HB 257 - STATE PROCUREMENT ELECTRONIC TOOLS 2:45:32 PM CHAIR McGUIRE announced that the first order of business would be HOUSE BILL NO. 257, "An Act relating to a procurement and electronic commerce tools program for state departments and instrumentalities of the state; and providing for an effective date." [Before the committee was HB 257, as amended on 4/18/05.] CHAIR McGUIRE, speaking as chair of the House Judiciary Standing Committee, sponsor of HB 257, relayed that although a proposed committee substitute (CS) for HB 257, Version 24-LS0826\Y, Bannister, 4/21/05, was available for adoption as a work draft, the committee must also readopt the preferences section of Conceptual Amendment 1, as amended, to HB 257 - the original version of the bill - which was adopted at the bill's last hearing. She explained that Version Y simply extends, for another year, the sunset provided for in the 2003 legislation originally authorizing the pilot project. REPRESENTATIVE GRUENBERG moved to adopt the proposed CS for HB 257, Version 24-LS0826\Y, Bannister, 4/21/05, as the work draft. There being no objection, Version Y was before the committee. REPRESENTATIVE GRUENBERG made a motion [to adopt Conceptual Amendment 1] to "meld into" Version Y [the amendment which had been adopted to HB 257, that being Conceptual Amendment 1, as amended with regard to proposed subsection (c) referencing only proposed subsections (d)-(r), and which prior to being amended read: A BILL  FOR AN ACT ENTITLED "An Act relating to a procurement and electronic  commerce tools program for state departments and  instrumentalities of the state; and providing for an  effective date."    BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF  ALASKA:  * Section 1. AS 36.30 is amended by adding a new section to article 1 to read:  Sec. 36.30.093. State procurement and electronic  commerce tools program.  (a) The department may enter into a program under which the department contracts with a person from the private sector to provide procurement services and to provide for the delivery and use of electronic commerce tools. Notwithstanding any other provision of this chapter, the contract shall be awarded under AS 36.30.100 - 36.30.265. (b) Notwithstanding any other provision of this chapter, all state departments and instrumentalities of the state may participate in the program authorized by (a) of this section. (c) A procurement conducted by the person selected under (a) of this section is not subject to this chapter or to AS 36.15. However, the procurement is subject to (d) - (u) of this section. (d) A contract based on solicited bids shall be awarded to the lowest responsive and responsible bidder after an Alaska bidder preference of five percent has been applied for evaluation purposes. (e) If a bidder qualifies as an Alaska bidder and is offering services through an employment program, a 15 percent cost preference will be applied during evaluation. (f) If a bidder is an Alaska bidder and is a qualifying entity, a ten percent cost preference will be applied during evaluation. (g) If a bidder is an Alaska bidder and if 50 percent or more of the bidder's employees at the time the bid is submitted are persons with disabilities, a ten percent cost preference will be applied during evaluation. The contract must contain a promise by the bidder that the percentage of the bidder's employees who are persons with disabilities will remain at 50 percent or more during the contract term. (h) Insurance-related contracts shall be awarded to the lowest responsive and responsible bidder after an Alaska bidder preference of five percent has been applied during evaluation. In this subsection, "Alaska bidder" means a person who is an Alaska bidder and an Alaska domestic insurer. (f) Alaska products shall be used whenever practicable in procurements for a state agency. Recycled Alaska products shall be used when they are of comparable quality, of equivalent price, and appropriate for the intended use. (g) If a bid indicates that the product(s) being purchased will be recycled Alaska products, a cost preference of five percent will be applied during evaluation. (h) In a project financed by state money in which the use of timber, lumber, and manufactured lumber products is required, only timber, lumber, and manufactured lumber products originating in this state from local forests shall be used wherever practicable. (i) When agricultural products are purchased , a seven percent cost preference will be applied during evaluation to agricultural products harvested in the state. (j) When fisheries products are purchased, a seven percent cost preference will be applied during evaluation to fisheries products harvested or processed within the jurisdiction of the state. (k) If a bid or offer designates the use of an Alaska product that is identified in the contract specifications and designated as a Class I, Class II, Class III state product under AS 36.30.332, a cost preference equal to the percentage established for the class under AS 36.30.332(c) will be applied to the product during evaluation. The program contractor shall use the Alaska product preference list, as described in 3 AAC 92.090(a), as the basis for establishing the percentage of Alaska product preference. (l) If a contractor designates the use of an Alaska product in a bid or proposal and fails to use the designated product for a reason within their control, each payment under the contract shall be reduced according to the schedule set forth in AS 36.30.330(a). (m) Except as provided under (q) of this section, all preferences are cumulative and shall be applied in the order referenced under (d) - (n) of this section. (n) A bidder may not receive a preference under this section under both (d) and (e), (d) and (f), or (e) and (f) for the same contract. (o) In order to qualify for a preference under (e), (f), or (g) of this section, a bidder shall add value by actually performing, controlling, managing, and supervising the services provided, or a bidder shall have sold supplies of the general nature solicited to other state agencies, governments, or the general public. (p) When awarding a contract under competitive sealed proposals, the program contractor shall consider the preferences described in this section. Applicable preferences shall be applied solely to the cost portion of the proposals during evaluation. (q) Informal procurements conducted by the program contractor are subject to the preferences described in this section. (r) In this section, (1) "agency" has the meaning given in AS 36.30.990(1); (2) "agricultural products" has the meaning given in AS 36.15.050(g)(1); (3) "Alaska bidder" has the meaning given in AS 36.30.170(b); (4) "Alaska products" has the meaning given in AS 36.30.338(1); (5) "contract" has the meaning given in AS 36.30.990(7); (6) "employment program" has the meaning given in AS 36.30.990(11); (7) "instrumentalities of the state" means a state public corporation, a state enterprise, or another administrative unit of state government that handles its procurement and supply management in a manner that is separate from a department of the state; (8) "qualifying entity" has the meaning given in AS 36.30.170(e)(1)-(4); (9) "person" has the meaning given in AS 36.30.990(16); (10) "person with a disability" has the meaning given in AS 36.30.170(k); (11) "program contractor" means the contractor selected by the department to manage the program; (12) "recycled Alaska product" has the meaning given in AS 36.30.338(4). * Sec. 2. The uncodified law of the State of Alaska enacted in secs. 2 and 3, ch. 51, SLA 2003, are repealed. * Sec. 3. The uncodified law of the State of Alaska is amended by adding a new section to read: APPLICABILITY. Nothing in this Act affects the validity of actions taken by the Department of Administration under ch. 51, SLA 2003, before the effective date of this Act. * Sec. 4. This Act takes effect immediately under AS 01.10.070(c). CHAIR McGUIRE indicated that [Conceptual Amendment 1] would put the bidder preferences back in the bill. REPRESENTATIVE GARA objected for the purpose of discussion. CHAIR McGUIRE reiterated that Version Y simply extends the pilot project, and that [Conceptual Amendment 1] would ensure that the bidder preferences therein would apply to any contract authorized by the 2003 legislation. REPRESENTATIVE GARA said he wants to ensure that [Conceptual Amendment 1] really does what Chair McGuire intends it to do. VANESSA TONDINI, Staff to Representative Lesil McGuire, House Judiciary Standing Committee, Alaska State Legislature, reiterated that [Conceptual Amendment 1, as amended], which was brought forth by the administration, had been adopted at the fill's last hearing for application to the original legislation. REPRESENTATIVE GARA said he wanted to ensure that [Version Y and Conceptual Amendment 1] would not expand the current pilot project to more departments. CHAIR McGUIRE said [they would not], again reiterating her belief that [Conceptual Amendment 1] simply adds the bidder preferences to Version Y. She noted that Alaska Supply Chain Integrators and other [contractors] object to [Version Y]. REPRESENTATIVE GRUENBERG withdrew his motion [to adopt Conceptual Amendment 1]. REPRESENTATIVE GRUENBERG then restated the motion, that being to adopt a new [Conceptual Amendment 1], to "incorporate Section 1 [of Conceptual Amendment 1, as amended,] into this bill. MS. TONDINI attempted to clarify that [new Conceptual Amendment 1] would incorporate subsections (c)-(r) [of Conceptual Amendment 1]. REPRESENTATIVE GRUENBERG concurred and, in response to a question, posited that the drafter would insert [new Conceptual Amendment 1] in the proper location. REPRESENTATIVE GARA said he would not hold the bill up but would instead review the language later to ensure that it did what the committee intended. He then removed his objection to the motion [to adopt new Conceptual Amendment 1]. CHAIR McGUIRE stated that [new Conceptual] Amendment 1 was adopted. 2:50:58 PM REPRESENTATIVE GRUENBERG turned attention to Section 2 of [Conceptual Amendment 1, as amended, as it was intended to apply to the original version of HB 257] and said he didn't think the committee ought to adopt that provision. The committee took an at-ease from 2:51 p.m. to 2:52 p.m. 2:52:34 PM REPRESENTATIVE DAHLSTROM moved to report the proposed CS for HB 257, Version 24-LS0826\Y, Bannister, 4/21/05, as amended, out of committee with individual recommendations and the accompanying fiscal notes. REPRESENTATIVE GARA objected [for the purpose of discussion], and offered his understanding that [new Conceptual Amendment 1] would incorporate subsections (c)-(r) [of Conceptual Amendment 1, as amended]. CHAIR McGUIRE, after ascertaining that there were no further objections to the motion, announced that CSHB 157(JUD) was reported from the House Judiciary Standing Committee.