Legislature(2003 - 2004)
03/04/2004 01:35 PM Senate TRA
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
SB 358-ALASKA RAILROAD TRACK WORK The committee took up SB 358. CO-CHAIR COWDERY, as the bill's sponsor, provided the sponsor statement as follows: Senate Bill 358 amends the procurement code so that the Department of Transportation and Public Facilities [DOT&PF] can work directly with the Alaska Railroad Corporation [ARRC] track work through a reimbursable service agreement similar to other utilities, like power and water lines. Prior to 1996, ARRC could conduct track work for DOT&PF projects under utility agreements. After 1996, the procurement code was amended requiring DOT&PF to contract for track work under the competitive bid process. For a time, contractors bid - and won - such work. Recently, however, contractors have shown less interest in bidding such work. They don't have the specialized, expensive equipment to conduct the work, and they experience high costs trying to meet the specifications required. To remedy this situation and ensure DOT&PF projects move forward, SB 358 will allow DOT&PF flexibility to use either the competitive bid process or to work directly with the Alaska Railroad. The advantage of this arrangement for DOT&PF is possible lower costs and a savings of time. The advantage for the Alaska Railroad will be enhanced quality and assurance that industry standards are met. CO-CHAIR COWDERY said that AGC [Associated General Contractors] is on board with this bill. MS. WENDY LINDSKOOG, Director of External Affairs, Alaska Railroad Corporation (ARRC), said that Eileen Reilly, VP of projects, and Tom Brooks, Chief General Engineer were on-line. MR. MARK O'BRIEN, Chief Contracts Officer, DOT&PF, said the department has been working with the Railroad and the Associated General Contractors on this issue, and is supportive of SB 358. There have been a number of occasions in which contractors have not been able to successfully complete work on their projects, and the Railroad has had to complete projects for them. The problem is that a number of firms have gone out of business, and primarily one firm from the Lower '48 has been doing this Railroad work when it has been bid out. Mobilizing the equipment for - especially smaller jobs - is not cost-effective. It makes sense to enter into an agreement with the Railroad, similarly to how agreements are entered into with utilities, since they have the equipment and the workforce available to do the work, especially on the smaller projects. MR. O'BRIEN said there are larger projects that may be bid out, for example projects that exceed the capacity of the Railroad, such as the Whittier Tunnel Project, since that project would have tied up resources and manpower over a number of years. In those cases, it's worthwhile to mobilize contractors to do that work. Entering into an agreement with the Railroad will, on a number of occasions, work out to the benefit of both the department and the Railroad. CO-CHAIR COWDERY asked for a description of some of the smaller projects. MR. O'BRIEN said any time there's an intersection area or a street improvement project where there are railroad tracks on or nearby, it's not cost-effective to bring contractors in. He said those types of rehabilitative projects involving a railroad crossing are fairly numerous. CO-CHAIR COWDERY asked if it would be put out to bid if the railroad were to overpass the highway. MR. O'BRIEN said this bill would only affect track, meaning ties and ballast. Up through sub-grade and all of the work associated with getting that crossing in place would still be under contract and would be done by a prime contractor. They would quit at the point when the railroad "would take over and do tracks, ties, and ballast." CO-CHAIR COWDERY said he was mainly wondering if in Willow, the overpass and Railroad, or the Parks Highway would fall under this or would it come under competitive bid. MR. O'BRIEN said this would likely be competitively bid. The only part likely to be entered into an agreement with the Railroad would be the track alignment and construction portion. The remaining superstructure and sub-base for all of that work would be part of the competitively bid project. SENATOR GEORGIANA LINCOLN asked if AGC was on board with this as well. She referred to "construction of rails, ties, or ballast for the tracks, and DOT may (not shall) enter in an agreement with the Railroad ... and the railroad may (not shall) perform the work itself without procuring a contractor" saying that she had no problem with any of that. She read, "may perform the work [itself] without procuring a contractor to provide supplies, services, professional services" and asked if this includes construction of rails and ties, saying she hoped that Alaska businesses and Alaskan labor are utilized for supplies, services, and construction services. MS. LINDSKOOG replied this refers to the fact that often there are stockpiles of equipment and supplies that are needed at the Railroad that have already gone out under the procurement process. She said this refers to a situation in which a project was being done for DOT&PF and there is already a stockpile of materials there. MS. EILEEN RILEY, Vice President of Projects, ARRC, confirmed that if materials were available, those could be used without delaying the project. SENATOR DONNY OLSON asked if there was anybody besides AGC, from the private sector, who had an opinion on SB 358. CO-CHAIR WAGONER said his understanding was that these subcontractors are from outside of Alaska, and no longer are available to do these construction projects. MR. O'BRIEN confirmed that the last contractors, and subcontractors for the rail portion, were out of state contractors. CO-CHAIR COWDERY moved to report SB 358 out of committee with individual recommendations and zero fiscal note, and asked for unanimous consent. CO-CHAIR WAGONER asked if there was any objection. There being none, it was so ordered. 1:49 p.m. CO-CHAIR WAGONER called for a brief at ease. He announced that Senator Therriault had joined the meeting and the full committee was in attendance.
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