Legislature(1993 - 1994)
03/03/1993 09:07 AM Senate STA
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* first hearing in first committee of referral
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+ teleconferenced
= bill was previously heard/scheduled
SENATE STATE AFFAIRS COMMITTEE
March 3, 1993
9:07 a.m.
MEMBERS PRESENT
Senator Loren Leman, Chairman
Senator Jim Duncan
Senator Johnny Ellis
MEMBERS ABSENT
Senator Mike Miller, Vice Chairman
Senator Robin Taylor
COMMITTEE CALENDAR
SENATE BILL NO. 129
"An Act relating to the state's chief procurement officer."
SENATE BILL NO. 80
"An Act eliminating, consolidating, changing the membership
requirements of, and transferring the duties of various
boards, commissions, councils, panels, authorities,
corporations, foundations, and similar entities of state
government; and providing for an effective date."
SB 33 (GRANTS FOR LOCAL EMERGENCY PLANNING) WAS SCHEDULED
BUT NOT HEARD THIS DATE.
PREVIOUS SENATE COMMITTEE ACTION
SB 129 - No previous action to record.
SB 80 - See State Affairs minutes dated 2/10/93,
2/17/93, 2/19/93, 2/24/93.
SB 33 - See Community & Regional Affairs minutes
dated 2/23/93.
WITNESS REGISTER
Senator Randy Phillips
State Capitol
Juneau, AK 99801-1182
POSITION STATEMENT: Offered information on SB 129
Randy Welker, Legislative Auditor
Legislative Audit Division
P.O. Box 113300
Juneau, AK 99811-3300
POSITION STATEMENT: Offered information on SB 129
Dugan Petty, Director,
Division of General Services
Department of Administration
P.O. Box 110210
Juneau, AK 99811-0210
POSITION STATEMENT: Suggested changes to SB 129
Loren Rasmussen, Chief of Design &
Construction Standards
Department of Transportation & Public Facilities
3132 Channel Drive
Juneau, AK 99801-7898
POSITION STATEMENT: Testified in support of SB 129
ACTION NARRATIVE
TAPE 93-15, SIDE A
Number 001
Chairman Leman called the Senate State Affairs Committee
meeting to order at 9:07 a.m.
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.
Number 396
SENATOR LEMAN brought SB 80 (BOARDS, COMMISSIONS, COUNCILS,
AUTHORITIES) before the committee as the next order of
business. He directed attention to two amendments being
proposed by Senator Ellis.
Number 411
SENATOR ELLIS moved the adoption of amendment #1. He said
it would deny the proposed transfer of the Pioneers' Homes
Advisory Board duties to the Older Alaskans Commission.
AMENDMENT #1
Delete Sections 24, 25, and 26 in their entirety.
Delete the following references in Section 26: AS
44.21.100, 44.21.110, 44.21.120, and 444.21.130.
Hearing no objection to amendment #1, the Chair stated it
had been adopted.
Number 423
SENATOR ELLIS moved the adoption of amendment #2. It would
delete the sections of the bill referring to the
Telecommunications Information Council.
AMENDMENT #2
Page 3, lines 9 - 15: Delete Section 4
Page 3, line 16 - 20: Delete Section 5
Page 4, line 2 & page 5, line 2: Delete Section 88
Delete Sections 18 through 23
Delete Sections 27 through 30
Delete Section 36
Page 16, line 19: Delete AS 44.21.045(c)(1), 44.21.045(f)
Hearing no objection to amendment #2, the Chair stated it
had been adopted.
Number 447
SENATOR ELLIS stated that he would not be offering an
amendment in the State Affairs Committee relating to the
Permanency Planning Review Board, but would do so in the
HESS Committee at the request of Senator Phillips.
Number 450
SENATOR DUNCAN moved that CSSB 80 (STATE AFFAIRS) be passed
out of committee with individual recommendations. Hearing
no objection, it was so ordered.
Number 450
There being no further business to come before the
committee, the meeting adjourned at 9:32 a.m.
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