HB 262-PROCUREMENT EXEMPTION: PDA, OPA  8:06:59 AM CHAIR LYNN announced the first order of business was HOUSE BILL NO. 262, "An Act exempting the Public Defender Agency and the office of public advocacy from certain provisions of the State Procurement Code; and providing for an effective date." 8:07:10 AM REPRESENTATIVE LINDSEY HOLMES, Alaska State Legislature, as prime sponsor, presented HB 262. She explained that the proposed legislation would clarify how the state's procurement code applies to the Office of Public Advocacy (OPA) and the Public Defender Agency (PDA). She said those are the state agencies that act as defense attorneys representing indigent clients in criminal cases. They are paid by the state through the Department of Administration. She said in most cases, "the other side" is the Department of Law (DOL). She said there is question as to when those agencies are subject to the procurement code and when they are not. Under Section 1, of HB 262, neither OPA nor PDA would have to obtain permission from the attorney general to hire expert witnesses or counsel, which would put both agencies on a level playing field with DOL. 8:09:56 AM MIKE BARNHILL, Deputy Commissioner, Department of Administration (DOA), said prior to his current three years as deputy commissioner, he was an assistant attorney general (AG) with the Department of Law. While there, he said, he used the procurement code frequently to retain the services of outside counsel. He stated that in the field of law, one attorney does not equal another attorney. He explained that the field is highly specialized; one cannot get a defense attorney as representation on a tax case, for example. Therefore, he emphasized the importance of tailoring the procurement to apply in highly specialized situations. MR. BARNHILL said Section 2, of HB 262, is the limited competition provision. He said normally, for all state agencies, permission must be obtained from the chief procurement officer in the Division of General Services, within the Department of Law. For legal service, one must go to the AG to get permission to use the limited competition statute. He said that is very effective for retaining specialized counsel. He said under HB 262, OPA and PDA could go to the AG to get the permission for "limited competition procurement." Deputy Commissioner Barnhill said he used the limited competition procurement many times. He said it was very effective; he got great counsel to represent the state. He continued as follows: The most significant one was the counsel we retained in the lawsuit against Mercer for actuarial negligence. And I can tell you with a high degree of certainty that the outcome of that case was entirely dependent on the counsel we selected. The ability to get the right counsel to fit the case you have is entirely consistent with our rules of professional responsibility. If we just had a generic procurement code that required us to go the lowest bidder without consideration of specialization, we would routinely be hiring the wrong counsel for the wrong case. 8:12:26 AM MR. BARNHILL said under HB 262, OPA and PDA would be in the exact position as DOL with respect to retention of counsel, professional services under the limited competition statute, and the retention of expert witnesses. He explained that under the existing procurement code, DOL is exempt when it comes to hiring expert witnesses. He emphasized that "if the field of law is specialized, the field of professional witnesses is extremely specialized." For example, he said some witnesses are experts on tire treads, while others are blood splatter experts. He said he believes that is why DOL has had that exemption. He suggested that when AS 36.30 was enacted, it was probably an oversight that the criminal defense side of the equation was overlooked. The proposed legislation would restore that by exempting both OPA and PDA so that those agencies can get whatever expert they need without having to go through the procurement code. He noted that the bill has a zero fiscal note. 8:14:02 AM MR. BARNHILL, in response to Chair Lynn, said in order to get representation by either OPA or PDA at the public's expense, a person would have to be indigent. If that indigent person needed an expert witness in order to determine the facts in a case, he would then be provided with one. 8:15:22 AM MR. BARNHILL, in response to a question from Representative Keller, offered his understanding that the point at which someone would be considered indigent is decided by the courts. REPRESENTATIVE KELLER said it is not clear how changing the authority for the contracting addresses some of the concerns of the audit and how it relates to the fiscal note. 8:16:53 AM MR. BARNHILL said the audit found that OPA was not complying with the procurement code. Further, the audit found that there was failure in contract oversight. He said the latter is not addressed in HB 262, and DOA filed a response with the Division of Legislative Audit and could provide that response to the committee. He said DOA's oversight is broad; it includes the Division of Motor Vehicles (DMV), OPA, PDA, and the core administrative entities. Within this, he said, DOA has the Division of Administrative Services, which provides services including contract oversight to a number of its divisions. In this particular context, DOA's Division of Administrative Services was not providing contract management oversight, and the recommendation of the Division of Legislative Audit is that it do so. He related that DOA has begun to provide more oversight, but it is a large task to do so for every division. He stated that DOA believes it is important to effectively monitor and manage contracts "across the departments," but it will have to observe the oversight to determine its effectiveness. 8:19:04 AM MR. BARNHILL, with respect to procurement, stated his belief that OPA and PDA did not interpret the procurement code in the same way that the Division of Legislative Audit did. He explained that [OPA and PDA] took the position that the AG could not control how they procured legal counsel or how they would procure expert witnesses. He said, "I mean, as a matter of professional responsibility, as the sponsor indicated, if you're adverse to a party, you would never dream of going to the adverse side to ask for permission to retain counsel." Further, he stated that retaining an expert witness who is not the best for a particular case could have implications with respect to "your duty of zealous advocacy." He said, "I think it just simply didn't occur to them that the procurement code wouldn't apply in this way." He concluded, "So, what we're doing is we're changing the law so we have a common understanding of how the procurement code applies with respect to outside counsel, with respect to conflict counsel, with respect to expert witnesses." 8:20:31 AM REPRESENTATIVE KELLER said it makes sense, because DOA handles the defense and the prosecutors are in DOL; [the state] must do everything it can to avoid a conflict of interest. He indicated that legislators realize that "we end up paying for the defense and the prosecution," as well as the judge and court room. He emphasized the importance of not making changes without following to proper process. MR. BARNHILL noted that Rick Allen, the director of OPA, had instituted an initiative to help control costs better within the office, particularly when it comes to retention of outside counsel; he has had regulations drafted that provide case caps by type of case, with legitimate escape clauses. He said he thinks it is an excellent approach. 8:22:31 AM REPRESENTATIVE HUGHES asked if Mr. Allen might have anything to add to the subject of cost control. 8:23:18 AM RICK ALLEN, Director, Anchorage Office, Office of Public Advocacy (OPA), stated that the implementation of the aforementioned regulations has been a "game changer" for OPA. He said when he became director of OPA he found there were no controls in place on how much contractors were being paid on cases, which posed a series of problems, one of the major ones being that without parameters on contractors, it is impossible for anyone serving as director of OPA to maintain budgetary predictability. He said the caps have been in place for about a year now, which has been a big change for the contractors; however, he said he thinks everyone has "settled in" and realizes "this is the way we're going to do business now," and it has made a big difference for OPA's bottom line. In response to a follow-up question from Representative Hughes, he said he thinks the quality of the expert witnesses and legal counsel is adequate with the caps in place. He echoed Mr. Barnhill's notation that there is always a release valve on the caps, which makes it possible to adjust the money spent on a case. He offered an explanation of the adjustment process. 8:25:38 AM MR. ALLEN, in response to Chair Lynn, said when the state pays for a person's services, then that person does not get to choose who his/her expert witness or lawyer is, although OPA will take the input of its clients into consideration. Most of the decisions about how the criminal case proceeds are made by the attorney. CHAIR LYNN surmised that a poor person "is not going to get the dream team." MR. ALLEN responded that he has practiced in other parts of the United States before coming back home to Alaska, and he emphasized he is "very, very comfortable with the standard we are able to provide." He expressed pride in the work that OPA's staff and contractors do. He ventured that Mr. Steiner from the Public Defender Agency would say the same. He stated that some of the finest criminal defense attorneys and appellate writers work for OPA or PDA; therefore, an indigent person will be assigned a quality attorney and the resources needed to properly defend the case. 8:28:13 AM QUINLAN STEINER, Director, Central Office, Public Defender Agency (PDA), opined that Deputy Commissioner Barnhill had articulated the concerns address through the proposed HB 262. 8:28:51 AM CHAIR LYNN, after ascertaining that there was no one else who wished to testify, closed public testimony on HB 262. 8:29:04 AM REPRESENTATIVE GATTIS said HB 262 seems like a simple bill that would clean-up "what we already do." She said experts in their field representing those who cannot afford representation seems to make sense, and "it directs it." She stated her support of HB 262. 8:29:35 AM REPRESENTATIVE KELLER pointed out that the House State Affairs Standing Committee is the only committee of referral for HB 262, which he opined is appropriate, because this is an issue about contract management and administration. 8:30:17 AM REPRESENTATIVE KELLER moved to report HB 262 out of committee with individual recommendations and the attached zero fiscal note. There being no objection, HB 262 was reported out of the House State Affairs Standing Committee.