State's e-commerce project draws protests

Backers hope pilot program will save millions in administrative costs

Posted: Thursday, November 13, 2003

ANCHORAGE - Web surfers on the Internet have been doing it for years: Finding bargains and buying items with the click of a mouse. Now the state of Alaska is going to try it.

The state is getting ready to launch a pilot project to see if e-commerce procurement methods can save millions in administrative costs. The legislator who sponsored the program is hopeful, but the plan has drawn sharp criticism from vendors, union representatives and proponents of the state-supported "Buy Alaska" marketing program.

The project was authorized this year in House Bill 313, sponsored by Rep. Lesil McGuire, an Anchorage Republican.

The measure exempts the state Department of Administration and a not-yet selected private firm from the state's procurement code.

Initial plans call for the state to contract with a business to manage purchases of goods and services for the state Department of Transportation Southeast sector, which includes the Marine Highway System.

Walt Harvey, contracting officer for the Department of Administration, said a request for proposals was to be issued the first week of November seeking bids from companies who want to work with the state on the project.

McGuire told the Alaska Journal of Commerce that exemption from the state's strict procurement and bidding code was needed because the code is outdated.

"There isn't a procedure within Title 32 to allow for online signatures and authorizations and things like that," McGuire said, "the kinds of authorizations you need to put things into an e-commerce format."

The move has generated a lot of calls to her office from people worried that the change could shut out local businesses from dealing with the government and put state workers out of jobs.

"People thought, 'Oh, what they're really trying to do is get around 'Buy Alaska,' and that is not our goal at all,"' McGuire said. "In fact, there is a specific provision in the bill that encourages, wherever possible, the continued use of Alaskan companies."

The project is not sitting well with Arnie Swanson, manager of Truckwell of Alaska, an Anchorage trucking equipment distributor and fabrication company.

"I guess the bottom line is, if they order a product and it's from Colorado or Houston or wherever, and it comes up here, who's going to handle the warranty?" Swanson asked. "It's not going to be us. Not only that, but the money's not going to stay in the state. It's going bye-bye."

The idea of the state using a private procurement consultant brings with it the potential of supply disruptions and loss of revenues for dozens of businesses across the state, he said.

"Every equipment person in this town, the contractors ... all the way down the line," could be affected by supply bottlenecks and a myriad of customer relations problems, he said.

"If that happens, then we lose our 5 percent bidder's preference, and on and on and on," Swanson said. "It's going to be like back in the '60s and '70s when all the money left the state.

Swanson said he has spoken with several state employees in Anchorage, Juneau and Fairbanks who are afraid of losing their jobs next spring if the new program takes hold.

McGuire said she hopes that does not happen.

"I've met with the union ... that's why the bill was so conservatively and narrowly crafted," she said. "The idea was not that procurement officers would be losing their jobs under this bill at all."

McGuire said there is a tendency for people to fear change.

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