04/23/1996 08:45 AM Senate FIN

                                                                               
  SENATE BILL NO. 275                                                          
                                                                               
       An  Act relating  to  state  procurement practices  and                 
       procedures; and providing for an effective date.                        
                                                                               
  Co-chairman Halford directed  that SB 275 be  brought on for                 
  hearing.  Senator  Donley referenced his amendment  relating                 
  to  employment of  staff  outside of  Alaska.   DAVE WILDER,                 
  Vice-chairman,  Alaska  Seafood  Marketing  Institute,  came                 
  before  committee.   He  explained  that as  a  fisherman in                 
  Bristol  Bay  for  30  years,   he  has  great  interest  in                 
  legislation impacting the industry.                                          
                                                                               
  Mr. Wilder noted that  ASMI saved approximately $200.0 as  a                 
  result of last  year's exemption from the  procurement code.                 
  That allowed for hire of  an additional field representative                 
  in  Southeast.   In  addition to  ASMI  staff in  Juneau and                 
  Seattle,  three  representatives  presently   market  Alaska                 
  seafood  products  domestically.     ASMI  manages  its  own                 
  promotions.                                                                  
                                                                               
  Mr.  Wilder remarked  on industry  distress  and competition                 
  from farmed salmon in both domestic and export markets.  The                 
  declining value of  the product is having  a "very stressful                 
  impact on the  industry."   ASMI must  remain responsive  to                 
  opportunities.  The  institute does  as much contracting  as                 
  possible within the  state.  The  majority of the board  are                 
  Alaska residents, and half  of the members of the  board are                 
  fishermen.   Mr. Wilder  again attested  to savings  derived                 
  from exemption from the procurement code.                                    
                                                                               
  Senator Donley voiced his understanding  that CSSB 275 (STA)                 
  would not return  ASMI to  the procurement code.   It  would                 
  merely place it back under the bidder preference for Alaskan                 
  products.   Mr. Wilder  concurred but  added that  inclusion                 
  would add  costs to  future contracts.   He  cited a  recent                 
  advertising  contract  as  an example  and  said  the bidder                 
  preference would have made no difference.  He again stressed                 
  need to timely and efficiently respond to the market.   ASMI                 
  is becoming less dependent  on the state as it  improves its                 
  processes.  More  regulations do  not improve that  process.                 
  Senator Donley voiced his belief that all should comply with                 
  the bidder preference.                                                       
                                                                               
  Discussion  of   past  practices  relating   to  advertising                 
  contracts followed  between Senator Randy  Phillips and  Co-                 
  chairman Halford.                                                            
                                                                               
  Senator Donley noted  that the  5 percent bidder  preference                 
  applies "if everything else is equal."  Bidders have to meet                 
  the basic contract criteria before they are eligible for the                 
  preference.    If  they   do  not  have  expertise   in  the                 
  marketplace (in the  instance of  a foreign campaign),  they                 
  will not meet  qualifications, and the 5  percent preference                 
                                                                               
                                                                               
  would make no difference.                                                    
                                                                               
  Mr. Wilder cited  an instance  in which an  Alaska firm  was                 
  hired for a project.  The Alaska firm then "went outside and                 
  got all the expertise . . . ."  The state ended up paying an                 
  "extra $100.0, plus, a year to honor the bidder preference."                 
  If that $100.0 could have been  put into marketing, it would                 
  have been  much more responsive  to the legislature  and the                 
  industry.  Senator Donley suggested that  bid specifications                 
  could be crafted to require greater involvement.                             
                                                                               
  Co-chairman Halford noted  need to recess for  attendance at                 
  the  Senate  floor session  and  suggested that  the meeting                 
  reconvene at 4:00 p.m.                                                       
                                                                               
  ADJOURNMENT                                                                  
                                                                               
  The meeting was recessed at approximately 11:00 a.m.