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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