Legislature(2013 - 2014)CAPITOL 106

02/20/2014 08:00 AM House STATE AFFAIRS


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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
*+ HB 262 PROCUREMENT EXEMPTION: PDA, OPA TELECONFERENCED
Moved Out of Committee
*+ HB 217 DR. WALTER SOBOLEFF DAY TELECONFERENCED
Moved Out of Committee
+ Bills Previously Heard/Scheduled TELECONFERENCED
                                                                                                                                
             HB 262-PROCUREMENT EXEMPTION: PDA, OPA                                                                         
                                                                                                                                
8:06:59 AM                                                                                                                    
                                                                                                                                
CHAIR LYNN announced  the first order of business  was HOUSE BILL                                                               
NO. 262,  "An Act  exempting the Public  Defender Agency  and the                                                               
office of  public advocacy from  certain provisions of  the State                                                               
Procurement Code; and providing for an effective date."                                                                         
                                                                                                                                
8:07:10 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  LINDSEY  HOLMES,  Alaska  State  Legislature,  as                                                               
prime  sponsor,  presented  HB  262.    She  explained  that  the                                                               
proposed legislation  would clarify  how the  state's procurement                                                               
code  applies to  the Office  of  Public Advocacy  (OPA) and  the                                                               
Public  Defender Agency  (PDA).   She  said those  are the  state                                                               
agencies  that act  as  defense  attorneys representing  indigent                                                               
clients in  criminal cases.  They  are paid by the  state through                                                               
the Department of  Administration.  She said in  most cases, "the                                                               
other side"  is the Department of  Law (DOL).  She  said there is                                                               
question  as   to  when  those   agencies  are  subject   to  the                                                               
procurement code and  when they are not.  Under  Section 1, of HB
262, neither  OPA nor  PDA would have  to obtain  permission from                                                               
the attorney general  to hire expert witnesses  or counsel, which                                                               
would put both agencies on a level playing field with DOL.                                                                      
                                                                                                                                
8:09:56 AM                                                                                                                    
                                                                                                                                
MIKE BARNHILL, Deputy  Commissioner, Department of Administration                                                               
(DOA),  said  prior   to  his  current  three   years  as  deputy                                                               
commissioner, he was an assistant  attorney general (AG) with the                                                               
Department  of  Law.     While  there,  he  said,   he  used  the                                                               
procurement  code frequently  to retain  the services  of outside                                                               
counsel.  He  stated that in the field of  law, one attorney does                                                               
not  equal another  attorney.   He  explained that  the field  is                                                               
highly  specialized;  one  cannot   get  a  defense  attorney  as                                                               
representation  on  a  tax  case, for  example.    Therefore,  he                                                               
emphasized the  importance of tailoring the  procurement to apply                                                               
in highly specialized situations.                                                                                               
                                                                                                                                
MR.  BARNHILL  said  Section  2,   of  HB  262,  is  the  limited                                                               
competition  provision.     He  said  normally,   for  all  state                                                               
agencies, permission must be obtained  from the chief procurement                                                               
officer  in   the  Division  of  General   Services,  within  the                                                               
Department of Law.   For legal service, one must go  to the AG to                                                               
get permission to  use the limited competition statute.   He said                                                               
that is  very effective  for retaining  specialized counsel.   He                                                               
said under  HB 262, OPA  and PDA could  go to  the AG to  get the                                                               
permission  for   "limited  competition  procurement."     Deputy                                                               
Commissioner  Barnhill  said  he  used  the  limited  competition                                                               
procurement many  times.  He said  it was very effective;  he got                                                               
great counsel to represent the state.  He continued as follows:                                                                 
                                                                                                                                
     The most  significant one was  the counsel  we retained                                                                    
     in   the   lawsuit   against   Mercer   for   actuarial                                                                    
     negligence.  And  I can tell you with a  high degree of                                                                    
     certainty that  the outcome of  that case  was entirely                                                                    
     dependent on the  counsel we selected.   The ability to                                                                    
     get  the right  counsel to  fit  the case  you have  is                                                                    
     entirely  consistent  with  our rules  of  professional                                                                    
     responsibility.   If we just had  a generic procurement                                                                    
     code that required  us to go the  lowest bidder without                                                                    
     consideration of specialization,  we would routinely be                                                                    
     hiring the wrong counsel for the wrong case.                                                                               
                                                                                                                                
8:12:26 AM                                                                                                                    
                                                                                                                                
MR.  BARNHILL said  under HB  262, OPA  and PDA  would be  in the                                                               
exact  position as  DOL  with respect  to  retention of  counsel,                                                               
professional services under the  limited competition statute, and                                                               
the retention of  expert witnesses.  He explained  that under the                                                               
existing procurement code, DOL is  exempt when it comes to hiring                                                               
expert witnesses.   He emphasized  that "if  the field of  law is                                                               
specialized,  the field  of professional  witnesses is  extremely                                                               
specialized."   For example, he  said some witnesses  are experts                                                               
on  tire treads,  while others  are blood  splatter experts.   He                                                               
said he  believes that  is why  DOL has had  that exemption.   He                                                               
suggested  that when  AS 36.30  was enacted,  it was  probably an                                                               
oversight  that the  criminal defense  side of  the equation  was                                                               
overlooked.    The proposed  legislation  would  restore that  by                                                               
exempting  both  OPA and  PDA  so  that  those agencies  can  get                                                               
whatever  expert  they need  without  having  to go  through  the                                                               
procurement  code.   He noted  that the  bill has  a zero  fiscal                                                               
note.                                                                                                                           
                                                                                                                                
8:14:02 AM                                                                                                                    
                                                                                                                                
MR. BARNHILL,  in response to  Chair Lynn,  said in order  to get                                                               
representation by  either OPA or  PDA at the public's  expense, a                                                               
person  would have  to  be  indigent.   If  that indigent  person                                                               
needed an  expert witness in  order to  determine the facts  in a                                                               
case, he would then be provided with one.                                                                                       
                                                                                                                                
8:15:22 AM                                                                                                                    
                                                                                                                                
MR.  BARNHILL,  in response  to  a  question from  Representative                                                               
Keller,  offered  his  understanding  that  the  point  at  which                                                               
someone would be considered indigent is decided by the courts.                                                                  
                                                                                                                                
REPRESENTATIVE  KELLER said  it  is not  clear  how changing  the                                                               
authority for the  contracting addresses some of  the concerns of                                                               
the audit and how it relates to the fiscal note.                                                                                
                                                                                                                                
8:16:53 AM                                                                                                                    
                                                                                                                                
MR.  BARNHILL said  the audit  found that  OPA was  not complying                                                               
with the procurement  code.  Further, the audit  found that there                                                               
was failure  in contract oversight.   He  said the latter  is not                                                               
addressed in HB  262, and DOA filed a response  with the Division                                                               
of  Legislative Audit  and  could provide  that  response to  the                                                               
committee.   He said  DOA's oversight is  broad; it  includes the                                                               
Division  of  Motor  Vehicles  (DMV),  OPA,  PDA,  and  the  core                                                               
administrative  entities.   Within  this, he  said,  DOA has  the                                                               
Division  of  Administrative  Services, which  provides  services                                                               
including contract  oversight to a  number of its divisions.   In                                                               
this  particular   context,  DOA's  Division   of  Administrative                                                               
Services  was not  providing contract  management oversight,  and                                                               
the recommendation of  the Division of Legislative  Audit is that                                                               
it  do  so.   He  related  that DOA  has  begun  to provide  more                                                               
oversight, but  it is a large  task to do so  for every division.                                                               
He  stated  that DOA  believes  it  is important  to  effectively                                                               
monitor  and manage  contracts "across  the departments,"  but it                                                               
will   have   to  observe   the   oversight   to  determine   its                                                               
effectiveness.                                                                                                                  
                                                                                                                                
8:19:04 AM                                                                                                                    
                                                                                                                                
MR.  BARNHILL, with  respect to  procurement,  stated his  belief                                                               
that OPA  and PDA did not  interpret the procurement code  in the                                                               
same  way  that  the  Division  of Legislative  Audit  did.    He                                                               
explained that [OPA and PDA] took  the position that the AG could                                                               
not control  how they  procured legal counsel  or how  they would                                                               
procure  expert witnesses.   He  said, "I  mean, as  a matter  of                                                               
professional responsibility, as the  sponsor indicated, if you're                                                               
adverse  to a  party,  you  would never  dream  of  going to  the                                                               
adverse side to ask for  permission to retain counsel."  Further,                                                               
he stated  that retaining an expert  witness who is not  the best                                                               
for a  particular case  could have  implications with  respect to                                                               
"your  duty of  zealous advocacy."   He  said, "I  think it  just                                                               
simply didn't  occur to them  that the procurement  code wouldn't                                                               
apply  in this  way."   He concluded,  "So, what  we're doing  is                                                               
we're changing the  law so we have a common  understanding of how                                                               
the  procurement code  applies with  respect to  outside counsel,                                                               
with  respect  to  conflict  counsel,   with  respect  to  expert                                                               
witnesses."                                                                                                                     
                                                                                                                                
8:20:31 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE KELLER  said it makes  sense, because  DOA handles                                                               
the defense and  the prosecutors are in DOL; [the  state] must do                                                               
everything it can to avoid a  conflict of interest.  He indicated                                                               
that legislators realize  that "we end up paying  for the defense                                                               
and the  prosecution," as well as  the judge and court  room.  He                                                               
emphasized  the   importance  of   not  making   changes  without                                                               
following to proper process.                                                                                                    
                                                                                                                                
MR.  BARNHILL noted  that Rick  Allen, the  director of  OPA, had                                                               
instituted an initiative to help  control costs better within the                                                               
office,  particularly  when  it  comes to  retention  of  outside                                                               
counsel; he  has had regulations  drafted that provide  case caps                                                               
by type  of case,  with legitimate  escape clauses.   He  said he                                                               
thinks it is an excellent approach.                                                                                             
                                                                                                                                
8:22:31 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE HUGHES asked  if Mr. Allen might  have anything to                                                               
add to the subject of cost control.                                                                                             
                                                                                                                                
8:23:18 AM                                                                                                                    
                                                                                                                                
RICK  ALLEN,   Director,  Anchorage  Office,  Office   of  Public                                                               
Advocacy   (OPA),  stated   that   the   implementation  of   the                                                               
aforementioned  regulations has  been a  "game changer"  for OPA.                                                               
He said  when he became  director of OPA  he found there  were no                                                               
controls  in place  on how  much contractors  were being  paid on                                                               
cases, which  posed a series of  problems, one of the  major ones                                                               
being that  without parameters on  contractors, it  is impossible                                                               
for  anyone serving  as  director of  OPA  to maintain  budgetary                                                               
predictability.  He said the caps  have been in place for about a                                                               
year  now, which  has  been  a big  change  for the  contractors;                                                               
however,  he  said  he  thinks  everyone  has  "settled  in"  and                                                               
realizes "this  is the way we're  going to do business  now," and                                                               
it has made a big difference  for OPA's bottom line.  In response                                                               
to a  follow-up question from  Representative Hughes, he  said he                                                               
thinks the quality  of the expert witnesses and  legal counsel is                                                               
adequate  with the  caps  in  place.   He  echoed Mr.  Barnhill's                                                               
notation that there is always a  release valve on the caps, which                                                               
makes  it possible  to adjust  the  money spent  on a  case.   He                                                               
offered an explanation of the adjustment process.                                                                               
                                                                                                                                
8:25:38 AM                                                                                                                    
                                                                                                                                
MR. ALLEN,  in response to Chair  Lynn, said when the  state pays                                                               
for a person's services, then that  person does not get to choose                                                               
who his/her expert  witness or lawyer is, although  OPA will take                                                               
the  input  of its  clients  into  consideration.   Most  of  the                                                               
decisions about  how the criminal  case proceeds are made  by the                                                               
attorney.                                                                                                                       
                                                                                                                                
CHAIR LYNN surmised  that a poor person "is not  going to get the                                                               
dream team."                                                                                                                    
                                                                                                                                
MR. ALLEN responded  that he has practiced in other  parts of the                                                               
United  States  before  coming  back   home  to  Alaska,  and  he                                                               
emphasized he  is "very,  very comfortable  with the  standard we                                                               
are able to provide."  He  expressed pride in the work that OPA's                                                               
staff and contractors do.  He  ventured that Mr. Steiner from the                                                               
Public Defender Agency  would say the same.  He  stated that some                                                               
of the  finest criminal defense  attorneys and  appellate writers                                                               
work  for OPA  or  PDA;  therefore, an  indigent  person will  be                                                               
assigned a quality attorney and  the resources needed to properly                                                               
defend the case.                                                                                                                
                                                                                                                                
8:28:13 AM                                                                                                                    
                                                                                                                                
QUINLAN  STEINER,  Director,   Central  Office,  Public  Defender                                                               
Agency  (PDA),  opined  that  Deputy  Commissioner  Barnhill  had                                                               
articulated the concerns address through the proposed HB 262.                                                                   
                                                                                                                                
8:28:51 AM                                                                                                                    
                                                                                                                                
CHAIR LYNN,  after ascertaining  that there was  no one  else who                                                               
wished to testify, closed public testimony on HB 262.                                                                           
                                                                                                                                
8:29:04 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE GATTIS said  HB 262 seems like a  simple bill that                                                               
would clean-up "what  we already do."  She said  experts in their                                                               
field representing  those who cannot afford  representation seems                                                               
to make  sense, and "it directs  it."  She stated  her support of                                                               
HB 262.                                                                                                                         
                                                                                                                                
8:29:35 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE KELLER  pointed out  that the House  State Affairs                                                               
Standing Committee is the only  committee of referral for HB 262,                                                               
which he  opined is appropriate,  because this is an  issue about                                                               
contract management and administration.                                                                                         
                                                                                                                                
8:30:17 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE KELLER  moved to  report HB  262 out  of committee                                                               
with  individual recommendations  and  the  attached zero  fiscal                                                               
note.  There  being no objection, HB 262 was  reported out of the                                                               
House State Affairs Standing Committee.                                                                                         

Document Name Date/Time Subjects
01 HB 262 v.A.pdf HSTA 2/20/2014 8:00:00 AM
HB 262
02 HB 262 Sponsor Statement.pdf HSTA 2/20/2014 8:00:00 AM
HB 262
03 HB 262 Sectional Analysis.pdf HSTA 2/20/2014 8:00:00 AM
HB 262
04HB 262 OPA Audit.pdf HSTA 2/20/2014 8:00:00 AM
HB 262
05 HB262 Fiscal Note DOA.pdf HSTA 2/20/2014 8:00:00 AM
HB 262
01 HB0217A.pdf HSTA 2/20/2014 8:00:00 AM
HB 217
02 HB 217 Sponsor Statement.pdf HSTA 2/20/2014 8:00:00 AM
HB 217
03 HB 217 Sectional Summary.pdf HSTA 2/20/2014 8:00:00 AM
HB 217
04 HB 217 Fiscal Note DOA.pdf HSTA 2/20/2014 8:00:00 AM
HB 217