02/22/2013 09:00 AM Senate FINANCE

SENATE BILL NO. 12                                                                                                            
                                                                                                                                
     "An   Act  relating   to   state   and  public   entity                                                                    
     procurement,  including  the  State  Procurement  Code,                                                                    
     procurement  preferences, contract  awards, the  use of                                                                    
     small  procurement provisions  for  certain amounts  of                                                                    
     leased space,  the Alaska business  license requirement                                                                    
     for  Alaska bidder  and other  procurement preferences,                                                                    
     the  proof  of  registration of  construction  contract                                                                    
     bidders   and    offerors,   the    establishment   and                                                                    
     maintenance  of lists  of persons  who want  to provide                                                                    
     supplies or services to the  state, state agencies, and                                                                    
     state    instrumentalities,    electronic   bids    and                                                                    
     proposals,   the  chief   procurement  officer,   small                                                                    
     procurements, and writings; relating  to the meaning of                                                                    
     'Alaska bidder'; and providing for an effective date."                                                                     
                                                                                                                                
9:08:36 AM                                                                                                                    
                                                                                                                                
Co-Chair  Meyer  stated  that  the  committee  heard  public                                                                    
testimony for SB 12.                                                                                                            
                                                                                                                                
LAURA  PIERRE,  STAFF,   SENATOR  FAIRCLOUGH,  requested  an                                                                    
explanation of  the procurement process from  the Department                                                                    
of Administration (DOA).                                                                                                        
                                                                                                                                
VERN  JONES,   CHIEF  PROCUREMENT  OFFICER,   DEPARTMENT  OF                                                                    
ADMINISTRATION,   highlighted    relevant   information   by                                                                    
providing a sectional analysis of  the legislation. He began                                                                    
with  section  one,  which  was   a  technical  change  that                                                                    
renumbered and  moved a preference.  Section 2  affected the                                                                    
local  agricultural preference  making the  language of  the                                                                    
preference  consistent.  He  skipped  to  section  5,  which                                                                    
changed the  salary range for the  Chief Procurement Officer                                                                    
reflecting a change  in the Division of  General Services as                                                                    
well  as the  duties  performed. Sections  6  - 10  included                                                                    
additional  technical   changes  on   preferences  including                                                                    
relocation  to  a common  section.  Section  11 amended  the                                                                    
small   procurement  section.   The  change   increased  the                                                                    
threshold limit for small procurements  of leased space from                                                                    
3,000  square feet  to 7,000  square  feet, consistent  with                                                                    
section 18.                                                                                                                     
                                                                                                                                
Mr.  Jones  continued  with  section  12  of  the  sectional                                                                    
analysis.  The   section  clarified  when   Alaska  business                                                                    
licenses were  required for formal  bids and  proposals. The                                                                    
change  required bidders  to provide  proof of  their Alaska                                                                    
business license  prior to award,  but required  the license                                                                    
at the  time of bid submission  in order to qualify  for the                                                                    
Alaska  bidder preference.  Section  13  omitted the  vendor                                                                    
lists, which  was an antiquated process.  The department was                                                                    
implementing  an automated  procurement process.  He skipped                                                                    
to  section  15,  which  clarified  construction  contractor                                                                    
registration   requirements,    now   explicitly   requiring                                                                    
registration before awarding a contract.                                                                                        
                                                                                                                                
Mr.  Jones continued  with section  16, which  clarified the                                                                    
Alaska business license  requirements for competitive sealed                                                                    
proposals   and   qualification   for  the   Alaska   bidder                                                                    
preference  using  language  consistent with  that  used  in                                                                    
section  13. He  skipped  to section  18,  which included  a                                                                    
substantive change amending  the small procurement threshold                                                                    
to  $100 thousand  for goods  and professional  services, to                                                                    
$200 thousand  for construction, and 7  thousand square feet                                                                    
for lease of space.                                                                                                             
                                                                                                                                
9:14:52 AM                                                                                                                    
                                                                                                                                
Mr.   Jones  continued   with   section   19.  The   section                                                                    
consolidated the Alaska  bidder preference, Alaska veterans'                                                                    
preference,   and   other   preferences   formerly   in   AS                                                                    
36.30.170(b).  The section  also  clarified the  requirement                                                                    
for a  disability preference  and eliminated  the "employers                                                                    
of people  with disabilities  preference" and  excluded real                                                                    
estate leases  from application of  procurement preferences.                                                                    
Section 21 clarified which  preferences were cumulative, and                                                                    
which may  not be  combined. He  continued with  section 23,                                                                    
which moved the definition of  "Alaska bidder" and added new                                                                    
definitions  for  "in  writing"  and  "written"  to  include                                                                    
information in electronic form.                                                                                                 
                                                                                                                                
9:18:05 AM                                                                                                                    
                                                                                                                                
Co-Chair Meyer  appreciated the  changes in  the procurement                                                                    
code.  He asked  about section  5. He  noticed that  changes                                                                    
were being  proposed for the testifier's  position. He asked                                                                    
if Mr. Jones supported of the proposed changes.                                                                                 
                                                                                                                                
Mr.  Jones  responded  that the  Chief  Procurement  Officer                                                                    
would  no  longer  serve  as Director  of  the  Division  of                                                                    
General Services.  He was the  Chief Procurement  Officer in                                                                    
2002  and he  assumed the  overall responsibilities  for the                                                                    
division.  The change  coincided with  plans to  establish a                                                                    
director  position  for  the Division  of  General  Services                                                                    
allowing  the  procurement  officer to  focus  on  statewide                                                                    
procurement.                                                                                                                    
                                                                                                                                
9:20:03 AM                                                                                                                    
                                                                                                                                
Senator   Olson  understood   that  the   vendor  list   was                                                                    
antiquated.  He  asked  about  entities  without  access  to                                                                    
computers  or enough  broadband  to interface  with the  new                                                                    
electronic  process. He  wondered  how a  contractor in  the                                                                    
bush could bid on a  project without access to the internet.                                                                    
He  wished  to level  the  playing  field for  veterans  and                                                                    
disabled Alaskans.                                                                                                              
                                                                                                                                
9:21:41 AM                                                                                                                    
                                                                                                                                
Mr. Jones replied that a  transition period was imminent. He                                                                    
pointed  out that  the state  was implementing  an automated                                                                    
procurement  system  as  part  of  the  Integrated  Resource                                                                    
Information   System  (IRIS).   The   system  will   include                                                                    
resources  for vendors  providing  them  with the  necessary                                                                    
information.  Internet  access  was  necessary.  The  vendor                                                                    
lists were not required, so  the online public notice system                                                                    
contained  all posts  from the  division.  The law  required                                                                    
that the  division maintain the  vendor lists, but  they had                                                                    
fallen out  of use. The  section also removed  a requirement                                                                    
that was no longer used.                                                                                                        
                                                                                                                                
9:23:32 AM                                                                                                                    
                                                                                                                                
Senator Hoffman thanked the sponsor  for the legislation. He                                                                    
himself owned  several corporations and was  chairman of the                                                                    
Bethel  Native  Corporation.  He asked  if  the  legislation                                                                    
helped to streamline the cumbersome application process.                                                                        
                                                                                                                                
Mr. Jones responded that the  changes allowed for automation                                                                    
of the  formal bids and procurement,  which would streamline                                                                    
the  process. He  added that  implementation  of IRIS  would                                                                    
allow businesses  to submit bids by  populating forms online                                                                    
rather than creating Request for  Proposals (RFP). He stated                                                                    
that raising  the small  procurement thresholds  would alter                                                                    
business by removing barriers of complexity.                                                                                    
                                                                                                                                
Senator Hoffman  agreed that the legislation  would simplify                                                                    
the process for Alaska small businesses.                                                                                        
                                                                                                                                
9:25:45 AM                                                                                                                    
                                                                                                                                
Senator Bishop echoed the statements  of Senator Hoffman. He                                                                    
pointed  out  section  19, which  eliminated  redundancy  in                                                                    
disability determinations  for veterans. He  appreciated the                                                                    
legislation's efficiency.                                                                                                       
                                                                                                                                
Co-Chair Kelly MOVED  to REPORT SB 12 out  of committee with                                                                    
individual  recommendations  and   the  accompanying  fiscal                                                                    
note. There being NO OBJECTION, it was so ordered.                                                                              
                                                                                                                                
SB  12  was REPORTED  out  of  committee  with a  "do  pass"                                                                    
recommendation  and  with   one  previously  published  zero                                                                    
fiscal note: FN1 (ADM).