Legislature(2009 - 2010)BELTZ 105 (TSBldg)
04/08/2010 09:00 AM Senate STATE AFFAIRS
| Audio | Topic |
|---|---|
| Start | |
| HB225 | |
| HB24 | |
| HB251 | |
| HB225 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | HB 225 | TELECONFERENCED | |
| + | HB 251 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| = | HB 24 | ||
HB 225-STATE PROCUREMENT CODE
9:06:59 AM
CHAIR MENARD announced the first order of business to come
before the committee would be HB 225. [CSHB 225(FIN)(CORRECTED)
was before the committee. It was heard previously.]
SENATOR MEYER moved to adopt the work draft committee substitute
(CS) for HB 225, labeled 26-LS0791\C, as the working document.
Senator French objected for the purposes of discussion.
CRYSTAL KINEMAN, staff to Representative Anna Fairclough, noted
that Version P [CSHB 225(FIN)(Corrected)] exempted Alaska
Industrial Development and Export Authority (AIDEA) and Alaska
Energy Authority (AEA) from the procurement code. The new
committee substitute, Version C, [CSHB 225(STA)] eliminates that
wording leaving AIDEA and AEA under the procurement code.
Technical changes were made to Section 36 of Version P [amending
AS 36.30.999(l)] which referred to AIDEA and AEA as agencies.
Section 19 of Version P was taken out of Version C for purposes
of clarity; the offerors preference is left in regulation.
9:10:53 AM
SENATOR FRENCH said the committee wrestled with two provisions
at the last hearing: whether to put AEA and AIDEA under the
procurement code and whether to eliminate the Alaska offerors
preference. He asked if [Version C] does that or not.
MS. KINEMAN said Version C takes AEA and AIDEA out of the
equation and leaves the offerors preference as it exists in
regulation.
SENATOR FRENCH clarified that Version C leaves the offerors
preference as it is right now, untouched.
MS. KINEMAN responded that was correct.
SENATOR PASKVAN said he sensed a major problem in the system and
would like to hear from Mr. Jones. He asked about the sponsor's
position on Version C, Version P or the original legislation of
a $5,000 veterans preference.
9:12:51 AM
MS. KINEMAN replied that the Alaska Veterans Preference is still
important to Representative Fairclough. Questions about Version
C remain, but the sponsor will adapt to the will of the
committee.
SENATOR PASKVAN questioned how objective criteria are determined
if they do not come from statutory authority. Perhaps a
preference should not be maintained if it can skew a bid result,
has no basis in statute and may not have an objective standard.
MS. KINEMAN replied that the sponsor holds the same concern and
the chair may decide whether that is addressed today or not.
9:15:57 AM
CHAIR MENARD said the legislation is very confusing and she
wants to give it due diligence. She opened public testimony.
SCOTT THORSON, Network Business Systems, said that he would like
to see the Alaska bidder's preference clarified in statute. The
state should support locally owned businesses because the vast
majority of Alaskans work for Alaskan small businesses.
9:18:37 AM
DENNIS MEINERS, Intelligent Energy System, Anchorage, supports
the committee's decision to take Section 6 [amending AS
36.30.015(f)] out of HB 225, Version P. Legislative Audit 08-
30048-08 found that procurement policies and procedures for the
AEA Rural Energy Group Projects need to be rewritten.
Procurements for the Rural Power Systems Upgrade (RPSU) projects
were not consistently made in compliance with the rural energy
group, bulk fuel upgrade program, rural power system upgrade
program project reference manual guidelines or the underlying
federal regulations. Section 6 of Version P strengthens the
agencies' ability to create their own procurement provisions in
spite of past problems. They are a small section, maybe 3 or 4
people, who have managed about $300 million worth of projects
over the last eight years. Very few of those have been bid out.
9:21:05 AM
AEA has accumulated traditions or ways of doing things over the
years, surrounding the way bids are put together. Procurement
procedures may exist but projects are directed to particular
contractors; innovation and competition is restricted. He gave
an example of a 2007 multiple-year software contract going to
the son of one of the workers at the agency. It was not
advertised; his company and others did not have the opportunity
to bid. The complexity and lack of public information about the
procurement practices at AEA eliminate some contractors from
even understanding the bids. The lack of oversight is harmful.
CHAIR MENARD asked Mr. Meiners to wrap up.
MR. MEINERS summarized that it is not appropriate to strengthen
the procurement abilities of the agency without a management
review.
9:24:10 AM
TOM WICKWIRE, attorney, Power Corps Alaska, Fairbanks, said
Power Corps Alaska is a plaintiff in pending litigation against
AIDEA and one of its employees. HB 225 would amend AS
36.30.015(f), effectively allowing AEA to draft its own
regulations and adding AIDEA to the list of agencies that are
excluded from the state procurement code. In pending litigation,
Power Corps, has proven that AIDEA, acting through one of its
employees, has succeeding in giving over $1 million worth of
contracts to an out of state corporation.
CHAIR MENARD interjected and said a committee substitute
[Version C] is currently before the committee.
MR. WICKWIRE asked if Version C allows AEA to draft its own
procurement regulations.
CHAIR MENARD replied no.
MR. WICKWIRE asked if Version C excludes AEA from the state
procurement code.
CHAIR MENARD replied no.
MR. WICKWIRE asked if AEA will be subject to the state
procurement code.
CHAIR MENARD replied yes.
MR. WICKWIRE said if AEA is excluded from the procurement code,
this change will occur while litigation is pending against AEA.
Trans Power has alleged, and submitted proof to the AG, that a
certain AEA employee has intentionally violated the procurement
code. It looks like the AEA has drafted this provision of HB 225
to get itself out of a difficult box. It is inappropriate for an
agency to try to amend a law while litigation is pending.
9:28:00 AM
CHAIR MENARD closed public testimony.
SENATOR PASKVAN said he is uncomfortable rewriting legislation
without more information and would like Mr. Jones to weigh in.
SENATOR MEYER said the legislation is attempting to fix certain
areas of the procurement code. Version C deletes Section 20 and
Section 6, which puts AIDEA and AEA back under procurement code
and leaves the offerors preference the way it was. Some
testimony supports this, however, the procurement officer
remains frustrated with the number of accumulative preferences.
He suggested getting rid of the offerors preference and
increasing the Alaska bidders preference. He also believes the
criteria, six months, for Alaska business residency, is not
enough.
9:30:20 AM
CHAIR MENARD asked if Mr. Meyer would suggest a year.
SENATOR MEYER said a year requirement should be considered as
that is consistent with other Alaska residence requirements. He
has also heard concern about Sections 33 and 34 which allow the
procurement officer to go outside the procurement code and join
up with a cooperative made up of several western states in
attempt to get a better rate for the state. AEA and AIDEA also
want to be outside the procurement code. He reiterated that the
state needs to be able to keep better track of money spent with
an automated and centralized system. His inclination is to leave
the procurement code as it is and take more time to find a
comprehensive solution.
CHAIR MENARD said that is why she would like to hold Version C
and go back to HB 24 which deals with the veterans' preference.
The procurement code needs more work and discussion.
SENATOR KOOKESH said he has no problem with Chair Menard's plan
as long as we have some control over AEA and AIDEA. He said he
is not willing to let them have state money and not be subject
to the procurement code.
CHAIR MENARD said she appreciated his argument that it is all
state money. [HB 225 was held in committee.]
HB 225-STATE PROCUREMENT CODE
10:09:42 AM
SENATOR KOOKESH asked Chair Menard not to adjourn before stating
for the record what she would like to do with HB 225.
CHAIR MENARD replied that HB 225 is being held in committee.
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