3 firms bid to take over state communications

Labor agreement promises to protect jobs during state's major privatization effort

Posted: Tuesday, January 30, 2001

Alaska could become the first state in the nation to contract with the private sector for all of its telecommunications services.

In addition, a potentially groundbreaking labor agreement could smooth the way for future discussions with state unions about privatization efforts.

Three would-be telecommunications providers have responded to the state's request for proposals. The three proposals are undergoing evaluation from technical teams at the Alaska Department of Administration. The names of the companies, or consortiums of companies, are confidential under state procurement law.

State government spends about $26 million a year on telephone, videoconference, pager, mobile radio, Internet and other telecommunications services.

More than $20 million of that is contracted to numerous providers in a piecemeal fashion, said Administration Commissioner Jim Duncan. Other state agencies, which get billed by Administration for certain telecommunication services, haven't always been happy with the arrangement.

"There's always been concern expressed that perhaps we could be doing it more efficiently and more effectively," Duncan said. "Government can't react as quickly to technical changes as the private sector can."

But it's not certain that any of the bidders will be found "responsive" to the state's request for proposals, Duncan said. "This is not a must-do thing. We could very well determine that we're better off ... providing services as we presently are."

The target date for awarding a contract, if that is the recommendation of the technical teams, is March 15.

The contract would be for about $100 million over four years, with the option of two one-year extensions.

Duncan acknowledged concern that completely privatizing telecommunications could put the state at a disadvantage when negotiations over contract renewal take place with the new single provider. But the state will retain ownership of some critical infrastructure, such as its microwave system linking Fairbanks and Anchorage, he said. The "help center," a customer service function, will remain with the state, he said.

Meanwhile, the state has bought union peace through employment guarantees.

In a letter of agreement signed last fall with two unions, Public Employees Local 71 and the Alaska State Employees Association, 42 workers who would be affected are promised they will not be laid off.

Under the agreement, which was made a condition of the pending telecommunications contract, the union members could remain state employees at current pay and benefits but work at the direction of the contractor. They also could ask for reassignment within state government, either as soon as possible or after a sabbatical, with no loss of compensation, or could go to work for the contractor and surrender their rights as state employees.

"It may be precedent-setting in the way we handled it with labor," said Duncan, a former Democratic state senator from Juneau.

"We negotiated an agreement that protected every single person's job," agreed Chuck O'Connell, business manager for ASEA. "This is kind of a unique thing."

Bill McAllister can be reached at billm@juneauempire.com.

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