03/05/1994 01:00 PM House ECO

  SB 212 - STATE PROCUREMENTS AND PUBLICATIONS                                 
                                                                               
  CHRIS GATES, DIRECTOR OF DIVISION OF ECONOMIC DEVELOPMENT,                   
  DEPARTMENT OF COMMERCE AND ECONOMIC DEVELOPMENT, discussed                   
  the CS for Senate Bill 212(FIN)am relating to procurement                    
  notices.  He stated this would make Alaskan product                          
  preference a more usable process to encourage maximized use                  
  of Alaskan products in state contracts and state                             
  procurement.  He said that previous bills have made the                      
  penalties too severe for a contractor who used the process                   
  and then did not use the Alaskan product specified.  He said                 
  the process has been much too complicated and almost                         
  impossible to comply with; thus it had not been utilized.                    
  He believed CSSB 212(FIN)am would solve this problem and                     
  increase use of Alaskan products.  He cited numerous                         
  innovations in the bill which would accomplish this and                      
  encourage local hire through incentives and bonuses.  He                     
  said the Department of Economic Development had been working                 
  hard with Senator Kelly's staff on this bill.                                
                                                                               
  TAPE 94-05, SIDE B                                                           
  Number 026                                                                   
                                                                               
  CHAIR MACLEAN said the House Economic Task Force had                         
  followed this bill, supported it fully, and considered it                    
  one of the priority bills.  She had spoken to Speaker                        
  Barnes, who will give it as few referrals as possible.                       
                                                                               
  Number 050                                                                   
                                                                               
  REPRESENTATIVE WILLIAMS asked about the incentive bonus                      
  program, and how long it stayed in effect if a contractor                    
  did not use an Alaskan company.                                              
                                                                               
  MR. GATES said the bonus lasted throughout the contract, and                 
  if a contractor switched to an Alaskan supplier in the                       
  middle of a contract, the bonus would apply.                                 
                                                                               
  Number 075                                                                   
                                                                               
  LOREN RASMUSSEN, CHIEF, DESIGN CONSTRUCTION STANDARDS,                       
  DEPARTMENT OF TRANSPORTATION AND PUBLIC FACILITIES,                          
  testified that this bill would not do away with the                          
  competitive sealed bidding process, but would allow bonuses                  
  for local products and local hire to apply to all contracts,                 
  at the end rather than at the beginning of the contract.                     
  Regulations could specify what a maximum bonus would be, for                 
  example five percent.                                                        
                                                                               
  Number 195                                                                   
                                                                               
  MR. HARDING asked for specific examples as to what                           
  percentages would be given for what preferences.                             
                                                                               
  MR. RASMUSSEN answered at the beginning there could be a                     
  maximum of five percent.  Of that five percent, maybe two                    
  percent would go for local hire, two percent for local                       
  products, and one percent for subcontractors.                                
                                                                               
  Number 256                                                                   
                                                                               
  CHAIR MACLEAN asked if the pilot program was successful,                     
  would it stop after two years?                                               
                                                                               
  MR. RASMUSSEN replied that it would stop after two years,                    
  and legislative authority would have to be given again.                      
                                                                               
  CHAIR MACLEAN stated there are too many different time                       
  frames in the bill.                                                          
                                                                               
  MR. GATES said all of the effective dates could be taken                     
  care of after the first two years success.                                   
                                                                               
  Number 310                                                                   
                                                                               
  MR. HARDING asked about fiscal notes.                                        
                                                                               
  MR. RASMUSSEN said the Department of Transportation's fiscal                 
  note is about $5,000 to do the regulations.  Department of                   
  Administration's fiscal note is more complex and will                        
  contain added costs, mainly for printing.                                    
                                                                               
  Number 360                                                                   
                                                                               
  REPRESENTATIVE JAMES asked how much time would be needed on                  
  the pilot program to determine if it is working.  She added                  
  that historically, the state has not given projects enough                   
  time to determine if they work before abandoning them.                       
                                                                               
  MR. RASMUSSEN agreed that two years was too short, but that                  
  was the way the bill was drafted.                                            
                                                                               
  REPRESENTATIVE CARL MOSES said the Alaska Seafood Marketing                  
  Institute had a potential amendment to the bill.                             
                                                                               
  DUANE PEEPLES, ADMINISTRATIVE OFFICER, ALASKA SEAFOOD                        
  MARKETING INSTITUTE, expressed the Alaska Seafood Marketing                  
  Institute's wish to amend the procurement statutes to make                   
  the Institute exempt from these restrictions, in order to                    
  maximize their marketing activities.                                         
                                                                               
  Number 407                                                                   
                                                                               
  CHAIR MACLEAN suggested this amendment be submitted on the                   
  Senate side and a meeting be scheduled with SENATOR KELLY,                   
  sponsor of the bill, to speed up the process.                                
                                                                               
  MR. PEEPLES replied this would be done next week.                            
                                                                               
  Number 429