Legislature(2005 - 2006)BELTZ 211

04/12/2005 01:30 PM Senate LABOR & COMMERCE


Download Mp3. <- Right click and save file as

* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
*+ SB 157 REG. COST CHARGES: UTILITIES/PIPELINES TELECONFERENCED
Heard & Held
+ Senate Bill: TELECONFERENCED
OPTICIANS
<Pending Introduction & Referral>
Bills Previously Heard/Scheduled
Including But Not Limited to:
+= SB 160 STATE PROCUREMENT ELECTRONIC TOOLS TELECONFERENCED
Moved CSSB 160(L&C) Out of Committee
+= SB 108 INSURANCE TELECONFERENCED
Heard & Held
           SB 160-STATE PROCUREMENT ELECTRONIC TOOLS                                                                        
                                                                                                                                
CHAIR BUNDE announced CSSB 160(L&C) to be up for consideration                                                                  
and that it contains the Alaska bidder preference.                                                                              
                                                                                                                                
PATTY ADY, Supply Technician, Sitka Pioneer Home, opposed SB
160. She said:                                                                                                                  
                                                                                                                                
     The  state  is  nine   months  into  a  two-year  pilot                                                                    
     project. There  is insufficient data  to know  what the                                                                    
     long-term outcome  will be. A private  contractor is in                                                                    
     business  to make  money, not  to provide  for all  the                                                                    
     different needs  of Alaskans. These companies  are more                                                                    
     concerned  with  their  profit margins  than  with  the                                                                    
     quality  of  the products  used  by  frail elders.  Our                                                                    
     resident needs  are different than  the needs  of other                                                                    
     areas of the  state that could suffer  by the decisions                                                                    
     made by people  who do not have the  experience to deal                                                                    
     with  these  frail  elders....   Our  state  will  lose                                                                    
     approximately 200 jobs,  which we can ill  afford to be                                                                    
     lost.                                                                                                                      
                                                                                                                                
1:45:32 PM                                                                                                                    
SENATOR ELLIS joined the committee.                                                                                             
                                                                                                                                
1:46:05 PM                                                                                                                    
BRUCE   LUDWIG,  Business   Manager,   Alaska  Public   Employees                                                               
Association (APEA),  American Federation of Teachers,  said he is                                                               
also  Secretary-Treasurer of  the Alaska  State AFL-CIO.  He said                                                               
the pilot  program was rushed  through in  the final days  of the                                                               
2003 session. There were no  measurements of success included nor                                                               
benchmarks  for  comparison.  He  said the  bill  title  is  also                                                               
misleading. Alaska  Supply Chain Integrators (ASCI)  was the only                                                               
responsive bidder.                                                                                                              
                                                                                                                                
MR. LUDWIG said:                                                                                                                
                                                                                                                                
     Since the pilot project began,  only one quarter of the                                                                    
     work has  been audited.  The second  quarter is  in the                                                                    
     process  of the  audit and  the third  quarter is  just                                                                    
     over  and  we  can  presume that  that's  going  to  be                                                                    
     started soon. The  pilot has until June  30, 2006 until                                                                    
     it  expires.   As  the  Department   of  Administration                                                                    
     testified  last week,  the  jury is  still  out on  the                                                                    
     project. It's too  early to extend it.  The bill should                                                                    
     be held  over while a sufficient  record is established                                                                    
     to be able to make a  decision on whether or not it's a                                                                    
     success.                                                                                                                   
                                                                                                                                
MR.  LUDWIG said  he has  heard  many negative  things about  the                                                               
experience. He  heard that the  purchasing of goods  has resulted                                                               
in a  20 percent increase in  the cost. If that  is extended over                                                               
the life  of the project,  it will  actually cost the  state $2.5                                                               
million more  for the same  goods that would have  been purchased                                                               
through the state  purchasing procedure. He has  heard that 1,500                                                               
invoices haven't been  paid because they don't match  up with the                                                               
purchase orders.                                                                                                                
                                                                                                                                
     That's  Alaska firms  that  aren't  getting paid.  It's                                                                    
     going  to  affect  the   state's  reputation  with  its                                                                    
     vendors  and  it's going  to  affect  those firms  that                                                                    
     aren't getting their money timely.                                                                                         
                                                                                                                                
1:49:00 PM                                                                                                                    
He  related how  the M/V  Kennicott  had an  engine overhaul  and                                                               
seven  orders were  placed for  engine parts.  Six of  the orders                                                               
were shipped to Juneau, but the  ship was in dry-dock in Portland                                                               
and all the heavy parts had  to be shipped there. Of the original                                                               
$250,000 projected  savings, about half was  from eliminating the                                                               
warehouse,  but  that has  been  reinstated.  ASCI employees  are                                                               
working  overtime   now  and  the  remaining   savings  might  be                                                               
nonexistent.  In  addition,  since   ASCI  does  not  follow  the                                                               
procurement  code,  their  procedures  do not  meet  the  minimum                                                               
requirements  for  federal  purchasing, which  are  very  strict.                                                               
Overhead, contract  oversight and other things  were not budgeted                                                               
for. "In summary, it's too early to extend the project...."                                                                     
                                                                                                                                
1:51:19 PM                                                                                                                    
CHAIR BUNDE asked him about conflict of interest concerns.                                                                      
                                                                                                                                
MR. LUDWIG  explained he had  heard about a conflict  of interest                                                               
between a state official and  someone connected with ASCI, but he                                                               
didn't find any connection and the issue should be dropped.                                                                     
                                                                                                                                
1:52:33 PM                                                                                                                    
SENATOR SEEKINS moved  to pass CSSB 160(L&C)  from committee with                                                               
individual recommendations and fiscal note.                                                                                     
                                                                                                                                
SENATOR  ELLIS  objected to  ask  someone  to discuss  the  audit                                                               
report.                                                                                                                         
                                                                                                                                
VERN   JONES,   Chief    Procurement   Officer,   Department   of                                                               
Administration,  said the  initial audit  was done  at a  time of                                                               
lots  of transitions  and he  felt  there wasn't  a large  enough                                                               
sample to draw conclusions for the audit.                                                                                       
                                                                                                                                
SENATOR ELLIS asked when the next audit would be available.                                                                     
                                                                                                                                
MR.  JONES replied  at  the end  of  this week  and  he hoped  to                                                               
conclude the third quarter's audit by end of session.                                                                           
                                                                                                                                
SENATOR  ELLIS again  noted the  memo  from Mr.  Barton that  has                                                               
comparisons.                                                                                                                    
                                                                                                                                
MR.  JONES said  memo  is technically  correct,  but he  believes                                                               
through talking  to professionals at the  Division of Legislative                                                               
Audit  that  the  actual  sample  was  so  small,  they  couldn't                                                               
extrapolate any findings that would hold up.                                                                                    
                                                                                                                                
2:00:36 PM                                                                                                                    
SENATOR  DAVIS  noted  that  the  bill  doesn't  have  any  other                                                               
referrals and asked what the hurry is.                                                                                          
                                                                                                                                
CHAIR BUNDE replied  that he wanted the bill to  move through the                                                               
process.                                                                                                                        
                                                                                                                                
2:01:30 PM                                                                                                                    
SENATOR ELLIS also asked what's  the hurry. They are barely eight                                                               
months into the pilot program.                                                                                                  
                                                                                                                                
CHAIR  BUNDE said  he  thought progress  was  being made  towards                                                               
better  service  to the  state,  but  the  full body  makes  that                                                               
decision.                                                                                                                       
                                                                                                                                
2:02:56 PM                                                                                                                    
SENATOR ELLIS said state employees could  do a better job if they                                                               
were to  be provided  with the modern  tools and  techniques that                                                               
private  industry  has.  He also  appreciated  the  attention  to                                                               
detail  and  urged  people who  erroneously  made  references  to                                                               
conflicts   of  interest   to  correct   their  comments   in  an                                                               
expeditious manner.                                                                                                             
                                                                                                                                
CHAIR BUNDE said that had been done.                                                                                            
                                                                                                                                
A roll  call vote was  taken. Senators Ben Stevens,  Seekins, and                                                               
Chair Bunde  voted yea; Senators  Davis and Ellis voted  nay; and                                                               
CSSB 160(L&C) moved from committee.                                                                                             

Document Name Date/Time Subjects