Legislature(2001 - 2002)
04/11/2001 09:54 AM Senate FIN
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* first hearing in first committee of referral
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MINUTES
SENATE FINANCE COMMITTEE
April 11, 2001
9:54 AM
TAPES
SFC-01 # 72, Side A
SFC 01 # 72, Side B
CALL TO ORDER
Co-Chair Pete Kelly convened the meeting at approximately 9:54 AM.
PRESENT
Senator Pete Kelly, Co-Chair
Senator Jerry Ward, Vice Chair
Senator Gary Wilken
Senator Lyman Hoffman
Senator Donald Olson
Senator Lyda Green
Also Attending: JIM DUNCAN, Commissioner, Department of
Administration; LARRY WALSH, Director/Chief Technology Officer,
Information Technology Group, Department of Administration; KAREN
MORGAN, Deputy Director, Communications Services, Information
Technology Group, Department of Administration; DEL SMITH, Deputy
Commissioner, Department of Public Safety; WENDY REDMAN, Vice
President, University Relations, University of Alaska
SUMMARY INFORMATION
SB 29-REAPPROPRIATIONS & CAPITAL APPROPRIATIONS
The Committee heard overviews on the Alaska Telecommunications
Partnering Project the Alaska Land Mobile Radio Project and
University of Alaska capital projects requests. The bill was held
in Committee.
SENATE BILL NO. 29
"An Act making capital appropriations and capitalizing funds;
making appropriations under art. IX, sec. 17(c), Constitution
of the State of Alaska, from the constitutional budget reserve
fund; and providing for an effective date."
JIM DUNCAN, Commissioner, Department of Administration, stressed
the telecommunications project would change the way
telecommunications services are delivered in the state. He
emphasized the amount of the contract could be more then $100
million for a successful vendor. For this reason, he assured, the
Department has been careful in proceeding with the contract award,
following procurement laws closely. He added that the bargaining
units of affected state employees have been consulted to ensure the
employees' needs are addressed and to prevent conflicts with
existing union contracts. He concluded with assurances that
proposals are being closely evaluated as well.
Commissioner Duncan referenced a handout: Overview of the State of
Alaska Telecommunications Partnering Project: A Comprehensive
Solicitation for Telecommunications Services, supplied by the
Department. [Copy on file.] He began with page 11, which reads as
follows.
Where are we in the process?
· Received three proposals from three vendors
· Completed Initial Evaluation process
· PEC, three subcommittees, ITG Management
· Gartner Group Consulting Services
· Original Notice of Intent Date 15 March 2001 delayed
· Vendor Response more complex
· Conducted Vendor Discussions
· Requested Best and Final Offer
· This required amendment to Gartner contract
· Extension of time
· Increased costs due to BAFO and contract negotiations
Commissioner Duncan explained the deadline of March 15 had to be
delayed because the matter was more complex than anticipated. As a
result, he stated, the Department would be unable to consult with
the Legislature before awarding the contract as originally
intended. He reminded that language contained in the FY 01
operating budget allows the Department to transfer funds from other
agencies, with approval from the Legislative Budget and Audit
Committee, if necessary for this project. He noted there could be
some budgetary impact incurred in FY 02, but that the intent is
that funding appropriated for FY 01 would be sufficient.
Commissioner Duncan recited page 12 as follows.
RFP (Request for Proposals) Timeline
Event/Milestone Date
RFP Issued 3 August 2000
Proposals Due 15 December 2000
Submission by State of Requests
for Clarification 17 January 2001
Initial Evaluation Process 1-28 February 2001
Vendor Discussions 21-22 March 2001
Issue Best and Final Request 30 March 2001
Vendor Site Visits 1-3 May 2001
Final Evaluation Process 1 May - 31 July 2001
Notice of Intent to Award & Contract
Negotiations 1 August 2001
Commissioner Duncan opined the project has had responsive bidders
and it would be successful. He qualified there is no assurance a
contract would be awarded if one is not found to be in the best
interest of the state, but there is assurance that the process
would be completed.
Co-Chair Kelly pointed out funds for other Information Technology
(IT) projects are included in the FY 02 capital budget. He asked
for a brief description of why these are necessary.
Commissioner Duncan responded these items reflect IT activities as
currently practiced in the state. He explained that if a contract
were not awarded, the current systems would need to be expanded to
deliver telecommunication services. He stated that if a contract
were awarded, the funds would still be needed to pay the service
provider. He commented that a contract would not result in an
overall cost reduction, but there would be increased flexibility
and capacity in delivering telecommunication services.
LARRY WALSH, Director/Chief Technology Officer, Information
Technology Group, Department of Administration, referred to page 3
as follows.
Project Size - FY99 Costs:
Total Statewide Telecommunications Costs $29.1 Million
In Scope Costs $21.5 Million
ITG $8.8 Million
Other State Agencies $12.7 Million
Out of Scope Costs (in DOA ) $7.6 Million
Co-Chair Kelly referred to the out of scope costs and asked for a
definition of "in scope costs".
Mr. Walsh gave e-mail as an example. He referred to page 4, which
contains a pie chart titled as follows.
Project Size: The Whole Ball of Wax
Today's Telecommunications Costs In Scope of RFP + $21.5
Million*
*Costs for agencies reporting in AKSAS
Mr. Walsh stated the items shown on the pie chart reflect the
services the RFP stipulates the vendor would provide as part of
this contract. He listed telephone services, network services,
satellite transport and maintenance and operations of the SATS
microwave system as some of the services. He reiterated
Commissioner Duncan's comments that telecommunication activities
are growing. Mr. Walsh stressed the Internet alone grows 40
percent annually. As a result of the "technological explosion", he
stressed, the State needs a partner to help deliver services.
Mr. Walsh referred to page 7 as follows.
Who are the Participants?
· All executive branch agencies
· Alaska Court System*
· Alaska State Legislature*
· University of Alaska*
· Alaska Railroad*
· *Extent of participation is voluntary
Mr. Walsh then addressed page 8 as follows.
What is the Scope of the RFP?
Mandatory Requirements
Bundle 1 - Wired Telephone Services
· Basic and enhanced local service
· Long distance and toll-free access
· Audio teleconferencing
Bundle 2 - Data Network Services
· WAN connectivity
· Internet access
Bundle 3 - Video Services
· Video teleconferencing
Bundle 4 - Paging Services
· Statewide paging system
· Private vendor provided paging
Bundle 5 - Cellular Services
Bundle 6 - Satellite Transport Services
Bundle 7 - Support Services
· Network monitoring and management
· Centralized help desk for:
ΠProblem resolution
ΠInter-service coordination
· Integrated data security
Bundle 8 - SATS Microwave System
· Management and Operations
· Maintenance and Repair
Mr. Walsh continued with page 9.
What is the Scope of the RFP?
Optional Requirements and Resource Bundles
Optional Service Bundles
Bundle 9 - Satellite Telephony Services
Bundle 10 - Satellite Earth-Station Maintenance
and Repair
Option A - Satellite Earth-Station Access
Option B - SATS Microwave Site Access
Option C - SATS Microwave Excess Bandwidth Access
Mr. Walsh next read page 10 as follows.
What is NOT in Scope?
Two Way Radio
· This will be provided by the LMR Vendor of the
Emergency Communications Project
Computing
· Email
· Web Based Services
Mr. Walsh directed the Committee's attention to page 16 and read
the following.
Why was Radio Excluded from the RFP?
· LMR Design Process was underway but not complete
· RFP was a state only bid and its components did not
require the level of interoperability that is required
with LMR
· Most telecommunications vendors that would respond to the
Telecommunications RFP did not support two-way radio as a
regular line of their business
Co-Chair Kelly requested a brief statement supporting what this
project would accomplish and how it would improve the current
situation.
Mr. Walsh relayed he recently attended a conference on technology
and governmental issues. He learned that the speed of a computer is
doubling every 15 months and would continue to do so for the next
ten years. As a result, he expressed, there is a "groundswell of
new opportunities", which would continue to increase. He also told
of the amount of information that could be transmitted via fiber
optic cable and how this capability is also continuing to increase.
Because of this, he stated, the state needs to "partner up with a
vendor who has that vision and [with whom] we can share our vision
of what the State of Alaska needs in telecommunications."
Co-Chair Kelly gave an analogy of the state currently using "copper
wire", which is incompatible with "glass wire". He explained the
state's current system is not compatible with the technological
possibilities that exist elsewhere in the world.
Mr. Walsh clarified the current system could be made compatible
through separate procurements, using a "project by project"
approach.
Co-Chair Kelly remarked that the current system would have to be
upgraded regardless of how it is done in order to be compatible
with the current and potential technology.
Mr. Walsh stressed the state has a "great team" that is "lean and
mean" in the amount of services it is able to provide. However, he
expressed if the state combines efforts with the private sector,
even more services are possible. He noted the possibilities in
rural areas are even greater then in urban areas.
Commissioner Duncan responded that, by partnering with the private
sector, meeting the demands of the state by taking advantage of,
and responding to, new technologies could be done in a timely
manner and in a cost effective manner. He stated that although the
current staff does a "good job", government could not respond as
quickly as could a private provider.
Senator Hoffman asked how much of the technology purchased with
this $29.1 million would be obsolete in five years given the speed
of the changes.
Mr. Walsh responded that a large portion of the funds would be paid
to the vendor for the operating expenses of providing services.
Therefore, he stated, much of the funds would be to "use
technology" rather than "purchase technology". He remarked that the
ability to position the state to take advantage of new technology
is another benefit to having a partner in the private sector. He
emphasized that technology is always changing and that obsolete
equipment and systems would always be an issue.
Senator Olson understood there is an effort to change from analogue
to digital systems to allow information to be transmitted faster.
However, he stressed in rural areas, the speed of technology is not
an issue since none of the technology is available. He asked what
this project would provide to villages, especially rural school.
Mr. Walsh told of investigations of wireless and satellite delivery
of these services, which he noted is "exploding". He said it is a
hope that using a private service provider would assist in bringing
IT services to Rural Alaska.
Senator Olson asked how the Commissioner could insure the $21.9
million would be a one-time only expenditure.
Commissioner Duncan stressed this is not a one-time project, and
the expenditures are anticipated to be ongoing at the same or
higher levels.
Commissioner Duncan informed that the RFP specifically directs
bidders to "be aware of the impacts on rural Alaska and to address
that."
Co-Chair Kelly assured Senator Olson, that the intent of this
project is to pass the burden of keeping technology current along
to the private vendor.
Senator Olson understood. However he commented that as a private
business operator, "you tend to go where the money and the business
is at, which tends to leave out our neck of the woods."
KAREN MORGAN, Deputy Director, Communications Services, Information
Technology Group, Department of Administration, stated that one of
the primary reasons to move forward with this project was to
address the need of providing services to rural Alaska. She told of
criticisms that the state owns and operates IT systems, and these
criticisms have been most detrimental to the state's ability to
provide services in rural areas. She informed the Department had
held a meeting in Bethel, specifically to address rural needs.
DEL SMITH, Deputy Commissioner, Department of Public Safety,
referenced the handout titled: State of Alaska, Emergency
Communications: Land Mobile Radio Project Overview, provided by the
Department of Administration. [Copy on file.] He began with page 2,
which listed the members of the executive council as follows.
Alaska Land Mobile Radio (ALMR)
Executive Council
· Colonel Sue Ann Olsavicky, Department of Defense Alaska
· Del Smith, Deputy Commissioner, Alaska Department of
Public Safety
· Doug Robinson, Alaska Municipal League Representative
· Mike Lewis, US Fish & Wildlife, Non-Department of Defense
Federal Government Representative
Mr. Smith recited page 3 as follows.
Project Goal and Approach
Goal
· To build a reliable and effective two-way radio voice
communication system capable of ensuring the safety
and well-being of all Alaskans.
Approach
· Federal, state and local governments work together
· Share resources and property
· Share costs
· Implement in phases
· Share in operations and maintenance
· Use an open, industry standard - Project 25
· Competitively Procure wherever possible
Mr. Smith clarified land mobile radios as those in police cars,
snowplows and any other land based system.
Mr. Smith next referenced Page 4 as follows.
ALMR Objectives:
· Create a partnership across federal, state and local
jurisdictions to build and operate an inter-operational
two-way radio system for day to day and emergency uses.
· Leverage federal frequency mandates to promote the
project.
· Enhance personnel safety and operational capabilities.
· Minimize federal, state and local government spending.
· Use existing federal, state and local government assets.
· Implement in a phased approach.
· Share the infrastructure and costs of the systems among
all participants.
Mr. Smith spoke of a "trunk system", which allows communication
between multiple parties and is beneficial in the case of an
emergency response situation.
Mr. Smith referenced page 6, which reads as follows.
Why are we doing this?
· Need to replace equipment
ΠExisting 2-way equipment is old, Analog & "Stove-
Piped"
ΠTechnology is changing from analog to digital
· Limited spectrum
ΠFederal Mandates
· Need to interoperate
ΠMiller's Reach Fire; Seward avalanches; Winter 2000
Alaska Railroad Spill
· Cost efficiencies from sharing
ΠBy working together we can achieve the system no
single entity can afford alone.
Mr. Smith continued with page 7 as follows.
Why not a satellite solution?
· Satellite solutions rarely work well inside buildings
(i.e. GPS systems don't work well inside a simple wood
structure.)
· Terrain or vegetation obstructions can degrade the
connection.
· Time delay affects multi-user group conversation.
· Satellite-based solutions are usually one-to-one.
Emergency situations require one-to-many broadcasts to
respond quickly and effectively.
Mr. Smith noted the decision to not use a satellite system was
reached after presentations on the matter here heard by the
Council.
Mr. Smith referred page 8 as follows.
Why Project-25 as the Standard?
· APCO Project 25 is a joint effort of US federal, state
and local government with support from the US
Telecommunications Industry Assoc. (TIA).
· APCO is the Association of Public-Safety Communications
Officers.
· P-25 is a user controlled standards development process.
· Four Manufacturers are working on P-25 Equipment today.
· Goals of the standard are:
ΠProvide high performance, digital, narrowband
radios for all public-safety needs.
ΠProvide maximum radio spectrum efficiency, ensuring
competition throughout the life of the system and
ensuring the equipment is user-friendly.
Mr. Smith next referenced page 9, which reads as follows.
ALMR - Participating Agencies
· DOD
ΠHQ Alaskan Command
ΠUS Army Alaska
rd
Π3 Wing USAF
ΠUS Navy Alaska
ΠAlaska National Guard
· Non-DOD
ΠDepartment of Interior
ΠBureau of Land Management
ΠFederal Law Enforcement Agencies
ΠNational Parks Service
ΠBureau of Indian Affairs
ΠFish and Wildlife Service
ΠOffice of Aircraft Services
ΠAlaska Geological Survey
ΠFederal Communications Commission
ΠFederal Aviation Administration
ΠUS Coast Guard
ΠState of Alaska
· Department of Administration
· Department of Community and Economic
Development
· Department of Corrections
· Department of Education and Early Development
· Department of Environmental Conservation
· Department of Fish and Game
· Department of Health and Social Services
· Department of Labor and Workforce Development
· Department of Military and Veterans Affairs
· Department of Natural Resources
· Department of Public Safety
· Department of Revenue
· Department of Transportation and Public
Facilities
· Office of the Governor/Safety Section
· Alaska Court System
· University of Alaska
· Alaska Railroad
ΠAlaska Municipal League
· Includes most locals under municipal authority
Mr. Smith shared the local governments are represented on the
council and that each participating local government agency was
interviewed regarding their needs.
Mr. Smith listed the items on pages 12 and 13, which read as
follows.
ALMR Milestones
· August 1997
ΠMemorandum of Understanding (MOU) between federal,
state and local government leaders to work together
on interoperable concept for a statewide public
safety emergency communication system.
· March 1999-June 1999
ΠDecision made to peruse APCO 25 radio system
through a RFI Process, TIC Review and ALMR
deliberation.
ΠLMR Executive Council completes a Capital
Improvement Plan for a cooperative communications
system with all agencies sharing in the cost of an
emergency communication system.
· September 1999-May 2000
ΠDOD conducts and completes needs assessment for DOD
requirement.
· August 2000
ΠState and local government needs assessment begins.
ΠAOA issues Telecommunications RFP.
· September/October 2000
ΠFederal funding obtained to begin DOD build.
· January 2001
ΠDOD contract awarded. DOD/Alaska Northern region
scheduled for completion in early 2002.
· Legislative Session 2001
ΠCIP request for 16.2 million dollars to begin SOA
build.
· March 2001
ΠReceived State and Local Government design
· April 2001
ΠMemorandum of Understanding (MOU) re-adopted by the
federal, state and local government representatives
to move forward with the implementation of a
cooperative solution.
Mr. Smith noted that of the $16.2 million state portion of the
project, $1.3 is general funds. He informed the Department is
attempting to secure federal funds for the remaining amount.
Co-Chair Kelly asked the estimated percentage of federal funds to
general funds to operate this system in future years. He also asked
whether the general fund would be considered matching funds to a
federal appropriation.
Mr. Smith responded the intent is to secure the maximum amount of
federal funds for the program, possibly using general funds to
leverage federal receipts.
WENDY REDMAN, Vice President, University Relations, University of
Alaska, testified to the $6,325,000 for the University's capital
budget projects included in the Governor's proposed FY 02 budget.
She listed the projects as follows. She stated the priority
criteria for selecting projects is the same for the Board of
Regents as that employed by the Office of Management and Budget.
SAFETY AND HIGHEST PRIORITY RENEWAL AND REPLACEMENT
$4,000,000
Reference No.: 34507
TELECOMMUNICATIONS EQUIPMENT IMPROVEMENTS
$1,875,000
Reference No.: AMD34508
Ms. Redman noted this item had previously been presented to the
Committee.
UNIVERSITY OF ALASKA SMALL BUESINESS DEVELOPMENT CENTER
$450,000
Reference No.: 34516
Ms. Redman stated the center is located in Anchorage but serves the
entire state. She pointed out this $450,000 general fund
appropriation would secure approximately $5 million.
AIR TRAFFIC CONTROL SIMULATOR
$2,500,000
Reference No.: 34513
Ms. Redman emphasized this appropriation consists entirely of
federal funds.
ARCTIC REGION SUPERCOMPUTER PURCHASE
$30,000,000
Reference No.: 34517
Ms. Redman noted this item also utilizes only federal funds.
SFC 01 # 72, Side B 10:41 AM
Senator Wilken asked if there are other priority projects that are
not included in the governor's proposed budget.
Ms. Redman responded the Board of Regents had identified the
Community Campus Improvement project and smaller replacement/repair
projects in Sitka, Bristol Bay, Ketchikan and Palmer. She said
funding for these items is approximately $7 million. She added the
completion of the Museum Expansion Project in Fairbanks, Phase II
of the Egan Classroom Project in Juneau, and $1 million to continue
planning efforts of the science facilities in Anchorage and
Fairbanks.
Ms. Redman stated the Governor chose among the projects submitted
by the Board of Regents to determine which would be included in the
FY 02 budget proposal.
Senator Wilken clarified the Board of Regents selected the museum,
classroom and science facilities projects as top priorities.
Ms. Redman affirmed.
Co-Chair Kelly after all it was abbreviated. Thank you.
ADJOURNMENT
Co-Chair Pete Kelly adjourned the meeting at 10:44 AM
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