SENATE BILL NO. 12 "An Act relating to state and public entity procurement, including the State Procurement Code, procurement preferences, contract awards, the use of small procurement provisions for certain amounts of leased space, the Alaska business license requirement for Alaska bidder and other procurement preferences, the proof of registration of construction contract bidders and offerors, the establishment and maintenance of lists of persons who want to provide supplies or services to the state, state agencies, and state instrumentalities, electronic bids and proposals, the chief procurement officer, small procurements, and writings; relating to the meaning of 'Alaska bidder'; and providing for an effective date." 9:08:36 AM Co-Chair Meyer stated that the committee heard public testimony for SB 12. LAURA PIERRE, STAFF, SENATOR FAIRCLOUGH, requested an explanation of the procurement process from the Department of Administration (DOA). VERN JONES, CHIEF PROCUREMENT OFFICER, DEPARTMENT OF ADMINISTRATION, highlighted relevant information by providing a sectional analysis of the legislation. He began with section one, which was a technical change that renumbered and moved a preference. Section 2 affected the local agricultural preference making the language of the preference consistent. He skipped to section 5, which changed the salary range for the Chief Procurement Officer reflecting a change in the Division of General Services as well as the duties performed. Sections 6 - 10 included additional technical changes on preferences including relocation to a common section. Section 11 amended the small procurement section. The change increased the threshold limit for small procurements of leased space from 3,000 square feet to 7,000 square feet, consistent with section 18. Mr. Jones continued with section 12 of the sectional analysis. The section clarified when Alaska business licenses were required for formal bids and proposals. The change required bidders to provide proof of their Alaska business license prior to award, but required the license at the time of bid submission in order to qualify for the Alaska bidder preference. Section 13 omitted the vendor lists, which was an antiquated process. The department was implementing an automated procurement process. He skipped to section 15, which clarified construction contractor registration requirements, now explicitly requiring registration before awarding a contract. Mr. Jones continued with section 16, which clarified the Alaska business license requirements for competitive sealed proposals and qualification for the Alaska bidder preference using language consistent with that used in section 13. He skipped to section 18, which included a substantive change amending the small procurement threshold to $100 thousand for goods and professional services, to $200 thousand for construction, and 7 thousand square feet for lease of space. 9:14:52 AM Mr. Jones continued with section 19. The section consolidated the Alaska bidder preference, Alaska veterans' preference, and other preferences formerly in AS 36.30.170(b). The section also clarified the requirement for a disability preference and eliminated the "employers of people with disabilities preference" and excluded real estate leases from application of procurement preferences. Section 21 clarified which preferences were cumulative, and which may not be combined. He continued with section 23, which moved the definition of "Alaska bidder" and added new definitions for "in writing" and "written" to include information in electronic form. 9:18:05 AM Co-Chair Meyer appreciated the changes in the procurement code. He asked about section 5. He noticed that changes were being proposed for the testifier's position. He asked if Mr. Jones supported of the proposed changes. Mr. Jones responded that the Chief Procurement Officer would no longer serve as Director of the Division of General Services. He was the Chief Procurement Officer in 2002 and he assumed the overall responsibilities for the division. The change coincided with plans to establish a director position for the Division of General Services allowing the procurement officer to focus on statewide procurement. 9:20:03 AM Senator Olson understood that the vendor list was antiquated. He asked about entities without access to computers or enough broadband to interface with the new electronic process. He wondered how a contractor in the bush could bid on a project without access to the internet. He wished to level the playing field for veterans and disabled Alaskans. 9:21:41 AM Mr. Jones replied that a transition period was imminent. He pointed out that the state was implementing an automated procurement system as part of the Integrated Resource Information System (IRIS). The system will include resources for vendors providing them with the necessary information. Internet access was necessary. The vendor lists were not required, so the online public notice system contained all posts from the division. The law required that the division maintain the vendor lists, but they had fallen out of use. The section also removed a requirement that was no longer used. 9:23:32 AM Senator Hoffman thanked the sponsor for the legislation. He himself owned several corporations and was chairman of the Bethel Native Corporation. He asked if the legislation helped to streamline the cumbersome application process. Mr. Jones responded that the changes allowed for automation of the formal bids and procurement, which would streamline the process. He added that implementation of IRIS would allow businesses to submit bids by populating forms online rather than creating Request for Proposals (RFP). He stated that raising the small procurement thresholds would alter business by removing barriers of complexity. Senator Hoffman agreed that the legislation would simplify the process for Alaska small businesses. 9:25:45 AM Senator Bishop echoed the statements of Senator Hoffman. He pointed out section 19, which eliminated redundancy in disability determinations for veterans. He appreciated the legislation's efficiency. Co-Chair Kelly MOVED to REPORT SB 12 out of committee with individual recommendations and the accompanying fiscal note. There being NO OBJECTION, it was so ordered. SB 12 was REPORTED out of committee with a "do pass" recommendation and with one previously published zero fiscal note: FN1 (ADM).