Consider bill's effect

Letter to the editor

Posted: Sunday, April 10, 2005

Alaska Businesses and citizens should be aware of SB160 which was introduced to the legislature on April 1.

Supposedly SB160 was introduced as a means to enhance State procurement by encouraging the use of e-commerce tools. What it really does is quietly eliminate the state procurement process and place a private firm in charge of spending your money.

The Procurement Code (AS36.30) requires agencies to apply varying levels of competition between vendors depending upon the cost of the purchase. Alaskan businesses have preferences which assist in keeping state money in Alaska.

In 2003, the Legislature passed HB313 which enacted a "pilot project" whereby the state would test outsourcing its purchasing functions to a private contractor who would use e-commerce tools. This program was to involve two departments and two other instrumentalities of the state and was not to exceed three years.

The Department of Administration released a request for proposals and subsequently awarded a contract to Alaska Supply Chain Integrators (ASCI). The Department of Transportation was selected as the test department for the project. Ten state jobs were eliminated and ASCI assumed their duties. ASCI is using state office space, equipment (computers, phones, and copiers), and supplies. ASCI now performs the same duties that were performed previously by state employees in the same state facility with no overhead cost to ASCI. The catch is they are not required to follow the Procurement Code, use Alaska bidders, or Alaska Bidder Preferences.

SB160 surreptitiously eliminates the "pilot project" and allows the governor to expand the contract to all departments. Approximately 200 state jobs will be eliminated and ASCI, a private corporation, will be put in control of spending $425,000,000 of your state's money per year. Said contractor will have no incentive to spend that money in Alaska, will not have to request bids, and will not have to apply Alaskan preferences.

Businesses who do business with the state should be concerned that once ASCI is in charge of the state's purse there is no guarantee that the money will remain in Alaska, that the vendor pool will not be reduced to "friends" of the contractor, or that corruption will not run rampant. I encourage Alaska business owners, their employees, and all Alaskan citizens to look at this bill carefully and to contact their legislators regarding the potential impact that the passage of SB160 will have on the people of Alaska.

Phyllis Lewis


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