SENATE BILL NO. 129 An Act relating to the state's chief procurement officer. Co-chair Pearce directed that SB 129 be brought on for discussion. SENATOR RANDY PHILLIPS again came before committee. He explained that the legislation was introduced at the request of the Legislative Budget and Audit Committee. It responds to past problems surrounding issuance of an $800.0 sole-source contract. RANDY WELKER, Legislative Auditor, concurred in comments regarding the noted sole-source contract, but he advised that it is not the only example of an improperly entered contract. In examining the root of the problem, it was determined that when the procurement code was established, the chief procurement officer was envisioned as an autonomous position with statutory protection. The position was to act independently of agencies doing the contracting in the approval or denial of contracts. That position has not functioned as envisioned. The proposed bill provides more autonomy by changing the position to a six-year term to ensure overlap from one administration to another. It further provides statutory salary protection to deter an administration from retaliating against the procurement officer by salary manipulation. For sole-source contracts, the chief procurement officer is required to independently examine the facts and determine whether the procurement is eligible for sole-source. At the present time, requests for sole-source contracts are reviewed by the procurement officer and approved based only on information provided by the agency seeking the procurement. In response to an inquiry from Senator Kerttula, Mr. Welker said that, per the procurement code, the chief procurement officer can only be removed for cause. Since cause is not necessarily defined, that aspect remains in question. DUGAN PETTY, Director, Division of General Services, Dept. of Administration, came before committee, voicing support for the bill. He said the department believes the bill will improve state procurement. Several sections seek to improve efficiencies and standardize the treatment of procurements. The department supports those streamlining efforts. Increased effort and review required of the chief procurement officer are offset by increased accountability and enhanced integrity of the process. Mr. Petty directed attention to Sec. 5 and registered concern regarding emergency procurements. He cited current statutory provisions and noted that revisions in the proposed bill would remove an agency procurement officer from making that determination and vest it totally in the chief procurement officer. It allows the chief procurement officer to delegate that duty only when he or she does not have sufficient time to make such a determination. Mr. Petty voiced his understanding that the department may interpret Sec. 5 broadly enough to allow it to encompass not only the chief procurement officer's written determination, but the process of gathering and submitting facts. If that could not be done within a 72-hour period, the power of determination would be delegated, in advance, to the agency that might incur the emergency. Mr. Petty said the department would have no objection to Section 5, if the foregoing represents an acceptable interpretation. Mr. Welker subsequently concurred in Mr. Petty's interpretation of Section 5 and voiced hope that the department would develop regulations further defining procedures. Senator Rieger directed attention of Section 9 and inquired concerning provisions exempting contracts between the Dept. of Law and contract attorneys from provisions of the procurement code. Mr. Petty said that a statewide procurement audit recommended that selection and contracts for special prosecutors be exempted from the procurement process. Issues surrounding these arrangements are often confidential. A public procurement process negates that confidentiality. Discussion followed between Senator Rieger and Mr. Petty regarding cost-reimbursement contracts. Mr. Petty noted that a variety of cost-reimbursement contracts are legitimate, effective contract tools. The administration feels agencies should have the latitude to use the form of contract that most effectively meets needs. The proposed change eliminates need for advance determination that a cost-reimbursement contract would be the most efficient means of contracting. Co-chair Pearce called for additional questions or testimony on the bill. None were forthcoming. Co-chair Frank stated need to offer an amendment relating to the leasing budget within the Dept. of Administration. He referenced department complaints that the division does not have the ability to renegotiate existing leases. That portion of the procurement system fails to operate properly. He explained that he had been working with both the department and bill drafters to develop language that would allow the department to renegotiate with an existing lessor. The initial reaction from the department has been that a savings would occur. Co-chair Frank asked that the proposed bill be HELD in committee pending development of that language. Senator Phillips advised that he had no problem with inclusion of that effort within the bill. Senator Kerttula asked that renegotiation provisions also apply to the legislature.