially taking work away from the public
sector. He said about 10 years ago, the Alaska State Housing
Corporation became a contractor, doing work for other agencies,
and to some extent, was doing something similar to DOT&PF's
piggybacking with other agencies. In reference to a previous
comment that if force account projects were not done in the
villages, then jobs would be taken away from those villagers, he
thought that to be incorrect because the work would still occur.
The question would be whether villagers would work those jobs.
He said the answer is a matter of training, and that if the
villagers were trained, contractors would hire them. He said
that rural training is part of the answer, if the desire is to
employ people who live in the Bush. He said that $250,000 is a
small part of the budget, depending on one's perspective, and
that to some, it is a big number. He does not believe that
force account work is done nearly as effectively by the state as
it would be by the contracting sector.
Number 1627
REPRESENTATIVE KOOKESH said he would like to hear a policy
decision from the administration.
CO-CHAIR MASEK commented that the finance committee could
address concerns about HB 67 that were raised during the
meeting.
The committee took an at-ease from 2:42 p.m. to 2:45 p.m.
CO-CHAIR MASEK asked if the sponsor wanted to respond to
Representative Kookesh's statement with regard to the
administration's addressing of Administrative Order 199.
CO-CHAIR HOLM said the new administration would make its own
decisions as to how it would relate to Administrative Order 199,
and said that to hold the bill for that purpose would not be
prudent.
Number 1540
REPRESENTATIVE KAPSNER asked if an amendment would be
entertained. She said part of the compromise that was reached
with the previous working group was they determined it would be
beneficial to have pre- and post- bid conferences where
communities could weigh in, letting it be known how many workers
were available, and who would be eligible for work. She asked
if such an amendment could be considered.
CO-CHAIR HOLM declined consideration at this point because this
was a contracts issue, which was not being addressed in this
bill. He said his goal was to try to limit DOT&PF's ability to
contract outside of the process of competitive bidding.
REPRESENTATIVE KOOKESH referred to Representative Fate's earlier
comment of focusing the debate on amount of $250,000, and asked
if the sponsor would consider an amendment that would raise the
amount. He said he would appreciate a discussion on the given
amount, or, if not, wondered if the sponsor would entertain a
motion to raise the amount.
CO-CHAIR HOLM respectively declined, saying that at this time,
he thinks it is appropriate to keep the $250,000 since the same
number is being considered in the Senate version.
REPRESENTATIVE KOOKESH said in that case, his vote would be
"no."
CO-CHAIR MASEK mentioned that the bill would be referred to the
House Finance Committee, where the dollar amount would be
further considered.
Number 1391
REPRESENTATIVE FATE moved to report HB 67 out of committee with
individual recommendations and the accompanying zero fiscal
note.
Number 1385
REPRESENTATIVE KAPSNER objected.
A roll call vote was taken. Representatives Fate, Kohring,
Holm, and Masek voted in favor of reporting HB 67 from
committee. Representatives Kapsner and Kookesh voted against
it. Therefore, HB 67 was reported out of the House
Transportation Standing Committee by a vote of 4-2.
ADJOURNMENT
There being no further business before the committee, the House
Transportation Standing Committee meeting was adjourned at 2:45
p.m.
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