Legislature(2017 - 2018)GRUENBERG 120
02/09/2017 03:00 PM House STATE AFFAIRS
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| Audio | Topic |
|---|---|
| Start | |
| HB91 | |
| HB50 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| *+ | HB 91 | TELECONFERENCED | |
| *+ | HB 50 | TELECONFERENCED | |
| + | TELECONFERENCED |
HB 50-PROF. SERVICES IN STATE-FUNDED CONTRACTS
3:59:49 PM
CHAIR KREISS-TOMKINS announced that the final order of business
would be HOUSE BILL NO. 50, "An Act relating to the procurement
of architectural, engineering, or land surveying services for
state-funded contracts."
4:00:16 PM
REPRESENTATIVE SAM KITO, Alaska State Legislature, presented HB
50, as prime sponsor. He stated that the concept behind HB 50
is championed by the Alaska Professional Design Council (APDC),
a coalition of professional organizations that represent members
of the design community. He mentioned that he is professionally
affiliated with the council through his membership in the Alaska
Section of American Society of Civil Engineers (ASCE). He
relayed that through the proposed legislation, the predominant
factor for selection of design services for a construction
project would be the qualifications of those services rather
than cost. He asserted that the Department of Transportation &
Public Facilities (DOT&PF) already uses this selection process
for projects it funds directly, and HB 50 would extend that
requirement to projects funded by the State of Alaska through
grants to municipal governments.
REPRESENTATIVE KITO attested that the goal of HB 50 would be to
ensure that projects funded by the State of Alaska are the most
efficient and cost effective. He relayed that the activities
performed by architects, engineers, land surveyors, and
landscape architects are not cost-based. He asserted that these
professionals would not be competing based on their ability to
minimize the cost of their services, but on their knowledge and
experience in their area of expertise. He said for most design
projects, design services constitute about six to eight percent
of the cost of a project. He offered that HB 50 would allow the
hire of a design professional who could provide the service most
efficiently and who has the best experience for the work.
REPRESENTATIVE KITO said that when an owner has identified a
short list of candidates, he/she can work directly with the
number one scoring individual or firm to negotiate a fee for
doing the work. If the owner is not able to negotiate an
acceptable fee, then those negotiations can be terminated, and
the owner can negotiate with the number two scoring company or
individual. He said in that way, the State of Alaska can ensure
that the people doing this state-funded work are the most
qualified.
4:05:23 PM
DALE NELSON, Chair, Legislative Liaison Committee, Alaska
Professional Design Council (APDC), testified in support of HB
50 on behalf of the APDC Legislative Liaison Committee. He said
that he also represents the American Society of Civil Engineers
Region 8, which includes nine states and soon will include two
territories and two provinces of Canada. He mentioned that he
also sits on the board of the American Society of Engineers
(ASCE). He directed the committee's attention to the APDC
position statement in the committee packet. He stated that APDC
represents the Alaska Society of Professional Engineers (ASPE),
the Alaska Society of Professional Land Surveyors (ASPLS), the
American Institute of Architects (AIA) Alaska Chapter, the
American Society of Civil Engineers (ASCE) Alaska Section, the
American Society of Landscape Architects (ASLA) Alaska Chapter,
and the American Council of Engineering Companies of Alaska
(ACEC-Alaska).
MR. NELSON relayed that the State of Alaska requires that design
professionals for state-funded projects be selected using
qualifications based criteria, and HB 50 would implement that
requirement at the community level. He explained that
Qualifications Based Selection (QBS) procedures are specified by
the U.S. Brooks Architect-Engineers Act [of 1972] ("the Brooks
Act"), more than 40 mini Brooks Acts, and the American Bar
Association's (ABA's) Model Procurement Code for State and Local
Governments.
4:09:34 PM
MR. NELSON paraphrased from the ASCE policy statement in the
committee packet, which read [original punctuation provided]:
Often a contracting entity "owner" may believe that
the pivotal issue in the selection of a professional
engineer is the cost of the necessary services. Also,
an owner may perceive that accepting the low price to
perform the work produces the project with the lowest
total cost. In this case, the owner is of the belief
that the required engineering services are completely
described and the qualifications of all engineers are
equal.
MR. NELSON went on to say that it is impossible to completely
describe the scope for required professional services. He
continued paraphrasing from the ASCE policy statement, which
read [original punctuation provided]:
A poorly defined scope of services can result in
numerous change orders. Lacking specifics, each firm
may be compelled to, in order to be competitive,
submit a price for the least amount of work reasonably
envisioned.
MR. NELSON concluded by saying, "APDC strongly believes that it
is in the public's interest to utilize QBS for all public
projects while allowing for subsequent fee negotiations." He
contended that HB 50 would do this.
4:12:10 PM
REPRESENTATIVE TUCK asked where QBS is located in HB 50.
REPRESENTATIVE KITO replied that a new statute, AS 36.90.110,
proposed in Section 1 of HB 50, discusses how procurement of
engineering services would be performed and the use of
qualifications as the selection criteria for design services.
REPRESENTATIVE TUCK asked if there was a standard for the
qualifications used for selection criteria.
REPRESENTATIVE KITO explained that a typical project would be
advertised with a request for proposal (RFP). He said that
qualified candidates would then submit proposals for providing
the services designated in the scope. He relayed that the
proposals would be reviewed according to identified criteria in
the [RFP] notice. He added that the criteria typically would
include the individual resumes, the corporate experience, the
team experience, and the workload of the designer. These are
all qualifications of the firm or individual providing the
service. He mentioned that the RFP may also include local
selection as a criteria. He stated that all of these criteria
components are assigned a certain number of points based on
their importance as determined by the project owner. A team of
reviewers then would review and score the proposals according to
the criteria set forth. He reiterated that the highest scoring
proposer would be the first to be offered the opportunity to
negotiate a fee. If that fee negotiation fails, then the next
highest scoring proposer would be engaged to negotiate a fee.
4:15:29 PM
REPRESENTATIVE TUCK expressed his irritation with design people
who "don't know what they are talking about," which he
experienced in his street lighting and traffic control work for
DOT&PF. He offered that it is a huge process to try to resolve
any design flaws "in the field." He stated that he sees the
need to "qualify" the bid with experience and workload, rather
than using the low bid as a qualifier. He opined that HB 50
does not state how selection is made but appears to leave that
up to the judgement of the contracting person. He suggested
that the criteria components, mentioned by Representative Kito,
should be stated in the proposed legislation. He asked, "What
in our procurement codes right now prevents you from doing this
already?"
REPRESENTATIVE KITO responded that the language in HB 50 is
language copied from DOT&PF statutes, and that language is what
provides DOT&PF the [procurement] flexibility. In response to
Representative Tuck's first question, he opined that it would be
difficult for the legislature to anticipate all of the types of
projects that would be advertised. He added that providing
direction on certain criteria could create limitations for the
procurement officer issuing an RFP. He said that DOT&PF is
already required by Alaska's mini-Brooks Act to select designers
based on qualification. He offered that HB 50 would require
municipalities receiving public money through the legislature to
use QBS. He added that many municipalities already have
ordinances with this requirement but offered that since some
don't, HB 50 would "even the playing field" for municipalities
receiving state money.
4:18:48 PM
REPRESENTATIVE TUCK asked if HB 50 could have prevented "what
happened with the Port of Anchorage," if that had been a state-
funded project. He mentioned that the Port of Anchorage was a
design flaw; many consultants were involved; much of the work
was sole sourced; there were many judgement calls; and there
were warnings from engineers. He offered that a project such as
that gives a great deal of responsibility to the contracting
person.
REPRESENTATIVE KITO offered that he believes the [Port of
Anchorage] situation to have been unique. He said he doesn't
know enough about that project to say if HB 50 would have helped
in that situation.
4:20:01 PM
MR. NELSON responded that "sole source" is the key in
Representative Tuck's testimony regarding the Port of Anchorage
project. He said that sole source procurement is not included
in HB 50; instead, HB 50 represents a process to be followed.
He suggested that following the mini-Brooks Act might have
prevented what happened with the Port of Anchorage project.
REPRESENTATIVE TUCK expressed his concern that there be a
process and stated that he doesn't see one in HB 50. He cited
language in Section 1 of HB 50, on page 1, beginning on line 7,
which read as follows:
The contracting person shall, when selecting the
contractor, negotiate with the most qualified and
suitable professional person of demonstrated
competence to perform the services. The contracting
person shall award the contract for those services at
fair and reasonable compensation as determined by the
contracting person.
REPRESENTATIVE TUCK attested that HB 50 doesn't identify the
criteria; it is too subjective; and it is all determined by one
person. He asked if there was any way a design engineer could
appeal if he/she saw a design flaw in another engineering firm's
proposal.
REPRESENTATIVE KITO said that different projects are
administered in different ways. He relayed that very large
projects will often budget for value engineering, in which an
engineer or architect will complete a design and forward it to
another engineering or architecture firm to review. He
mentioned that this probably wouldn't be done for a simple
project, but might be for a major international airport or port
project. He said it would be at the discretion of the
procurement officer. He explained that if HB 50 becomes law,
the procurement officer would not make all of the decisions.
When selecting a designer, the procurement officer would write
the RFP and assemble the selection team with the knowledge,
experience, and responsibility to review the proposals and
select the most qualified offeror.
4:23:33 PM
REPRESENTATIVE JOHNSON asked if HB 50 would preclude awarding a
contract based on low bid.
REPRESENTATIVE KITO explained that there are two components to a
construction project: the actual construction activities, which
are generally awarded based on low bid; and the design work,
which through HB 50 would be awarded based on the qualifications
and experience of the designer.
REPRESENTATIVE JOHNSON commented that she has seen some amazing
design work portfolios, but unfortunately the firms were from
out of state. She offered that the larger cities already follow
QBS practices and asked how HB 50 would benefit smaller cities.
REPRESENTATIVE KITO asserted that QBS would actually help in
regard to smaller cities. He mentioned his experience with the
Department of Education and Early Development (DEED), in which a
district requested proposals to be submitted based on cost of
services. He suggested that time drives the cost of an
engineering project: lower cost engineers may take more time to
complete a project and higher cost engineers less time. The
discrepancy between engineers is based on experience and
knowledge, not cost.
[HB 50 was held over.]