Legislature(2015 - 2016)CAPITOL 106
03/29/2016 08:00 AM House STATE AFFAIRS
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| Audio | Topic |
|---|---|
| Start | |
| HB368 | |
| HB24 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| *+ | HB 368 | TELECONFERENCED | |
| *+ | HB 24 | TELECONFERENCED | |
| + | TELECONFERENCED |
HB 24-PROF. SERVICES IN STATE-FUNDED CONTRACTS
9:09:29 AM
CHAIR LYNN announced that the final order of business would be
HOUSE BILL NO. 24, "An Act relating to the procurement of
architectural, engineering, or land surveying services under
state-funded contracts."
9:09:49 AM
REPRESENTATIVE SAM KITO, Alaska State Legislature, presented HB
24, as prime sponsor. He stated that HB 24 would require a
municipality that receives state funding for a construction
project to utilize Qualifications-Based Selection (QBS) in
selecting a design professional for the design component of the
project.
CHAIR LYNN asked Representative Kito to define Qualification-
Based Selection.
REPRESENTATIVE KITO responded that there are already quite a few
municipalities that require Qualifications-Based Selection. He
explained that Qualifications-Based Selection of a design
professional means that when hiring an architect, an engineer, a
lands surveyor, or a landscape architect, the contracting person
must issue a request for proposal (RFP) based on the
individual's or firm's qualifications, as opposed to the price
of the services. He explained that one of the key components
driving QBS is the Brooks Act [Selection of Architects and
Engineers statute, a U.S. federal law passed in 1972] requiring
that federal procurement for design professionals utilize
Qualifications-Based Selection. He said that the State of
Alaska has a "mini" Brooks Act requiring state-funded projects
use Qualifications-Based Selection, which is already being used
with Department of Transportation & Public Facilities (DOT&PF)
construction projects in the state.
CHAIR LYNN asked for clarification that Qualifications-Based
Selection refers to the consideration of professional
qualifications for procurement as opposed to price only.
REPRESENTATIVE KITO responded that HB 24 requires that
qualifications be the selection factor for design services for
projects that are funded by the State of Alaska. He gave
himself as an example: As a civil engineer whose expertise is
in coastal and transportation engineering, if he were to submit
a proposal for a building foundation, even though he is
technically qualified to do the work, his skills and experience
would not make him the most efficient. He went on to say that
HB 24 would require that if the state provides money to a
municipality for a capital project, the contracting person must
look at the qualifications of the individuals that are proposing
the design of the project.
9:13:58 AM
CHAIR LYNN asked, "Would not the RFP specify the requirement for
qualification in a certain type of construction, as well as
price?"
REPRESENTATIVE KITO responded, "Not necessarily, although it
does happen at times." He said that an owner, with a
construction budget of $100 million for a project, budgets for
the design, which is typically four to eight percent of the cost
of the project. He said that design costs could be higher if
the project is a very complex structure. He went on to say that
after selection of the designer with the best qualifications,
the owner then starts negotiating the price. If the designer
comes back asking for a design cost that is 20 percent of the
cost of the project, then the owner has to reassess.
Representative Kito maintained that the owner still has complete
control over the design cost of the project. He said the design
cost could range as high as ten or 12 percent depending on the
complexity of the project.
9:15:57 AM
CHAIR LYNN mentioned that he remembered Representative Kito
discussing this concept with him before Representative Kito
became a representative.
REPRESENTATIVE KITO agreed that he has worked actively with a
group called the Alaska Professional Design Council through
which various design entities collaborate and lobby to the
legislature on various issues that are important to them.
9:16:40 AM
REPRESENTATIVE KELLER asked if HB 24 was a risk management tool
and, if so, what risk would be managed.
REPRESENTATIVE KITO voiced his belief that the proposed
legislation would offer a management tool for municipalities in
their attempt to spend public money most efficiently in the face
of a declining budget. He added that the proposed legislation
would ensure that appropriate qualified professionals are being
utilized for projects paid for with public funds, therefore
decreasing the overall construction cost of a project.
REPRESENTATIVE KELLER repeated Representative Kito's claim that
the proposed legislation was not so much a risk management tool
as a tool to promote efficiency. He asked what the efficiency
would be and mentioned specifically the effect HB 24 might have
on nonprofits that receive state money but operate on a limited
budget.
REPRESENTATIVE KITO stated his expectation that an entity
soliciting for the design of a project funded by state money
would select the most qualified architect, who is accustomed to
working on smaller commercial buildings and can be more
efficient than another who doesn't have that experience. He
said that HB 24 would also be a risk management tool in that an
appropriately qualified designer poses less risk for that
project to go over budget or to be constructed incorrectly.
9:20:07 AM
REPRESENTATIVE KELLER opined that if procurement is in the
position to define qualifications, then the scope of qualified
professionals becomes narrower. He stated that he appreciated
the concern for qualified professionals but wondered if the
competition would be diminished.
REPRESENTATIVE KITO stated his belief that competition would not
be diminished under HB 24. He opined that most engineers,
architects, and land surveyors are accustomed to competing for
work, and competition creates a healthy environment for the
profession. He added that HB 24 would keep professionals
engaged in their field, resulting in greater efficiency in their
design work. He added that in the engineering profession, of
which he is familiar, a new engineer is mentored by a more
experienced engineer to gain experience and, ultimately, brings
that experience to his/her proposals.
9:23:15 AM
REPRESENTATIVE TALERICO referred to page 2, line 18-21, which he
claimed would use price as an added factor in awarding bids, and
read as follows:
In order for the contracting person to include price
as a factor in selection, a majority of the persons
involved by the contracting person in evaluation of
the proposals shall be registered in the state to
perform architectural, engineering, or land surveying
services.
REPRESENTATIVE TALERICO stated his concern for school districts
and municipalities in rural locations, where the selection
process is generally done by committee or city council. He
opined that he is not sure how many professionals would be
available to serve on a selection committee, making it difficult
to select based on qualifications.
9:25:32 AM
REPRESENTATIVE KITO gave a two-part answer to Representative
Talerico's question. He explained that cost selection can be
used for services that are repetitive in nature, like structural
inspections or surveys, and the language in HB 24 follows
language from the Department of Transportation & Public
Facilities (DOT&PF) procurement regulations, which require the
appropriate design professional on the selection team.
REPRESENTATIVE KITO cited the example of school construction in
the second part of his answer to Representative Talerico. He
said that there is current law requiring school districts
utilize Qualification-Based Selection, and the appropriate
professionals are invited to participate in the selection
process. He added that typically schools are not looking for a
cost-type procurement where they are soliciting for a repetitive
service, but they would be using QBS. The statutes and
regulations also provide that for schools wanting to do an
alternative procurement - that is, design-build, construction-
manger, general contractor, or some combination of design and
construction together - the department can engage with the
school district to make sure the technical aspects of that
procurement are being done appropriately.
9:27:59 AM
REPRESENTATIVE VAZQUEZ asked what this bill tries to prevent
that is a current problem.
REPRESENTATIVE KITO stated that the concern that prompted him to
introduce the bill is the concern that any state money put into
public projects would serve the purpose of the project as
efficiently and inexpensively as possible and avoid design and
construction failures.
9:29:18 AM
REPRESENTATIVE VAZQUEZ referred to AS 36.90.110, in Section 1 of
HB 24, and the existing statute AS 36.90.100, which mentions
landscaping, and asked why landscaping architectural services
are omitted from HB 24.
REPRESENTATIVE KITO responded that he didn't know why except
that state-funded projects for municipalities were typically not
landscaping projects but building and infrastructure projects.
9:30:39 AM
REPRESENTATIVE VAZQUEZ asked Representative Kito to define
landscape architectural services.
REPRESENTATIVE KITO explained that landscape architects are
individuals who work on the grounds around facilities and open
spaces within infrastructure projects. He added that landscape
projects include vegetation and retaining walls.
9:31:36 AM
REPRESENTATIVE VAZQUEZ reiterated that the proposed legislation
omits landscape architectural services and asked if there was a
reason or if that was an oversight.
REPRESENTATIVE KITO said he was not sure if it was omitted but
claimed that there are very few grants from the State of Alaska
awarded specifically for landscaping.
REPRESENTATIVE VAZQUEZ opined that landscaping architectural
services would be an important inclusion.
REPRESENTATIVE KITO agreed and related his experience as a new
engineer trying to find landscaping components for the
embankment of a roadway and to determine which types of
vegetation were best suited based on a variety of variables. He
maintained that landscape architects typically work for other
design professionals within larger projects and would not be the
primary applicant for a project.
REPRESENTATIVE VAZQUEZ asked if it made sense to add landscape
architecture to the proposed legislation.
REPRESENTATIVE KITO agreed to consider doing that.
9:34:14 AM
REPRESENTATIVE VAZQUEZ said that the concept [of HB 24] appears
valid but asked how "sideboards" could be incorporated so that
one doesn't get carried away and not look at the price tag.
REPRESENTATIVE KITO stated the most important consideration is
understanding the budget starting out and trying to contain it.
He maintained that it is important to budget the amount of money
available to complete the design and to pay attention to the
work so that the budget is not exceeded. He added that if the
budget is exceeded, then it is important to know why. He
claimed that project management includes paying attention to the
overall process to keep costs down.
REPRESENTATIVE VAZQUEZ reiterated that she liked the concept of
HB 24 but was uneasy with the lack of sideboards assuring that
the price tag is not disregarded.
9:36:06 AM
REPRESENTATIVE STUTES asked Representative Kito to expound on
the mentoring programs offered by architectural firms.
REPRESENTATIVE KITO responded that he could speak specifically
to his profession. He said a graduate with a civil engineering
degree does not have the ability to "hang out a shingle." He
relayed that in order to become licensed in Alaska as a
professional engineer, a person would need to demonstrate to the
licensing board that he/she has had four years of increasing
levels of responsible charge under a licensed engineer.
9:37:56 AM
REPRESENTATIVE KELLER referred to page 2, line 30, and mentioned
that HB 24 discusses contracting with regional education
attendance areas (REAA) and asked if REAAs offer contracts.
REPRESENTATIVE KITO responded yes, on a regular basis. He
stated that from his experience working with the Department of
Education & Early Development (DEED), the REAAs, or school
districts, will hire an architect or engineer to do specific
school projects. He added that the REAA board would review the
proposals and hire the architect or engineer for the project.
9:38:51 AM
DALE NELSON, Alaska Professional Design Council (APDC),
testified in support of HB 24. He relayed that he is a
registered professional civil engineer and has practiced in
Alaska since 1967. He declared that he represents the Alaska
Professional Design Council, as chair of the Legislative Liaison
Committee, and is testifying in support of HB 24. He said APDC
is a nonprofit organization, started in the 1970s, and includes
a number of member organizations representing many licensed
engineers. He noted APDC has been very involved with
communities, the University of Alaska, and with the Science,
Technology, Engineering and Mathematics (STEM) teaching program
in schools.
MR. NELSON asserted that HB 24 is needed. He said that APDC
works with communities who are responding to pricing-first RFPs
and assists with the selection process. He emphasized that QBS
has real value. He cited the four supporting principles of the
American Public Works Association (APWA) are to: lower overall
cost, promote technical innovation and quality, benefit small
firms, and satisfy project owners. He stated that the main
advantage of QBS is that it promotes a collaborative spirit
between the design professional and the client in maximizing the
quality, value, cost-effectiveness, and usefulness of the final
product. He maintained that the mandate for managers is to be
good stewards of the funding provided to the communities for
development. He stated that as a registered professional
engineer, his oath is to support the health, safety, and welfare
of the public. He asked for the committee's support of HB 24.
9:44:25 AM
CHAIR LYNN asked why, if Mr. Nelson and the APDC have been
promoting the concept behind HB 24 for several years, it has
never passed.
MR. NELSON responded that education is needed and ongoing and,
as in the present hearing in the House State Affairs Standing
Committee, APDC strives to promote understanding of the
requirements of the state procurement code and what QBS would
accomplish.
9:45:28 AM
REPRESENTATIVE KELLER asked if APDC has standard designs that
can be used across the state, citing the reuse of previously
approved designs in the Matanuska-Susitna School District as an
example, and if reusing designs is in the scope and mission of
APDC to cut costs.
9:46:21 AM
MS. NELSON replied no, that APDC's scope does not include that
level of involvement in design recommendations. He stated that
APDC's role is in understanding the process and value of looking
for a qualified designer. He said that for a school district,
the designer would be an architect, as the lead, and would have
the support of structural, civil, mechanical, electrical, and
landscaping architects. He added that once the qualified
architect is identified, he/she collaborates with the school
district to define the scope, and together they work toward the
objective.
9:47:36 AM
REPRESENTATIVE SPOHNHOLZ asked and received clarification on the
four criteria by which the APDC supports the QBS process.
9:48:19 AM
CATHERINE FRITZ, Architect, Alaska Professional Design Council,
testified in support of HB 24. She relayed that she was a
practicing architect in Juneau who began working in the
architectural field in 1983 and has been licensed since 1990.
She reiterated Representative Kito's claim about the time it
takes to become a licensed design professional. She made
reference to her letter in the committee packet. She pointed
out that there is an existing statute on Qualified-Based
Selection, and the proposed legislation is similar to that
statute but would ensure that the provisions already practiced
in the state are carried down to the municipal levels and local
units who use state funds. She contested that implementing HB
24 is an issue of fairness in procurement. She related that the
goal of any government procurement process is to have extensive
competition that is open, fair, rigorous, and appropriate for
the project, and she opined that this should be true at all
levels of government.
MS. FRITZ said that she has recently been working on projects
for the Federal Aviation Administration (FAA) and stated that
the FAA, along with most federal agencies, requires QBS for
selecting design teams. She said that HB 24 would close a
loophole. She maintained that design is not like construction
but is more a service than a commodity. She offered that if a
project is clearly defined, then a price can be appropriately
associated with the project. She claimed that a pricing-first
selection process attracts a bid without a scope, so that a
facility, built using the cheapest bid, will reflect less time
spent with the design team, less opportunity for innovation, and
less consideration for efficiency in ongoing maintenance.
MS. FRITZ asserted that the Quality-Based Selection process
offers an opportunity for collaboration between the owner and
the design team. She said that after identifying the
qualifications that are important for a project and selecting
the best design team for the project, an owner can negotiate a
price with the design team. She maintained that if the owner
and design team cannot decide on a price, then the owner can use
the second choice team. She added that a contract for services
would not be written until the negotiation is complete. She
described QBS as a two-step process, resulting in clear
expectations, collaboration, relationship building, and a design
team that understands the owner's personal goals.
[HB 24 was held over.]
| Document Name | Date/Time | Subjects |
|---|---|---|
| 01 Blank CS HB 368 v.W 2-26-2016.pdf |
HSTA 3/29/2016 8:00:00 AM |
HB 368 |
| 02 HB 368 v.A.PDF |
HSTA 3/29/2016 8:00:00 AM |
HB 368 |
| 03 Sponsor Statement HB 368 ver W 3-1-2016 (002).pdf |
HSTA 3/29/2016 8:00:00 AM |
HB 368 |
| 04 Section Analysis HB 368 ver W 3-1-2016 (002).pdf |
HSTA 3/29/2016 8:00:00 AM |
HB 368 |
| 05 HB 368 ver W Description of Changes 3-25-2016.pdf |
HSTA 3/29/2016 8:00:00 AM |
HB 368 |
| 06 HB 368 Fiscal Note - DOA 3-25-2016.pdf |
HSTA 3/29/2016 8:00:00 AM |
HB 368 |
| 01 HB 24 ver A.pdf |
HSTA 3/29/2016 8:00:00 AM |
HB 24 |
| 02 HB 24 Sponsor Statement.pdf |
HSTA 3/29/2016 8:00:00 AM |
HB 24 |
| 03 HB 24 Sectional Analysis.pdf |
HSTA 3/29/2016 8:00:00 AM |
HB 24 |
| 04 HB 24 Supporting Documents-Leg Research Report.pdf |
HSTA 3/29/2016 8:00:00 AM |
HB 24 |
| 05 HB 24-DOA-DGS-02-05-16.pdf |
HSTA 3/29/2016 8:00:00 AM |
HB 24 |
| 06 HB 24 ACEC qbs_matrix 2013.pdf |
HSTA 3/29/2016 8:00:00 AM |
HB 24 |
| 07 HB 24 Supporting Documents-Presentation ACEC Aug 2011-.pdf |
HSTA 3/29/2016 8:00:00 AM |
HB 24 |