Legislature(1993 - 1994)

03/03/1993 09:07 AM STA

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
                 SENATE STATE AFFAIRS COMMITTEE                                
                          March 3, 1993                                        
                            9:07 a.m.                                          
  MEMBERS PRESENT                                                              
  Senator Loren Leman, Chairman                                                
  Senator Jim Duncan                                                           
  Senator Johnny Ellis                                                         
  MEMBERS ABSENT                                                               
  Senator Mike Miller, Vice Chairman                                           
  Senator Robin Taylor                                                         
  COMMITTEE CALENDAR                                                           
  SENATE BILL NO. 129                                                          
  "An Act relating to the state's chief procurement officer."                  
  SENATE BILL NO. 80                                                           
  "An Act eliminating,  consolidating, changing the membership                 
  requirements  of, and  transferring  the duties  of  various                 
  boards,   commissions,   councils,    panels,   authorities,                 
  corporations,  foundations, and  similar  entities of  state                 
  government; and providing for an effective date."                            
  BUT NOT HEARD THIS DATE.                                                     
  PREVIOUS SENATE COMMITTEE ACTION                                             
  SB 129 - No previous action to record.                                       
  SB  80 - See State Affairs minutes dated 2/10/93,                            
           2/17/93, 2/19/93, 2/24/93.                                          
  SB  33 - See Community & Regional Affairs minutes                            
           dated 2/23/93.                                                      
  WITNESS REGISTER                                                             
  Senator Randy Phillips                                                       
  State Capitol                                                                
  Juneau, AK 99801-1182                                                        
  POSITION STATEMENT:  Offered information on SB 129                           
  Randy Welker, Legislative Auditor                                            
  Legislative Audit Division                                                   
  P.O. Box 113300                                                              
  Juneau, AK 99811-3300                                                        
  POSITION STATEMENT:  Offered information on SB 129                           
  Dugan Petty, Director,                                                       
  Division of General Services                                                 
  Department of Administration                                                 
  P.O. Box 110210                                                              
  Juneau, AK 99811-0210                                                        
  POSITION STATEMENT:  Suggested changes to SB 129                             
  Loren Rasmussen, Chief of Design  &                                          
    Construction Standards                                                     
  Department of Transportation & Public Facilities                             
  3132 Channel Drive                                                           
  Juneau, AK 99801-7898                                                        
  POSITION STATEMENT:  Testified in support of SB 129                          
  ACTION NARRATIVE                                                             
  TAPE 93-15, SIDE A                                                           
  Number 001                                                                   
  Chairman  Leman called  the Senate  State  Affairs Committee                 
  meeting to order at 9:07 a.m.                                                
  SENATOR LEMAN introduced SB 129 (POWERS OF CHIEF PROCUREMENT                 
  OFFICER) as the first order of business.                                     
  SENATOR RANDY PHILLIPS,  Chairman of the Legislative  Budget                 
  and Audit Committee,  said the committee completed  an audit                 
  the  previous month on  a sole source  contract for services                 
  related to opening the Arctic National Wildlife Refuge.   As                 
  a result of the audit, SB 129 was introduced.                                
  Senator Phillips said  SB 129 gives the  procurement officer                 
  more independence in  releasing these contracts; it  changes                 
  the terms of the office from four to six years; it prohibits                 
  the delegation of  duties of the chief  procurement officer;                 
  it sets  the salary  at range  26, step  C; it requires  the                 
  chief procurement officer, rather than the commissioner,  to                 
  determine if the sole source procurement is necessary and in                 
  the public  interest;  it  requires  the  chief  procurement                 
  officer  to  make a  written  determination of  an emergency                 
  procurement;  it   requires  the   procurement  officer   to                 
  independently examine the material facts of the procurement;                 
  and it makes  it a class  A misdemeanor for the  procurement                 
  officer  to   knowingly  make   a  false   statement  in   a                 
  determination under AS 36.30.300.                                            
  Senator Phillips  said he would like to  see the procurement                 
  officer have more  independence and  to make an  independent                 
  decision on these contracts.                                                 
  Number 070                                                                   
  RANDY   WELKER,   Legislative  Auditor,   Legislative  Audit                 
  Division, said the bill was  needed to increase the autonomy                 
  and also increase the level of responsibility  placed on the                 
  chief procurement officer.                                                   
  Since passage of the Procurement Code, the Legislative Audit                 
  Division has  been involved  in numerous  audits across  the                 
  state agencies and consistently have found problems with the                 
  manner   in  which  primarily   sole  source  and  emergency                 
  contracts have been let by agencies.                                         
  Mr. Welker  said in  response to  Senator Phillips'  concern                 
  over the ANWR  contract, the  division has proposed  certain                 
  changes to the  Procurement Code that would  strengthen that                 
  position.   As  the  system is  now,  the chief  procurement                 
  officer primarily relies on statements  made by agencies and                 
  submitted  to  them as  support  for their  determination in                 
  approving  sole  source  limited procurement  and  emergency                 
  Number 135                                                                   
  SENATOR DUNCAN  said he was  not very supportive  of putting                 
  into  statute a fixed salary of  range 26, step C, and asked                 
  why  it  was being  locked in  at  a step  C.   RANDY WELKER                 
  responded that the primary  concern was to set an  amount so                 
  that if the  Administration disagreed with an action  by the                 
  chief   procurement   officer,   they    couldn't,   through                 
  retribution,  reduce  the  salary  of  a  chief  procurement                 
  officer as a  means of  influencing decision or  influencing                 
  that individual  out of  the position.   He  thought it  was                 
  intended  to  set  a  minimum,  not necessarily  a  maximum.                 
  SENATOR LEMAN suggested that the minimum salary could be set                 
  at a minimum  of something less  than range  26, step C  and                 
  then could  be  adjusted  up  to a  range  26,  step  C,  if                 
  Number 2170                                                                  
  SENATOR ELLIS asked if the ANWR  audit spoke to the contract                 
  to the extent of making any  conclusions on the stupidity of                 
  luring people to  Alaska for  750,000 non-existent jobs  and                 
  swelling the welfare rolls.  RANDY WELKER responded that the                 
  primary focus of the audit request was to look at the manner                 
  in which the contract was let.                                               
  Number 192                                                                   
  DUGAN  PETTY,  Director,  Division  of  General  Services  &                 
  Supply,  Department  of  Administration,  related  that  the                 
  department has reviewed the bill  and has the following four                 
  areas of concern with the bill as it is written:                             
       (1)    In Section  2,  it  bars  the chief  procurement                 
  officer from  delegating any  of the  duties that the  chief                 
  procurement  officer  is charged  with  under statute.   The                 
  department  believes  the language  is  too broad,  and they                 
  think  if there  is a need  to identify  determinations that                 
  should not  be delegated, it  should be approached  that way                 
  instead of prohibiting the delegation of all duties.                         
       (2)  Section 2 also sets the annual salary at range 26,                 
  step  C.  Currently,  the chief procurement  officer holds a                 
  title  in  the   partially  exempt   branch  as  the   chief                 
  procurement  officer.     That  position   was  reviewed  by                 
  Personnel and  it was  determined that  the appropriate  pay                 
  range was a range 23.  The department's view is that it is a                 
  perogative of the executive  branch and that range 23  is an                 
  appropriate range for  the duties  of the chief  procurement                 
       (3)  Section  4 relates to emergency procurements.   As                 
  it  is  written,  it  would  require the  chief  procurement                 
  officer to  make a determination  of any emergency,  and the                 
  department  believes that the  statute was set  out to allow                 
  the procurement  officer, not the chief procurement officer,                 
  who  would  be the  person  who  would need  to  initiate an                 
  emergency procurement to have the  flexibility to respond to                 
  emergency situations.   The department  thinks that this  is                 
  adequately addressed in regulations where  they have a class                 
  B emergency set out in regulations.                                          
       (4)   Section 5 relates  to the determinations  made by                 
  the chief procurement officer.   As it is written,  it would                 
  require the  chief procurement  officer to  independently go                 
  back and  verify all material  facts that would  support the                 
  argument  that  there  is  an evidence  for  a  sole  source                 
  determination.  It  will take a  significant amount of  time                 
  for  the   chief  procurement   officer  to   go  back   and                 
  independently  verify each and  every fact.   The net effect                 
  will be to slow down a  process that's already considered by                 
  many to  be cumbersome  and too  slow.   The department  has                 
  proposed some compromise language where if in the opinion of                 
  the chief procurement officer there is a need to go back and                 
  independently verify,  that  they  may  do  the  independent                 
  In  response  to  Senator Duncan's  inquiry  earlier  in the                 
  meeting  as  to  what   the  penalty  was  for  a   class  A                 
  misdemeanor,  Mr. Petty said it  was maximum sentence of one                 
  year  and a fine  of $5,000.   Elsewhere in the  statute, it                 
  does set out that if an  individual participates in a scheme                 
  or  artifice  to   get  around   the  requirements  of   the                 
  Procurement Code, it is set out as a class C felony.                         
  Number 293                                                                   
  SENATOR  PHILLIPS  asked Mr.  Petty  to  come  up with  some                 
  suggested language on  the delegation of powers of the chief                 
  procurement  officer,  as  well  as  suggested language  for                 
  emergency procurements that is addressed in Section 4.                       
  Number 315                                                                   
  LOREN RASMUSSEN, Chief of Design, Construction & Maintenance                 
  Standards, Department of Transportation & Public Facilities,                 
  said  the  department  handles  all  the   procurements  for                 
  construction and for  the state equipment fleet.  They think                 
  the legislation would have some affect on how they determine                 
  emergencies.  A  two-tiered system  for emergencies is  very                 
  appropriate because  they need  to respond  very quickly  to                 
  emergencies. He  stated that DOT would be very supportive of                 
  the changes suggested by Senator Phillips.                                   
  Number 348                                                                   
  SENATOR PHILLIPS asked VERN JONES, Chief Procurement Officer                 
  for the Division  of General Services,  if he could give  an                 
  overview of the $800,000 ANWR contract.   Mr. Jones answered                 
  that he was not  the chief procurement officer at  the time,                 
  but he has reviewed the audit and looked at the request.  He                 
  said it appears that the situation arose that in the opinion                 
  of the Governor's  office, the  lobbying effort was  needed,                 
  but he assumes due to  the workings of Congress that  it was                 
  not possible  to  select a  lobbyist  until such  time  that                 
  Congress  acted, and by that  time, there was not sufficient                 
  time to go out competitively and solicit for this.                           
  Number 370                                                                   
  SENATOR PHILLIPS said he thought there should be due process                 
  in letting these contracts out and  it should be competitive                 
  Number 380                                                                   
  SENATOR LEMAN asked  Mr. Jones if he was aware  of any other                 
  complaints that would justify the changes made in this bill.                 
  VERN JONES  responded that  he was  not aware  of any  other                 
  Number 390                                                                   
  SENATOR LEMAN stated  SB 129  would be held  over until  the                 
  Friday meeting.                                                              
  Number 396                                                                   
  SENATOR LEMAN brought SB 80 (BOARDS,  COMMISSIONS, COUNCILS,                 
  AUTHORITIES)  before  the  committee as  the  next  order of                 
  business.   He directed  attention to  two amendments  being                 
  proposed by Senator Ellis.                                                   
  Number 411                                                                   
  SENATOR ELLIS moved the  adoption of amendment #1.   He said                 
  it would deny the  proposed transfer of the Pioneers'  Homes                 
  Advisory Board duties to the Older Alaskans Commission.                      
  AMENDMENT #1                                                                 
  Delete Sections 24, 25, and 26 in their entirety.                            
  Delete  the  following   references  in  Section  26:     AS                 
  44.21.100, 44.21.110, 44.21.120, and 444.21.130.                             
  Hearing no  objection to amendment  #1, the Chair  stated it                 
  had been adopted.                                                            
  Number 423                                                                   
  SENATOR ELLIS moved the adoption of  amendment #2.  It would                 
  delete  the   sections  of   the  bill   referring  to   the                 
  Telecommunications Information Council.                                      
  AMENDMENT #2                                                                 
  Page 3, lines 9 - 15:  Delete Section 4                                      
  Page 3, line 16 - 20:  Delete Section 5                                      
  Page 4, line 2  & page 5, line 2:  Delete Section 88                         
  Delete Sections 18 through 23                                                
  Delete Sections 27 through 30                                                
  Delete Section 36                                                            
  Page 16, line 19:  Delete AS 44.21.045(c)(1), 44.21.045(f)                   
  Hearing no objection  to amendment #2,  the Chair stated  it                 
  had been adopted.                                                            
  Number 447                                                                   
  SENATOR  ELLIS  stated that  he  would  not  be offering  an                 
  amendment in  the State  Affairs Committee  relating to  the                 
  Permanency Planning  Review Board,  but would  do so  in the                 
  HESS Committee at the request of Senator Phillips.                           
  Number 450                                                                   
  SENATOR DUNCAN moved that CSSB 80  (STATE AFFAIRS) be passed                 
  out of  committee with individual  recommendations.  Hearing                 
  no objection, it was so ordered.                                             
  Number 450                                                                   
  There  being  no   further  business  to  come   before  the                 
  committee, the meeting adjourned at 9:32 a.m.                                

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