Legislature(1993 - 1994)
03/27/1993 08:00 AM House STA
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HB 228: STATE PROCUREMENTS Number 155 CHAIRMAN VEZEY read the title to HB 228 and invited testimony on it. Number 161 PEGGY THOMAS, A UNIVERSITY OF ALASKA EMPLOYEE AND PRIVATE CONSULTANT testified by teleconference from Anchorage in support of HB 228. She stated trying to improve Alaska's economy by tightening procurement procedures is a good idea, but HB 228 needs more work. She stated the findings in Section one may not be accurate and urged a longer look at them. She also noted problems with the procurement sections, saying that without a solid manufacturing base in Alaska, even if the state buys from an inside company, the buy is most likely going to an outsider eventually. MS. THOMAS stated HB 228 may actually favor outside companies because they know of the preference given Alaska companies and can effectively raise their prices above what another state may pay. She stated the real answer to making more effective procurement is to increase the competence of our procurement officers. Number 370 DAVE CHOQUETTE, A FORMER MEMBER OF THE HOUSE, testified by teleconference from Anchorage in favor of HB 228, even though he tried for two years to keep procurement out of a similar bill he had introduced. He stated administrative charges required to be reported under HB 228 could be regulated without statute, by forging a partnership between the public and private sector. He stated the original goal was to increase the public awareness of the need to buy Alaskan, and urged members not to allow the procurement sections of the bill to remain. Number 424 REPRESENTATIVE ULMER asked if Mr. Choquette had seen HB 228, and if so, did he have any suggestions for changes. Number 430 MR. CHOQUETTE replied he had seen HB 228, and stated there were several areas of improvement needed. He specifically noted the University of Alaska as a big offender in out-of- state procurements, as well as the Permanent Fund Board. He stated the Permanent Fund Booklet was designed so that only an out-of-state printer could work on the project. Number 465 CHAIRMAN VEZEY asked if Mr. Choquette could cite specific sections that needed changes. Number 471 MR. CHOQUETTE had no specific section in mind, but suggested members look into a bonus program that had been discussed in the House previously. Number 488 DAVE HARDING, LEGISLATIVE AIDE TO REPRESENTATIVE EILEEN MACLEAN, testified in favor of HB 228. He stated HB 228 mirrors the previous procurement bill introduced and passed by the House, and through all committees in the Senate during the 17th Alaska State Legislature. He stated HB 228 focused primarily on service providers and echoed Mr. Choquette's recommendation that members look at a bonus plan. Number 517 DUGAN PETTY, DIRECTOR OF GENERAL SERVICES, testified the administration was in favor of supporting Alaska vendors and building administrative procedures to help them. He stated some streamlining of the procurement procedures is needed under HB 228's guidelines. He cited a section of HB 228 that requires procurement officers to build in administrative costs of a project in the bid. He stated that was impractical in some smaller projects that might only involve a couple of long distance phone calls, and stated a threshold to require such a build-in should be written into HB 228. He stated such costs could be built into the invitations to bid that go to service providers, and then figured into the preference points for local vendors. Number 550 CHAIRMAN VEZEY asked if the procurement procedures included a preference code for instate vendors. MR. PETTY replied in the affirmative, and added they could account for up to ten percent of costs in an invitation to bid, which is how an Alaska vendor could benefit from administrative costs being factored in an invitation to bid. Number 567 CHAIRMAN VEZEY asked if the intent was to factor in the possibility of lawsuits in the administrative costs. Number 584 MR. PETTY stated it was not, that the administration did not anticipate legal costs on any project. He stated the costs he would like to see under a threshold system for procurements would be small, one-time costs like a limited number of long distance phone calls or site visits. REPRESENTATIVE OLBERG asked for a couple of examples of small administrative costs. Number 601 MR. PETTY stated looking at an out-of-state print job or at fire/rescue vehicles before taking delivery. CHAIRMAN VEZEY interpreted that to mean anytime the state bought products that either are expensive or expensive to ship. Number 615 REPRESENTATIVE JERRY SANDERS knew of no printing job that required anyone to examine a job on the print shop floor. He noted a site visit would have little effect on keeping out-of-state printers from doing state business, since printers here must charge about 35% more, and on a ten thousand dollar print job, any out-of-state vendor could easily build in the cost of a plane ticket to check the job. Number 628 REPRESENTATIVE OLBERG saw no reason for a floor visit anyway. Number 633 REPRESENTATIVE SANDERS stated it was a good excuse for a Lower 48 vacation. MR. PETTY only knew of one time that a print job needed to be reviewed out-of-state, and that was a rush job. He stated most print jobs are looked at and administered by phone. He went on to detail how section seven of HB 228 needed to be amended to become a more permissive part of the law. He stated if the law was inflexible, it would fragment state procurement policies. He also stated section eight should be amended to include sealed bid jobs as well, which it did not appear to do as written. Number 682 CHAIRMAN VEZEY understood HB 228 did not include school districts, and asked why school districts are not allowed to give local preferences. Number 688 MR. PETTY noted it was true school districts could not include a local preference, and suggested they be mandated as well. Number 694 REPRESENTATIVE OLBERG asked if they were prohibited. Number 697 MR. PETTY said they were, unless a school project used general fund money. Number 699 CHAIRMAN VEZEY stated it might be a good idea to allow school districts to do so, with some exceptions, like limited and sole source bids. TAPE 93-35, SIDE A Number 000 MR. PETTY agreed, stating the school procurement policy should be more permissive. Number 028 CHAIRMAN VEZEY thought it might be best to defer action on HB 228, given the complexity of the bill. He stated it would be a mistake to move on the bill despite its history in the previous legislature. Number 056 REPRESENTATIVE BETTYE DAVIS asked when HB 228 would be heard again. Number 070 CHAIRMAN VEZEY said the committee might hear HB 228 on Tuesday, March 30, and definitely by Saturday, April 3, 1993. Number 077 CHAIRMAN VEZEY then returned to the confirmation of Colonel Sigurd E. Murphy and announced problems with the teleconference call from General Mitch Aboud would prevent him from testifying. He then stated he would entertain a motion on Col. Murphy's nomination. Number 085 REPRESENTATIVE B. DAVIS MOVED the nomination of Col. Murphy. Number 093 The nomination of Colonel Murphy WAS RECOMMENDED for confirmation by a 6-0 vote.
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