SB 125: "An Act relating to protests of state contract awards, to claims on state contracts and to hearings under the State Procurement Code; making conforming amendments in the State Procurement Code; and providing for an effective date."
00 SENATE BILL NO. 125 01 "An Act relating to protests of state contract awards, to claims on state contracts and to 02 hearings under the State Procurement Code; making conforming amendments in the 03 State Procurement Code; and providing for an effective date." 04 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 05 * Section 1. AS 36.30.040(a) is amended to read: 06 (a) Except as provided in AS 36.30.627(b), the [THE] commissioner shall 07 adopt regulations governing the procurement, management, and control of supplies, 08 services, professional services, and construction by agencies. The commissioner may 09 audit and monitor the implementation of the regulations and the requirements of this 10 chapter with respect to using agencies. 11 * Sec. 2. AS 36.30.620(b) is amended to read: 12 (b) If a claim [CONTROVERSY] asserted [BY A CONTRACTOR] 13 concerning a contract awarded under this chapter cannot be resolved by agreement, the 14 procurement officer shall, after receiving a written request by the contractor for a
01 decision, issue a written decision. The procurement officer shall make the decision 02 not [SHALL BE MADE NO] more than 90 days after receipt [BY THE 03 PROCUREMENT OFFICER] of all necessary information from the contractor. 04 Failure of the contractor to furnish additional [NECESSARY] information required 05 by [TO] the procurement officer by the date required shall result in a decision 06 being made without the information, and the contractor may not use the 07 information to support the claim during [CONSTITUTES A WAIVER OF] the 08 claim or appeal process. Before issuing the decision the procurement officer shall 09 review the facts relating to the claim [CONTROVERSY] and obtain necessary 10 assistance from legal, fiscal, and other advisors. 11 * Sec. 3. AS 36.30.620(c) is amended to read: 12 (c) The time for issuing a decision under (b) of this section may be extended 13 for good cause by the commissioner of administration, or for a claim 14 [CONTROVERSY] involving a construction contract or procurement for the state 15 equipment fleet, the commissioner of transportation and public facilities, if the claim 16 [CONTROVERSY] concerns an amount in excess of $50,000. The contractor shall 17 be provided with an opportunity to comment on the request for an extension. If 18 the extension is granted, the [THE] procurement officer shall notify the contractor in 19 writing that the time for the issuance of a decision has been extended and of the date 20 by which a decision shall be issued. 21 * Sec. 4. AS 36.30.620(d) is amended to read: 22 (d) The procurement officer shall furnish a copy of the decision to the 23 contractor by certified mail or other method that provides evidence of receipt. The 24 decision must include [A] 25 (1) a description of the claim [CONTROVERSY]; 26 (2) a reference to the pertinent contract provisions; 27 (3) a statement of the agreed upon and disputed facts; 28 (4) findings of fact about the claim; 29 (5) a determination of any amount payable; 30 (6) a statement of reasons supporting the decision; and 31 (7) [(5)] a statement substantially as follows:
01 "This is the final decision of the procurement 02 officer. This decision may be appealed to the 03 commissioner of (administration/transportation and 04 public facilities). If you appeal, you must file a written 05 notice of appeal with the commissioner within 14 days 06 after you receive this decision." 07 * Sec. 5. AS 36.30.620(e) is amended to read: 08 (e) If the procurement officer does not issue a written decision [IS NOT 09 MADE] by the date it is due, the contractor may proceed as if the procurement officer 10 had issued a decision adverse to the contractor. 11 * Sec. 6. AS 36.30.625 is amended by adding new subsections to read: 12 (d) Notwithstanding (a) of the section, AS 36.30.630, and 36.30.670, if the 13 amount of a construction contract claim is less than $250,000, an appeal from an 14 original procurement officer's decision on the claim shall be resolved as follows: 15 (1) by arbitration under AS 36.30.627 if the claimant requests 16 arbitration in its appeal; 17 (2) by a hearing officer in a non-arbitration proceeding under 18 AS 36.30.627 if the claimant does not request arbitration in its appeal; 19 (e) Notwithstanding (a) of the section, AS 36.30.630, and 36.30.670, if the 20 amount of a construction contract claim is $250,000 or more, an appeal from an 21 original procurement officer's decision on the claim shall be resolved as follows: 22 (1) by arbitration if the agency and the contractor agree to handle the 23 appeal by arbitration under AS 36.30.627; 24 (2) by a hearing officer in a non-arbitration proceeding under 25 AS 36.30.627 if the agency and the contractor do not agree to handle the appeal by 26 arbitration under AS 36.30.627. 27 (f) The provisions of (d) and (e) of this section may not be interpreted to 28 prevent a contractor or the agency from using a dispute resolution process other than 29 the arbitration or non-arbitration proceeding allowed under (d) and (e) of this section if 30 both the contractor and the agency agree to the use of another dispute resolution 31 process.
01 * Sec. 7. AS 36.30 is amended by adding new sections to read: 02 Sec. 36.30.627. Arbitration and non-arbitration proceedings in certain 03 contract construction claim appeals. (a) This section governs an appeal under 04 AS 36.30.625(d) or (e). If there is a conflict between this section and another 05 provision of AS 36.30.550 - 36.30.699, this section controls. 06 (b) An appeal under this section shall be handled as provided by the 07 commissioner of transportation and public facilities by regulation, including the 08 selection of a presiding officer, except that the agency and the contractor may change 09 the procedures by mutual assent. 10 (c) The claimant bears the burden of proving the claim. 11 (d) The agency and the contractor may be represented by an attorney in an 12 appeal under this section. 13 (e) When an appeal is held under this section, the claimant may not raise a 14 factual issue or theory of recovery unless the issue or theory was presented to and 15 decided by the procurement officer in the procurement officer's original decision 16 under AS 36.30.620(b), except that a claimant may increase the contractor's 17 calculation of damages if the increase arises out of the same operative facts on which 18 the original claim was based. 19 (f) The venue for an appeal under this section is the judicial district in this 20 state where the office of the agency that entered into the contract is located, or at 21 another location in the state that is acceptable to the agency and the contractor. 22 (g) If the agency or the contractor fails to appear at a proceeding under this 23 section, the presiding officer may proceed in the absence of the agency or contractor. 24 (h) After the conclusion of the hearing, an arbitrator shall issue a final 25 decision, and a hearing officer shall issue a recommended decision, within 26 (1) 30 calendar days for a claim less than $100,000; 27 (2) 45 calendar days for a claim of $100,000 or more, but not 28 exceeding $1,000,000; or 29 (3) 60 calendar days for a claim of more than $1,000,000. 30 (i) If the presiding officer demonstrates good cause for an extension of time 31 allowed under (l) of this section, the commissioner of transportation and public
01 facilities may grant the presiding officer an extension of time to issue the decision. 02 (j) Unless an extension is granted under (i) of this section, if a presiding 03 officer fails to issue a decision by the deadline under (h) of this section, the 04 commissioner of transportation and public facilities may not use the presiding officer 05 for a proceeding under this section for one year after issuance of the decision. 06 (k) A decision of a presiding officer under this section must be in writing and 07 based on the contract, the evidence presented to the presiding officer, and applicable 08 law. The decision of the presiding officer must contain a finding identifying any 09 money due to the contractor or the agency. 10 (l) A hearing officer shall deliver a copy of the hearing officer's recommended 11 decision to the commissioner of transportation and public facilities. An arbitrator shall 12 deliver a copy of the arbitrator's final decision to each of the following at the same 13 time: 14 (1) the commissioner of transportation and public facilities; 15 (2) the contractor; and 16 (3) the director for the administrative region of the Department of 17 Transportation and Public Facilities where the construction was located. 18 (m) In its decision, the presiding officer shall compare the finding of any 19 money due to the contractor or the agency with the finding of any money due to the 20 contractor or the agency in the original procurement officer's decision. 21 (n) Costs and fees in a proceeding under this section shall be awarded as 22 follows: 23 (1) the agency and the contractor shall share equally the cost of the 24 services of the presiding officer in the appeal under this section; and 25 (2) if the claimant is awarded 26 (A) more money than the other party offered, then the other 27 party shall pay the claimant a percentage, not to exceed 100 percent, of the 28 claimant's attorney fees and costs, excluding the presiding officer's fees; the 29 percentage shall be calculated by 30 (i) determining the difference between the claimant's 31 offer and the other party's offer;
01 (ii) subtracting the other party's offer from the amount 02 awarded to the claimant; and 03 (iii) determining what percentage the amount calculated 04 in (i) of this paragraph is of the amount calculated in (ii) of this 05 subparagraph; 06 (B) less money than the other party offered, then the claimant 07 shall pay the other party a percentage, not to exceed 100 percent, of the other 08 party's attorney fees and costs, excluding the presiding officer's fees; the 09 percentage shall be calculated by 10 (i) determining the difference between the other party's 11 offer and zero; 12 (ii) subtracting the amount awarded to the claimant 13 from the other party's offer; and 14 (iii) determining what percentage the amount reached in 15 (ii) of this paragraph is of the amount reached in (i) of this 16 subparagraph; 17 (3) the same amount as the other party offered, then the claimant and 18 the other party pay their own attorney fees and costs, excluding the presiding officer's 19 fees. 20 (o) Subject to appropriation, any money awarded by an arbitrator's decision 21 shall be paid within 45 days after the date that the arbitrator's decision is delivered to 22 the parties unless the arbitrator's decision is rejected or appealed under (p) of this 23 section. Subject to appropriation, any money awarded by a hearing officer's 24 recommended decision that is approved by the commissioner of transportation and 25 public facilities shall be paid within 45 days after the date that the commissioner's 26 decision is delivered to the contractor and the agency, unless the commissioner's 27 decision is appealed under AS 36.30.685. 28 (p) A final decision by an arbitrator under this section resolves the claim for 29 the contractor and the agency and may not be rejected or appealed to the state courts 30 or another judicial or nonjudicial body, except as provided in AS 09.43.120 - 31 09.43.170.
01 (q) In this section, 02 (1) "agency" means the Department of Transportation and Public 03 Facilities or a contracting agency to whom the responsibility for handling the 04 controversy is delegated by the department under AS 36.30.632; 05 (2) "non-arbitration proceeding" means a proceeding on an appeal 06 under AS 36.30.625(d) that is not an arbitration proceeding; 07 (3) "presiding officer" means the arbitrator in an arbitration or a 08 hearing officer in an appellate proceeding. 09 Sec. 36.30.629. Subpoenas and discovery. The commissioner of 10 administration and the commissioner of transportation and public facilities may 11 (1) issue subpoenas, including subpoenas duces tecum, to compel the 12 attendance of witnesses and the production of documents; 13 (2) allow the taking of depositions for discovery or to perpetuate 14 testimony; 15 (3) refer a subpoena or subpoena duces tecum to the superior court for 16 enforcement and the imposition of appropriate sanctions. 17 * Sec. 8. AS 36.30.630 is amended to read: 18 Sec. 36.30.630. Hearing on a contract claim [CONTROVERSY]. (a) 19 Except as provided in AS 36.30.625(d) and (e), 36.30.627, and (b) of this section, a 20 hearing shall be conducted according to AS 36.30.670 and regulations adopted by the 21 commissioner of administration on a contract claim [CONTROVERSY] appealed to 22 the commissioner of administration or the commissioner of transportation and public 23 facilities or referred to either commissioner under AS 36.30.620(f). 24 (b) Except as provided in AS 36.30.625(d) and (e), within [WITHIN] 15 25 days after receipt of an appeal on a contract claim [CONTROVERSY] the 26 commissioner of administration or the commissioner of transportation and public 27 facilities, as appropriate, may adopt the decision of the procurement officer as the final 28 decision without a hearing. 29 * Sec. 9. AS 36.30.632 is amended to read: 30 Sec. 36.30.632. Delegation. The commissioner of administration and the 31 commissioner of transportation and public facilities may delegate responsibilities
01 under AS 36.30.590 - 36.30.630 [AS 36.30.590 AND 36.30.630] to the head of the 02 contracting agency. 03 * Sec. 10. AS 36.30.680 is amended to read: 04 Sec. 36.30.680. Final decision by the commissioner. A decision by the 05 commissioner of administration or the commissioner of transportation and public 06 facilities after a hearing under this chapter, except for an arbitration proceeding 07 under AS 36.30.327, is final. A decision shall be sent within 20 days after the hearing 08 to all parties by personal service or certified mail, except that a decision by the 09 commissioner of transportation and public facilities involving procurement of 10 construction shall be sent within 45 [90] days after receipt by the commissioner of 11 administration or the commissioner of transportation and public facilities of the 12 hearing officer's decision to all parties by personal service or certified mail. 13 * Sec. 11. AS 36.30.685(a) is amended to read: 14 (a) A final decision of the commissioner of administration, [OR] the 15 commissioner of transportation and public facilities, or an arbitrator under 16 AS 36.30.610, 36.30.627, 36.30.635(a), 36.30.650, or 36.30.680 [AS 36.30.610, 17 36.30.635(a), 36.30.650, OR 36.30.680] may be appealed to the superior court in 18 accordance with the Alaska Rules of Appellate Procedure. 19 * Sec. 12. AS 36.30.687(d) is amended to read: 20 (d) A person who in a matter relating to a procurement or a contract 21 [CONTROVERSY OR] claim under this chapter makes a misrepresentation to the 22 state through a trick, scheme, or device is guilty of a class C felony. 23 * Sec. 13. AS 36.30.695 is amended to read: 24 Sec. 36.30.695. Other rules of procedure. The commissioner may adopt by 25 regulation additional rules of procedure providing for the expeditious administrative 26 review of all contract claims [OR CONTROVERSIES], both before the contracting 27 agency and through an appeal heard de novo. 28 * Sec. 14. AS 36.30.699 is amended by adding a new paragraph to read: 29 (2) "original procurement officer's decision" means the decision that is 30 issued by a procurement officer under AS 36.30.620(b) and on which the 31 commissioner of transportation and public facilities has not taken any action under
01 AS 36.30.630(b). 02 * Sec. 15. The uncodified law of the State of Alaska is amended by adding a new section to 03 read: 04 APPLICABILITY. This Act applies to a contract if the contract is entered into on or 05 after the effective date of this Act. 06 * Sec. 16. The uncodified law of the State of Alaska is amended by adding a new section to 07 read: 08 TRANSITION: REGULATIONS. The commissioner of transportation and public 09 facilities may immediately proceed to adopt regulations necessary to implement this Act. The 10 regulations take effect under AS 44.62 (Administrative Procedure Act), but not before the 11 effective date of the other sections of this Act. 12 * Sec. 17. The uncodified law of the State of Alaska is amended by adding a new section to 13 read: 14 REVISOR'S INSTRUCTIONS. (a) The revisor of statutes shall substitute "claim" for 15 "controversy" in 16 (1) AS 36.30.620(f); 17 (2) AS 36.30.623; 18 (3) AS 36.30.625(a); 19 (4) AS 36.30.625(c); 20 (5) AS 36.30.687(a); and 21 (6) AS 36.30.750(b). 22 (b) The revisor of statutes shall substitute "claims" for "controversies" in 23 (1) AS 36.30.750(a); and 24 (2) AS 36.30.750(b). 25 * Sec. 18. Section 16 of this Act takes effect immediately, under AS 01.10.070(c).