Legislature(1993 - 1994)
03/03/1993 09:07 AM Senate STA
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
SENATOR LEMAN introduced SB 129 (POWERS OF CHIEF PROCUREMENT OFFICER) as the first order of business. SENATOR RANDY PHILLIPS, Chairman of the Legislative Budget and Audit Committee, said the committee completed an audit the previous month on a sole source contract for services related to opening the Arctic National Wildlife Refuge. As a result of the audit, SB 129 was introduced. Senator Phillips said SB 129 gives the procurement officer more independence in releasing these contracts; it changes the terms of the office from four to six years; it prohibits the delegation of duties of the chief procurement officer; it sets the salary at range 26, step C; it requires the chief procurement officer, rather than the commissioner, to determine if the sole source procurement is necessary and in the public interest; it requires the chief procurement officer to make a written determination of an emergency procurement; it requires the procurement officer to independently examine the material facts of the procurement; and it makes it a class A misdemeanor for the procurement officer to knowingly make a false statement in a determination under AS 36.30.300. Senator Phillips said he would like to see the procurement officer have more independence and to make an independent decision on these contracts. Number 070 RANDY WELKER, Legislative Auditor, Legislative Audit Division, said the bill was needed to increase the autonomy and also increase the level of responsibility placed on the chief procurement officer. Since passage of the Procurement Code, the Legislative Audit Division has been involved in numerous audits across the state agencies and consistently have found problems with the manner in which primarily sole source and emergency contracts have been let by agencies. Mr. Welker said in response to Senator Phillips' concern over the ANWR contract, the division has proposed certain changes to the Procurement Code that would strengthen that position. As the system is now, the chief procurement officer primarily relies on statements made by agencies and submitted to them as support for their determination in approving sole source limited procurement and emergency contracts. Number 135 SENATOR DUNCAN said he was not very supportive of putting into statute a fixed salary of range 26, step C, and asked why it was being locked in at a step C. RANDY WELKER responded that the primary concern was to set an amount so that if the Administration disagreed with an action by the chief procurement officer, they couldn't, through retribution, reduce the salary of a chief procurement officer as a means of influencing decision or influencing that individual out of the position. He thought it was intended to set a minimum, not necessarily a maximum. SENATOR LEMAN suggested that the minimum salary could be set at a minimum of something less than range 26, step C and then could be adjusted up to a range 26, step C, if necessary. Number 2170 SENATOR ELLIS asked if the ANWR audit spoke to the contract to the extent of making any conclusions on the stupidity of luring people to Alaska for 750,000 non-existent jobs and swelling the welfare rolls. RANDY WELKER responded that the primary focus of the audit request was to look at the manner in which the contract was let. Number 192 DUGAN PETTY, Director, Division of General Services & Supply, Department of Administration, related that the department has reviewed the bill and has the following four areas of concern with the bill as it is written: (1) In Section 2, it bars the chief procurement officer from delegating any of the duties that the chief procurement officer is charged with under statute. The department believes the language is too broad, and they think if there is a need to identify determinations that should not be delegated, it should be approached that way instead of prohibiting the delegation of all duties. (2) Section 2 also sets the annual salary at range 26, step C. Currently, the chief procurement officer holds a title in the partially exempt branch as the chief procurement officer. That position was reviewed by Personnel and it was determined that the appropriate pay range was a range 23. The department's view is that it is a perogative of the executive branch and that range 23 is an appropriate range for the duties of the chief procurement officer. (3) Section 4 relates to emergency procurements. As it is written, it would require the chief procurement officer to make a determination of any emergency, and the department believes that the statute was set out to allow the procurement officer, not the chief procurement officer, who would be the person who would need to initiate an emergency procurement to have the flexibility to respond to emergency situations. The department thinks that this is adequately addressed in regulations where they have a class B emergency set out in regulations. (4) Section 5 relates to the determinations made by the chief procurement officer. As it is written, it would require the chief procurement officer to independently go back and verify all material facts that would support the argument that there is an evidence for a sole source determination. It will take a significant amount of time for the chief procurement officer to go back and independently verify each and every fact. The net effect will be to slow down a process that's already considered by many to be cumbersome and too slow. The department has proposed some compromise language where if in the opinion of the chief procurement officer there is a need to go back and independently verify, that they may do the independent verification. In response to Senator Duncan's inquiry earlier in the meeting as to what the penalty was for a class A misdemeanor, Mr. Petty said it was maximum sentence of one year and a fine of $5,000. Elsewhere in the statute, it does set out that if an individual participates in a scheme or artifice to get around the requirements of the Procurement Code, it is set out as a class C felony. Number 293 SENATOR PHILLIPS asked Mr. Petty to come up with some suggested language on the delegation of powers of the chief procurement officer, as well as suggested language for emergency procurements that is addressed in Section 4. Number 315 LOREN RASMUSSEN, Chief of Design, Construction & Maintenance Standards, Department of Transportation & Public Facilities, said the department handles all the procurements for construction and for the state equipment fleet. They think the legislation would have some affect on how they determine emergencies. A two-tiered system for emergencies is very appropriate because they need to respond very quickly to emergencies. He stated that DOT would be very supportive of the changes suggested by Senator Phillips. Number 348 SENATOR PHILLIPS asked VERN JONES, Chief Procurement Officer for the Division of General Services, if he could give an overview of the $800,000 ANWR contract. Mr. Jones answered that he was not the chief procurement officer at the time, but he has reviewed the audit and looked at the request. He said it appears that the situation arose that in the opinion of the Governor's office, the lobbying effort was needed, but he assumes due to the workings of Congress that it was not possible to select a lobbyist until such time that Congress acted, and by that time, there was not sufficient time to go out competitively and solicit for this. Number 370 SENATOR PHILLIPS said he thought there should be due process in letting these contracts out and it should be competitive bids. Number 380 SENATOR LEMAN asked Mr. Jones if he was aware of any other complaints that would justify the changes made in this bill. VERN JONES responded that he was not aware of any other complaints. Number 390 SENATOR LEMAN stated SB 129 would be held over until the Friday meeting.
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