Title 36. Public Contracts.

Chapter 05. Wages and Hours of Labor.

Article 1. Public Construction Contracts.


Sec. 36.05.005. Applicability.
This chapter applies only to a public construction contract that exceeds $25,000.


Sec. 36.05.010. Wage rates on public construction.
A contractor or subcontractor who performs work on a public construction contract in the state shall pay not less than the current prevailing rate of wages for work of a similar nature in the region in which the work is done. The current prevailing rate of wages is that contained in the latest determination of prevailing rate of wages issued by the Department of Labor and Workforce Development at least 10 days before the final date for submission of bids for the contract. The rate shall remain in effect for the life of the contract or for 24 calendar months, whichever is shorter. At the end of the initial 24-month period, if new wage determinations have been issued by the department, the latest wage determination shall become effective for the next 24-month period or until the contract is completed, whichever occurs first. This process shall be repeated until the contract is completed.


Sec. 36.05.020. Basis for determining wage.
A subcontract that is performed on public construction may be reduced to a basis of day labor for the purpose of determining whether or not the subcontractor or contractors have paid at not less than the prevailing scale of wage.


Sec. 36.05.030. Authority; investigations; hearings; regulations; enforcement.
 (a) The Department of Labor and Workforce Development has the authority to determine the prevailing wage, and whether or not this chapter is being violated. The department may when necessary for the enforcement of this chapter
     (1) conduct investigations and hold hearings concerning wages;

     (2) compel the attendance of witnesses and the production of books, papers, and documents;

     (3) adopt regulations.

 (b) If a person violates this chapter the attorney general shall, when requested by the Department of Labor and Workforce Development, enforce these provisions.




Sec. 36.05.035. Notification of contract awards.
Upon awarding a public construction contract, the state or a political subdivision of the state shall
     (1) immediately notify the commissioner of labor and workforce development of the amount of the contract, the effective date of the contract, the identity of the contractor and all subcontractors, the site or sites of construction, and provide a project description; and

     (2) verify that the bonding requirements of AS 36.25 have been met and that the requirements of AS 08.18 have been met.




Sec. 36.05.040. Filing schedule of employees, wages paid, and other information.
All contractors or subcontractors who perform work on a public construction contract for the state or for a political subdivision of the state shall, before the Friday of every second week, file with the Department of Labor and Workforce Development a sworn affidavit for the previous reporting period, setting out in detail the number of persons employed, wages paid, job classification of each employee, hours worked each day and week, and other information on a form provided by the Department of Labor and Workforce Development.


Sec. 36.05.045. Notice of work and completion; withholding of payment.
 (a) Before commencing work on a public construction contract, the person entering into the contract with a contracting agency shall designate a primary contractor for purposes of this section. Before work commences, the primary contractor shall file a notice of work with the Department of Labor and Workforce Development. The notice of work must list work to be performed under the public construction contract by each contractor who will perform any portion of work on the contract and the contract price being paid to each contractor. The primary contractor shall pay all filing fees for each contractor performing work on the contract, including a filing fee based on the contract price being paid for work performed by the primary contractor’s employees. The filing fee payable shall be the sum of all fees calculated for each contractor. The filing fee shall be one percent of each contractor’s contract price. The total filing fee payable by the primary contractor under this subsection may not exceed $5,000. In this subsection, “contractor” means an employer who is using employees to perform work on the public construction contract under the contract or a subcontract.

 (b) Upon completion of all work on the public construction contract, the primary contractor shall file with the Department of Labor and Workforce Development a notice of completion together with payment of any additional filing fees owed due to increased contract amounts. Within 30 days after the department’s receipt of the primary contractor’s notice of completion, the department shall inform the contracting agency of the amount, if any, to be withheld from the final payment.

 (c) A contracting agency
     (1) may release final payment on a public construction contract to the extent that the agency has received verification from the Department of Labor and Workforce Development that
          (A) the primary contractor has complied with (a) and (b) of this section;

          (B) the Department of Labor and Workforce Development is not conducting an investigation under this title; and

          (C) the Department of Labor and Workforce Development has not issued a notice of a violation of this chapter to the primary contractor or any other contractors working on the public construction contract; and

     (2) shall withhold from the final payment an amount sufficient to pay the department’s estimate of what may be needed to compensate the employees of any contractors under investigation on this construction contract, and any unpaid filing fees.

 (d) The notice and filing fee required under (a) of this section may be filed after work has begun if
     (1) the public construction contract is for work undertaken in immediate response to an emergency; and

     (2) the notice and fees are filed not later than 14 days after the work has begun.

 (e) A false statement made on a notice required by this section is punishable under AS 11.56.210.




Sec. 36.05.050. Hours to constitute day’s work. [Repealed, § 1 ch 3 SLA 1973.]
Sec. 36.05.060. Penalty for violation of this chapter.
A contractor who violates this chapter is guilty of a misdemeanor and upon conviction is punishable by a fine of not less than $100 nor more than $1,000, or by imprisonment for not less than 10 days nor more than 90 days, or by both. Each day a violation exists constitutes a separate offense.


Sec. 36.05.070. Wage rates in specifications and contracts for public works.
 (a) The advertised specifications for a public construction contract that requires or involves the employment of mechanics, laborers, or field surveyors must contain a provision stating the minimum wages to be paid various classes of laborers, mechanics, or field surveyors and that the rate of wages shall be adjusted to the wage rate under AS 36.05.010.

 (b) [Repealed, § 17 ch 142 SLA 1972.]
 (c) A public construction contract under (a) of this section must contain provisions that
     (1) the contractor or subcontractors of the contractor shall pay all employees unconditionally and not less than once a week;

     (2) wages may not be less than those stated in the advertised specifications, regardless of the contractual relationship between the contractor or subcontractors and laborers, mechanics, or field surveyors;

     (3) the scale of wages to be paid shall be posted by the contractor in a prominent and easily accessible place at the site of the work;

     (4) the state or a political subdivision shall withhold so much of the accrued payments as is necessary to pay to laborers, mechanics, or field surveyors employed by the contractor or subcontractors the difference between
          (A) the rates of wages required by the contract to be paid laborers, mechanics, or field surveyors on the work; and

          (B) the rates of wages in fact received by laborers, mechanics, or field surveyors.




Sec. 36.05.080. Failure to pay agreed wages.
Every contract within the scope of AS 36.05.070 must contain a provision that if it is found that a laborer, mechanic, or field surveyor employed by the contractor or subcontractor has been or is being paid a rate of wages less than the rate of wages required by the contract to be paid, the state or its political subdivision may, by written notice to the contractor, terminate the contractor’s right to proceed with the work or the part of the work for which there is a failure to pay the required wages and to prosecute the work to completion by contract or otherwise, and the contractor and the contractor’s sureties are liable to the state or its political subdivision for excess costs for completing the work.


Sec. 36.05.090. Payment of wages from withheld payments and listing contractors who violate contracts.
 (a) The state disbursing officer in the case of a state public construction contract and the local fiscal officer in the case of a political subdivision public construction contract shall pay directly to laborers, mechanics, or field surveyors from accrued payments withheld under the terms of the contract the wages due laborers, mechanics, or field surveyors under AS 36.05.070.

 (b) The state disbursing officer or the local fiscal officer shall distribute to all departments of the state government and to all political subdivisions of the state a list giving the names of persons who have disregarded their obligations to employees. A person appearing on this list and a firm, corporation, partnership, or association in which the person has an interest may not work as a contractor or subcontractor on a public construction contract for the state or a political subdivision of the state until three years after the date of publication of the list. If the accrued payments withheld under the contract are insufficient to reimburse all the laborers, mechanics, or field surveyors with respect to whom there has been a failure to pay the wages required under AS 36.05.070, the laborers, mechanics, or field surveyors have the right of action or intervention or both against the contractor and the contractor’s sureties conferred by law upon persons furnishing labor or materials, and in the proceedings it is not a defense that the laborers, mechanics, or field surveyors accepted or agreed to accept less than the required rate of wages or voluntarily made refunds.




Sec. 36.05.100. Effect of AS 36.05.070 — 36.05.110 on other laws.
AS 36.05.070 — 36.05.110 do not supersede or impair authority granted by state law to provide for the establishment of specific wage rates.


Sec. 36.05.110. Contracts entered into without advertising.
The fact that a public construction contract authorized by law is entered into upon a cost-plus-a-fixed-fee basis or otherwise, without advertising for proposals, does not make AS 36.05.070 — 36.05.110 inapplicable if those sections are otherwise applicable to the contract.


Sec. 36.05.120. Regulations governing contractors. [Repealed, § 17 ch 142 SLA 1972.]

Article 2. General Provisions.


Sec. 36.05.900. Definition.
In this chapter, “contracting agency” means the state or a political subdivision of the state that has entered into a public construction contract with a contractor.


Chapter 10. Employment Preference.

Sec. 36.10.005. Legislative findings.
 (a) The legislature finds that
     (1) because of its unique climate and its distance from the contiguous states, the state has historically suffered from unique social, seasonal, geographic, and economic conditions that result in an unstable economy;

     (2) the unstable economy is a hardship on the residents of the state and is aggravated by the large numbers of seasonal and transient nonresident workers;

     (3) the rate of unemployment among residents of the state is one of the highest in the nation;

     (4) the state has one of the highest ratios of nonresident to resident workers in the nation;

     (5) the state has a compelling interest in reducing the level of unemployment among its residents;

     (6) the construction industry in the state accounts for a substantial percentage of the available employment;

     (7) construction workers receive a greater percentage of all unemployment benefits paid by the state than is typical of other states;

     (8) historically, the rate of unemployment in the construction industry in the state is higher than the rate of unemployment in other industries in the state;

     (9) it is appropriate for the state to consider the welfare of its residents when it funds construction activity;

     (10) it is in the public interest for the state to allocate public funds for capital projects in order to reduce unemployment among its resident construction workers;

     (11) the influx of nonresident construction workers contributes to or causes the high unemployment rate among resident construction workers because nonresident workers compete with residents for the limited number of available construction jobs;

     (12) nonresident workers displace a substantial number of qualified, available, and unemployed Alaska workers on jobs on state funded public works projects;

     (13) the state has a special interest in seeing that the benefits of state construction spending accrue to its residents;

     (14) the natural resources of land owned by the state belong to the citizens of the state;

     (15) Alaskans have chosen to use the majority of the royalties derived from the state’s natural resources to fund state government;

     (16) the vast majority of the state’s revenue is derived from natural resource income rather than from other forms of taxation;

     (17) because the state has no personal income tax or sales tax, nonresident workers use services provided by the state but do not contribute fairly to the costs of those services; and

     (18) Alaskans, more than the residents of other states, suffer economically when nonresidents displace qualified residents since resident workers contribute local taxes as well as their share of the royalties from natural resources.

 (b) The legislature further finds that
     (1) the state and its political subdivisions, when acting as a market participant in funding public works projects, should give Alaska residents an employment preference to promote a more stable economy;

     (2) the state and its political subdivisions have a duty of loyalty to their citizens and should fulfill this duty by giving residents preference for employment on public works projects they fund;

     (3) there is a legitimate and compelling governmental interest and that the public health and welfare will suffer if state residents are not afforded employment preference in state-funded construction-related work.

 (c) The legislature finds that the following factors are reasonable but not exclusive indicators of the ratio of nonresident to resident employees in the state:
     (1) the ratio of applicants for unemployment insurance who list out-of-state residences to applicants who list residences in the state;

     (2) the ratio of employees who are subject to unemployment insurance coverage and who did not apply for or were denied a permanent fund dividend to employees who were found eligible for a dividend.

 (d) The legislature finds that
     (1) the number of state residents who are unable to find work is considerably higher than is reflected by unemployment rates based on nationally accepted measures;

     (2) many rural state residents who wish to work do not seek employment as frequently as necessary to meet federal definitions of unemployment because of continuing lack of employment opportunities in rural areas of the state.




Sec. 36.10.006. Statement of purpose. [Repealed, § 16 ch 20 SLA 2002.]
Sec. 36.10.007. State policy.
It is the policy of this state that, to fulfill the duty of loyalty owed to its citizens and to remedy social or economic problems, the state will grant an employment preference to residents when the state is acting as a market participant.


Sec. 36.10.010. Employment preference. [Repealed, § 11 ch 33 SLA 1986.]
Sec. 36.10.020. Apprentices.
Apprentices must be properly registered apprentices in their particular craft.


Sec. 36.10.030. Reduction of work force.
When a work force is reduced, resident workers, except supervisory personnel, shall be terminated last.


Sec. 36.10.040. Application to contracts involving federal funds.
In a contract involving expenditure of federal aid funds, this chapter may not be enforced in a manner that conflicts with federal statutes giving preference to veterans or prohibiting other preferences or discriminations among United States citizens.


Sec. 36.10.050. Employment of aliens. [Repealed, § 17 ch 142 SLA 1972.]
Sec. 36.10.060. Employment of prisoners. [Repealed, § 6 ch 53 SLA 1982.]
Sec. 36.10.070. Unavailability of preferred workers.
 (a) An employer subject to hiring requirements under this chapter may request the Department of Labor and Workforce Development to assist in locating qualified, eligible employees. After receiving a request for assistance, the department shall refer qualified, eligible, available residents to the employer to fill the employer’s hiring needs. The employer shall cooperate with the department.

 (b) If the department is unable to refer a sufficient number of qualified, eligible, available residents able to perform the work, the commissioner of labor and workforce development may approve the hiring of residents who are not eligible for preference and nonresidents for the balance of the request.




Sec. 36.10.075. Regulations.
 (a) The commissioner of labor and workforce development shall adopt regulations necessary to carry out the provisions of this chapter including but not limited to the method, time, and content of reporting by employers covered by this chapter and reporting provisions permitting on-going supervision by the Department of Labor and Workforce Development on all public works projects covered by this chapter.

 (b) The commissioner of labor and workforce development shall adopt regulations to encourage and require the hiring of residents to the maximum extent permitted by law.




Sec. 36.10.076. Notification by state or political subdivision.
An agency or political subdivision of the state covered by the provisions of this chapter shall notify the Department of Labor and Workforce Development periodically regarding planned public works. Notification shall be in the form and manner prescribed by the Department of Labor and Workforce Development.


Sec. 36.10.080. Chapter incorporated in contracts.
The provisions of this chapter are considered to be a part of every public works contract.


Sec. 36.10.090. Publication of list of violators.
 (a) The commissioner of labor and workforce development shall distribute to all departments and agencies of the state government and to all political subdivisions of the state a list of the names of persons or firms convicted of a violation of this chapter. A person appearing on the list or a firm, corporation, partnership, or association in which the person has an interest may not work as a contractor or subcontractor on a public construction contract for the state or a political subdivision until after three years from the date of publication of the list.

 (b) A local government or school district covered by the provisions of this chapter that is found to be in violation of these provisions may be required to forfeit all or part of the state aid made available for the project in which the violation occurs and in addition may be denied up to 12 months of state community assistance or public school funding. A state department or agency head found to be in violation of this chapter may be required to forfeit the position of department or agency head.

 (c) A person or governmental entity covered by the provisions of (b) of this section who is not satisfied by a decision of the Department of Labor and Workforce Development may, as the final administrative process, appeal the decision to a committee consisting of the commissioners of transportation and public facilities, labor, and workforce development, and administration. The commissioner of transportation and public facilities is the chairman of the committee. A quorum for conducting business is three members and any decision made must be supported by a majority of the committee members. The committee may, upon a showing of hardship, waive all or any part of the penalty provisions of this chapter.




Sec. 36.10.100. Retainage and penalty.
 (a) A contractor who violates a provision of this chapter shall have deducted from amounts due to the contractor under the contract the prevailing wages that should have been paid to a displaced resident, and these amounts shall be retained by the contracting agency.

 (b) A contractor or the agent of a contractor who violates a provision of this chapter is guilty of a misdemeanor, and upon conviction is punishable by a fine of not more than $500, or by imprisonment for not more than 90 days, or by both.




Sec. 36.10.110. Definitions. [Repealed, § 17 ch 142 SLA 1972.]
Sec. 36.10.120. Investigations and hearings.
The Department of Labor and Workforce Development may, when necessary to enforce this chapter,
     (1) conduct investigations and hold hearings relating to employment preference;

     (2) compel the attendance of witnesses and the production of books, papers, and documents.




Sec. 36.10.125. Enforcement.
 (a) The attorney general shall, when requested by the Department of Labor and Workforce Development, enforce the provisions of this chapter. The attorney general may obtain a court order prohibiting a contractor or subcontractor violating this chapter from continuing to work on existing public construction contracts of the state or a political subdivision of the state. The state or political subdivision of the state may prosecute the work to completion by contract or otherwise, and the contractor or subcontractor and the sureties of the contractor or subcontractor are liable for excess costs for completing the work.

 (b) A private person is entitled to bring an action in the superior court to enforce the provisions of this chapter if that private person first gives at least 20 days notice to the commissioner of labor and workforce development. The notice must set out
     (1) the intent of the private person to bring an action under this subsection;

     (2) the specific violation complained of; and

     (3) the name of the person accused of the violation.

 (c) In an action brought under (b) of this section, the court may, in its discretion, order denial of state community assistance, revenue sharing, or public school funding, forfeiture of office or position, or injunctive or other relief. If the court finds for the plaintiff in an action brought under (b) of this section, it may award the plaintiff an amount equal to the actual costs and attorney fees incurred by the plaintiff.




Sec. 36.10.130. Resident hire report.
The attorney general and the commissioner of labor and workforce development shall report annually to the governor on the status of employment in the state, the effect of nonresident employment on the employment of residents in the state, and methods to increase resident hire. The report shall be submitted by January 31 of each year, and the governor shall notify the legislature that the report is available.


Sec. 36.10.140. Eligibility for preference; approval of job-training programs; certification.
 (a) A person is eligible for an employment preference under this chapter if the person certifies eligibility as required by the Department of Labor and Workforce Development, is a resident, and
     (1) is receiving unemployment benefits under AS 23.20 or would be eligible to receive benefits but has exhausted them;

     (2) is not working and has registered to find work with a public or private employment agency or a local hiring hall;

     (3) is underemployed or marginally employed as defined by the department; or

     (4) has completed a job-training program approved by the department and is either not employed or is engaged in employment that does not use the skills acquired in the job-training program.

 (b) In approving job-training programs under (a) of this section, the department shall use information and findings from other state and federal agencies as much as possible.

 (c) An employer subject to a resident hiring requirement under this chapter shall certify that persons employed as residents under the preference were eligible for the preference at the time of hiring.

 (d) A labor organization that dispatches members for work on a public works project under a collective bargaining agreement shall certify that persons dispatched as residents to meet a preference were eligible for the preference at the time of dispatch.

 (e) An employer or labor organization may request assistance from the Department of Labor and Workforce Development in verifying the eligibility of an applicant for a hiring preference under this chapter.




Sec. 36.10.150. Determination of zone of underemployment.
 (a) Immediately following a determination by the commissioner of labor and workforce development that a zone of underemployment exists, and for the next two fiscal years after the determination, qualified residents of the zone who are eligible under AS 36.10.140 shall be given preference in hiring for work on each project under AS 36.10.180 that is wholly or partially sited within the zone. The preference applies on a craft-by-craft or occupational basis.

 (b) The commissioner of labor and workforce development shall determine the amount of work that must be performed under this section by qualified residents who are eligible for an employment preference under AS 36.10.140. In making this determination, the commissioner shall consider the nature of the work, the classification of workers, availability of eligible residents, and the willingness of eligible residents to perform the work.

 (c) The commissioner shall determine that a zone of underemployment exists if the commissioner finds that
     (1) the rate of unemployment within the zone is substantially higher than the national rate of unemployment;

     (2) a substantial number of residents in the zone have experience or training in occupations that would be employed on a public works project;

     (3) the lack of employment opportunities in the zone has substantially contributed to serious social or economic problems in the zone; and

     (4) employment of workers who are not residents is a peculiar source of the unemployment of residents of the zone.




Sec. 36.10.160. Preference for residents of economically distressed zones.
 (a) Immediately following a determination by the commissioner that an economically distressed zone exists, and for the next two fiscal years after the determination, qualified residents of the zone who are eligible under AS 36.10.140 shall be given preference in hiring for at least 50 percent of employment on each project under AS 36.10.180 that is wholly or partially sited within the zone. The preference applies on a craft-by-craft or occupational basis.

 (b) The commissioner shall determine that an economically distressed zone exists if the commissioner finds that
     (1) the per capita income of residents of the zone is less than 90 percent of the per capita income of the United States as a whole, or the unemployment rate in the zone exceeds the national rate of unemployment by at least five percentage points;

     (2) the lack of employment opportunities in the zone has substantially contributed to serious social or economic problems in the zone; and

     (3) employment of workers who are not residents is a peculiar source of unemployment of residents of the zone.




Sec. 36.10.170. Preference for economically disadvantaged minority residents.
 (a) Immediately following a determination by the commissioner that the minority residents of a zone are economically disadvantaged, and for the next two fiscal years after the determination, qualified minority residents of the zone who are eligible under AS 36.10.140 shall be given preference in hiring for at least 25 percent, or a percent representative of the civilian minority residents in the zone, whichever is greater, of employment on each project under AS 36.10.180 that is wholly or partially sited within the zone. The preference applies on a craft-by-craft or occupational basis.

 (b) The commissioner shall determine that the minority residents of a zone are economically disadvantaged if the commissioner finds that
     (1) the percentage of civilian minority residents in the zone exceeds the percentage of civilian minority residents in the state;

     (2) either the percent of unemployment of civilian minority residents of the zone is at least two times the percent of unemployment of nonminority residents of the zone or the civilian minority population of the zone has suffered past economic discrimination;

     (3) the economic disadvantage of civilian minority residents of the zone has substantially contributed to serious social or economic problems in the zone; and

     (4) employment of workers who are not residents is a peculiar source of unemployment of civilian minority residents of the zone.

 (c) In this section, a person is considered to be a member of a minority if the person is Hispanic, Asian or Pacific Islander, American Indian or Alaskan Native, or Black as those terms are defined by the Equal Employment Opportunity Commission.




Sec. 36.10.175. Preference for economically disadvantaged female residents.
 (a) Immediately following a determination by the commissioner that the female residents of a zone are economically disadvantaged, and for the next two fiscal years after the determination, qualified female residents of the zone who are eligible under AS 36.10.140 shall be given preference in hiring for at least 25 percent of employment on each project under AS 36.10.180 that is wholly or partially sited within the zone. The preference applies on a craft-by-craft or occupational basis.

 (b) The commissioner shall determine that the female residents of a zone are economically disadvantaged if the commissioner finds that
     (1) either the percent of unemployment of female residents of the zone is at least two times the percent of unemployment of male residents of the zone or the female population of the zone has suffered past economic discrimination;

     (2) the economic disadvantage of female residents of the zone has substantially contributed to serious social or economic problems in the zone; and

     (3) employment of workers who are not residents is a peculiar source of unemployment of female residents of the zone.




Sec. 36.10.180. Projects subject to preference.
 (a) The preferences established in AS 36.10.150 — 36.10.175 apply to work performed
     (1) under a contract for construction, repair, preliminary surveys, engineering studies, consulting, maintenance work, or any other retention of services necessary to complete a given project that is let by the state or an agency of the state, a department, office, state board, commission, public corporation, or other organizational unit of or created under the executive, legislative, or judicial branch of state government, including the University of Alaska and the Alaska Railroad Corporation, or by a political subdivision of the state including a regional school board with respect to an educational facility under AS 14.11.020;

     (2) on a public works project under a grant to a municipality under AS 37.05.315 or AS 37.06.010;

     (3) on a public works project under a grant to a named recipient under AS 37.05.316;

     (4) on a public works project under a grant to an unincorporated community under AS 37.05.317 or AS 37.06.020; and

     (5) on any other public works project or construction project that is funded in whole or in part by state money.

 (b) If the governor has declared an area to be an area impacted by an economic disaster under AS 44.33.285, then the preference for residents of the area established under AS 44.33.285 — 44.33.310 supersedes the preference under AS 36.10.150 — 36.10.175 for contracts awarded by the state.

 (c) The commissioner shall define the boundaries of a zone within which a preference applies.




Sec. 36.10.190. Reporting provisions.
An employer obligated to meet resident hire requirements under this chapter shall comply with the reporting provisions that the commissioner of labor and workforce development determines are reasonably necessary to carry out this chapter. Except for statistical data, all information regarding specific employees is confidential and may not be released by the Department of Labor and Workforce Development. However, confidential employee information may be shared between departments for purposes of this chapter.


Sec. 36.10.200. Criminal penalties.
 (a) A person who makes a false sworn statement in connection with a certification of eligibility for an employment preference under this chapter is subject to criminal prosecution for perjury as provided in AS 11.56.200.

 (b) A person who makes an unsworn falsification, with the intent to mislead a public servant in the performance of a duty, in connection with a certification of eligibility for an employment preference under this chapter, is subject to criminal prosecution as provided in AS 11.56.210.




Sec. 36.10.210. Civil penalties.
 (a) In addition to any criminal penalties imposed, after a hearing the department may impose a civil penalty on a person who, in connection with certification of eligibility for an employment preference under this chapter,
     (1) made a false sworn statement; or

     (2) made an unsworn falsification with intent to mislead a public servant in the performance of a duty.

 (b) The amount of the civil penalty under (a) of this section for a person who falsely certifies that the person is eligible for an employment preference under this chapter is not more than $400 for each false certification.

 (c) The amount of the civil penalty under (a) of this section for an employer who falsely certifies that employees are residents eligible for a preference under this chapter is not more than $2,000 for each of the first five false certifications. The penalty for the sixth false certification made by an employer and for each false certification thereafter is at least $2,000 and not more than $4,000.




Sec. 36.10.900. Severability.
If a provision of this chapter, or the application of a provision to a person or circumstance, is held invalid, the remainder of this chapter and the application to other persons or circumstances shall not be affected by the holding. The remainder shall be enforced to the greatest extent constitutionally permissible under the constitutions of the United States and the State of Alaska.


Sec. 36.10.990. Definitions.
In this chapter,
     (1) “qualified” means possesses the requisite education, training, skills, or experience to perform the work;

     (2) “zone” includes a census area in the state, an economic region of the state, and the state as a whole.




Article 1. Forest Products Preference.


Chapter 15. Alaska Product Preferences.

Sec. 36.15.010. Use of local forest products required in projects financed by public money.
In a project financed by state money in which the use of timber, lumber, and manufactured lumber products is required, only timber, lumber, and manufactured lumber products originating in this state from local forests shall be used wherever practicable.


Sec. 36.15.020. Insertion of clause in calls for bids and in contracts.
A clause containing the substance of AS 36.15.010 shall be inserted in all calls for bids and in all contracts awarded.


Article 2. Agricultural and Fisheries Products Preference.


Sec. 36.15.050. Use of local agricultural and fisheries products required in purchases with state money.
 (a) When agricultural products are purchased by the state or by a school district that receives state money, a seven percent preference shall be applied to the price of the products harvested in the state.

 (b) When fisheries products are purchased by the state or by a school district that receives state money, a seven percent preference shall be applied to the price of the products harvested or processed within the jurisdiction of the state.

 (c) A solicitation for the purchase of agricultural or fisheries products shall specify the requirement that products harvested in the state shall be used where possible. If the state or a school district that receives state money purchases agricultural or fisheries products harvested outside the state, the officer responsible for the purchase shall certify in writing the reasons that products harvested in the state were not purchased.

 (d) If a contractor fails to comply with this section, the purchasing agency shall withhold payment until the contractor complies. If a school district fails to comply with this section, the department responsible for disbursing state money to the school district shall withhold the money until the school district complies.

 (e) An interested party, as defined in AS 36.30.699, may seek administrative or judicial review of the award of a contract in violation of this section.

 (f) Compliance with this section is not required if an exception to this section is mandated for participation in a federal program.

 (g) A bidder receiving a preference under this section may not receive a preference under AS 36.30.322.

 (h) In this section,
     (1) “agricultural products” includes dairy products, timber and lumber, and products manufactured in the state from timber and lumber;

     (2) “school district” includes a regional educational attendance area established under AS 14.08;

     (3) “state money” includes state reimbursement to school districts for school or related construction, foundation funding for education, municipal assistance, community assistance, revenue sharing, and state funds for capital projects.




Sec. 36.15.060. Insertion of clause in calls for bids and in contracts.
A clause containing the substance of the relevant subsection of AS 36.15.050 shall be inserted in all calls for bids and in all contracts awarded that involve agricultural or fisheries products.


Chapter 20. Purchases and Supplies.

[Repealed, § 67 ch 106 SLA 1986.]

Chapter 25. Contractors’ Bonds.

Sec. 36.25.010. Bonds of contractors for public buildings or works.
 (a) Except as provided in AS 44.33.300, before a contract exceeding $100,000 for the construction, alteration, or repair of a public building or public work of the state or a political subdivision of the state is awarded to a general or specialty contractor, the contractor shall furnish to the state or a political subdivision of the state the following bonds, which become binding upon the award of the contract to that contractor:
     (1) a performance bond with a corporate surety qualified to do business in the state, or at least two individual sureties who shall each justify in a sum equal to the amount of the bond; the amount of the performance bond shall be equivalent to the amount of the payment bond;

     (2) a payment bond with a corporate surety qualified to do business in the state, or at least two individual sureties who shall each justify in a sum equal to the amount of the bond for the protection of all persons who supply labor and material in the prosecution of the work provided for in the contract; when the total amount payable by the terms of the contract is not more than $1,000,000, the payment bond shall be in a sum of one-half the total amount payable by the terms of the contract; when the total amount payable by the terms of the contract is more than $1,000,000 and not more than $5,000,000, the payment bond shall be in a sum of 40 percent of the total amount payable by the terms of the contract; when the total amount payable by the terms of the contract is more than $5,000,000, the payment bond shall be in the sum of $2,500,000.

 (b) This section does not limit the authority of a contracting officer to require a performance bond or other security in addition to those, or in cases other than the cases specified in (a) of this section.

 (c) When no payment bond has been furnished, the contracting department may not approve final payments to the contractor until the contractor files a written certification that all persons who supplied labor or material in the prosecution of the work provided for in the contract have been paid.




Sec. 36.25.020. Rights of persons furnishing labor or material.
 (a) A person who furnishes labor or material in the prosecution of the work provided for in the contract for which a payment bond is furnished under AS 36.25.010 and who is not paid in full before the expiration of 90 days after the last day on which the labor is performed or material is furnished for which the claim is made, may sue on the payment bond for the amount unpaid at the time of the suit.

 (b) However, a person having direct contractual relationships with a subcontractor but no contractual relationship express or implied with the contractor furnishing the payment bond has a right of action on the payment bond upon giving written notice to the contractor within 90 days from the last date on which the person performed labor or furnished material for which the claim is made. The notice must state with substantial accuracy the amount claimed and the name of the person to whom the material was furnished or for whom the labor was performed. The notice shall be served by mailing it by registered mail, postage prepaid, in an envelope addressed to the contractor at any place where the contractor maintains an office or conducts business, or the contractor’s residence, or in any manner in which a peace officer is authorized to serve summons.

 (c) A suit brought under this section shall be brought in the name of the state or the political subdivision of the state for the use of the person suing in the court with jurisdiction. A suit under this section is subject to AS 08.18.151. A suit may not be started after the expiration of one year after the date of final settlement of the contract. The state or political subdivision of the state is not liable for costs or expenses of the suit.




Sec. 36.25.025. Optional municipal exemption.
A municipality, by ordinance adopted by its governing body, may exempt contractors from compliance with the provisions of AS 36.25.010(a) if the estimated cost of the project does not exceed $400,000, and
     (1) the contractor is, and for two years immediately preceding the award of the contract has been, a licensed contractor having its principal office in the state;

     (2) the contractor certifies that it has not defaulted on a contract awarded to the contractor during the period of three years preceding the award of a contract for which a bid is submitted;

     (3) the contractor submits a financial statement, prepared within a period of nine months preceding the submission of a bid for the contract and certified by a public accountant or a certified public accountant licensed under AS 08.04, demonstrating that the contractor has a net worth of not less than 20 percent of the amount of the contract for which a bid is submitted; and

     (4) the total amount of all contracts that the contractor anticipates performing during the term of performance of the contract for which a bid is submitted does not exceed the net worth of the contractor reported in the certified financial statement prepared and submitted under (3) of this section by more than seven times.




Article 1. Organization of State Procurement.


Chapter 30. State Procurement Code.

Sec. 36.30.005. Centralization of procurement authority.
 (a) Except as otherwise provided, all rights, powers, duties, and authority relating to the procurement of supplies, services, and professional services, and the control over supplies, services, and professional services vested in or exercised by an agency on January 1, 1988, are transferred to the commissioner of administration and to the chief procurement officer. Authority granted under this subsection shall be exercised in accordance with this chapter.

 (b) Except as otherwise provided, all rights, powers, duties, and authority relating to the procurement of construction and procurements of equipment or services for the state equipment fleet and the control over construction of state facilities and the state equipment fleet vested in or exercised by an agency on January 1, 1988, are transferred to the commissioner of transportation and public facilities, subject to regulations adopted by the commissioner of administration. Notwithstanding AS 44.68.110, authority relating to disposals from the state equipment fleet is vested in the commissioner of transportation and public facilities, subject to regulations adopted by the commissioner of administration. Authority granted under this subsection shall be exercised in accordance with this chapter.

 (c) Notwithstanding other provisions of law, all rights, powers, duties, and authority relating to the procurement of supplies, services, professional services, and construction and the disposal of supplies for the University of Alaska are transferred to the Board of Regents. To the maximum extent possible, authority granted under this subsection shall be exercised in accordance with this chapter. The Board of Regents shall adopt regulations under this subsection that are substantially equivalent to the regulations adopted by the commissioner of administration to implement this chapter. For the purposes of this subsection, unless the context otherwise requires, in this chapter
     (1) “agency” means a subunit of the University of Alaska;

     (2) “attorney general” means the president of the University of Alaska;

     (3) “chief procurement officer” means a person designated by the president of the University of Alaska whose qualifications are substantially equivalent to those provided in AS 36.30.010(a);

     (4) “commissioner,” “commissioner of administration,” or “commissioner of transportation and public facilities” means the Board of Regents or the president of the University of Alaska if so designated by the Board of Regents by regulations adopted under this subsection; and

     (5) “department” means the University of Alaska.

 (d) Notwithstanding the provisions of AS 36.30.627, the University of Alaska is not required to arbitrate construction contract claims unless the university specifically agrees to the arbitration.




Sec. 36.30.010. Chief procurement officer.
 (a) The commissioner shall appoint to the partially exempt service the chief procurement officer of the state. The chief procurement officer must have at least five years of prior experience in public procurement, including large scale procurement of supplies, services, or professional services, and must be a person with demonstrated executive and organizational ability. The chief procurement officer may be removed by the commissioner only for cause. The term of office of the chief procurement officer is six years.

 (b) Except as otherwise specifically provided in this chapter, the chief procurement officer shall
     (1) procure or supervise the procurement of all supplies, services, and professional services needed by an agency;

     (2) exercise general supervision and control over all inventories of supplies belonging to an agency and prescribe the manner in which supplies shall be purchased, delivered, stored, and distributed;

     (3) prescribe the time, manner, authentication, and form of making requisitions for supplies and services;

     (4) sell, trade, transfer between agencies, or otherwise dispose of surplus, obsolete, or unused supplies and make proper adjustments in the accounts of agencies concerned;

     (5) establish and maintain programs for the inspection, testing, and acceptance of supplies and services and the testing of samples submitted with bids;

     (6) prescribe standard forms for bids and contracts; and

     (7) provide for other matters that may be necessary to carry out the provisions of this chapter and the regulations adopted under this chapter.

 (c) While a person performs the duties of the chief procurement officer under this chapter, the person may not be employed in or appointed to another position with the state.

 (d) The annual salary of the chief procurement officer is range 25 of the salary schedule established in AS 39.27.011.




Sec. 36.30.015. Executive branch agencies.
 (a) The commissioner of transportation and public facilities may delegate to another agency the authority to contract for construction. Before delegating authority to an agency under this subsection, the commissioner of transportation and public facilities shall make a written determination that the agency is capable of implementing the delegated authority. Notwithstanding delegation of authority under this subsection, contracts for construction are governed by this chapter and regulations adopted by the commissioner of administration under this chapter.

 (b) The commissioner of administration may delegate to an agency the authority to contract for and manage services, professional services, and supplies. Notwithstanding delegation of authority under this subsection, an agency’s exercise of the authority is governed by this chapter and regulations adopted by the commissioner under this chapter. Before delegating authority to an agency under this subsection, the commissioner shall make a written determination that the agency is capable of implementing the delegated authority.

 (c) [Repealed, § 48 ch 137 SLA 1996.]
 (d) An agency may not contract for the services of legal counsel without the approval of the attorney general. An agency may not contract for the services of a hearing officer or administrative law judge for an administrative, quasi-judicial hearing without the approval of the attorney general and the chief administrative law judge of the office of administrative hearings (AS 44.64.010).

 (e) The board of directors of the Alaska Railroad Corporation and the board of directors of the Alaska Aerospace Corporation shall adopt procedures to govern the procurement of supplies, services, professional services, and construction. The procedures must be substantially equivalent to the procedures prescribed in this chapter and in regulations adopted under this chapter. Notwithstanding the other provisions of this subsection, the Alaska Railroad Corporation and the Alaska Aerospace Corporation shall comply with the five percent preference under AS 36.30.321(a), and, when the Department of Transportation and Public Facilities authorizes the Alaska Railroad Corporation to perform construction work instead of the Department of Transportation and Public Facilities, the Alaska Railroad Corporation shall use competitive sealed bidding or competitive sealed proposals under AS 36.30.100 — 36.30.270 to procure the supplies, services, professional services, and construction services necessary for the work and, to ensure the state obtains the lowest cost for the project, may submit a bid or proposal for the work.

 (f) The board of directors of the Alaska Housing Finance Corporation, notwithstanding AS 18.56.088, the membership of the Alaska Industrial Development and Export Authority, notwithstanding AS 44.88.085, and the board of directors of the Knik Arm Bridge and Toll Authority under AS 19.75.111, shall adopt regulations under AS 44.62 (Administrative Procedure Act), and the board of trustees of the Alaska Retirement Management Board shall adopt regulations under AS 37.10.240, to govern the procurement of supplies, services, professional services, and construction for the respective public corporation and board. The regulations must reflect competitive bidding principles and provide vendors reasonable and equitable opportunities to participate in the procurement process and must include procurement methods to meet emergency and extraordinary circumstances. Notwithstanding the other provisions of this subsection, the Alaska Housing Finance Corporation, the Alaska Industrial Development and Export Authority, the Knik Arm Bridge and Toll Authority, and the Alaska Retirement Management Board shall comply with the five percent preference under AS 36.30.321(a).

 (g) The Department of Transportation and Public Facilities shall adopt regulations to manage the procurement of supplies, services, professional services, and construction for the repair, maintenance, and reconstruction of vessels, docking facilities, and passenger and vehicle transfer facilities of the Alaska marine highway system. The regulations must be based on principles of competitive procurement consistent with this chapter to satisfy the special requirements of the Alaska marine highway system as determined by the Department of Transportation and Public Facilities.

 (h) The board of directors of the Alaska Seafood Marketing Institute shall adopt procedures to govern the procurement of supplies, services, and professional services. The procedures must be similar to the procedures prescribed in this chapter and in regulations adopted under this chapter, except that the Alaska Seafood Marketing Institute shall comply with the five percent preference under AS 36.30.321(a).

 (i) Notwithstanding (e) of this section and the authority to delegate under (a) of this section, the Alaska Railroad Corporation, rather than the Department of Transportation and Public Facilities, shall perform signalization and flagging work, may perform the signalization and flagging work by itself or by using contractors, and, if it decides to use contractors for the work, it shall obtain the contractors by using its procurement procedures adopted under (e) of this section.

 (j) Notwithstanding the other provisions of this chapter, when a project of the Department of Transportation and Public Facilities includes construction of rails, ties, or ballast for railroad tracks used by the Alaska Railroad Corporation, the Department of Transportation and Public Facilities may enter into an agreement with the Alaska Railroad Corporation for the Alaska Railroad Corporation to perform the work, and the Alaska Railroad Corporation may perform the work itself without procuring a contractor to provide the supplies, services, professional services, or construction services necessary for the work.

 (k) Notwithstanding (d) of this section, the Public Defender Agency and the office of public advocacy are not required to obtain the approval of the attorney general to contract for the services of legal counsel in a matter where the attorney general is an adverse party.




Sec. 36.30.020. Legislature.
The legislative council shall adopt and publish procedures to govern the procurement of supplies, services, professional services, and construction by the legislative branch. The procedures must be based on the competitive principles consistent with this chapter and must be adapted to the special needs of the legislative branch as determined by the legislative council. The procedures must contain provisions for prohibiting procurement from a person that has headquarters in a country listed in Tier 3 of the most recent Trafficking in Persons Report published by the United States Secretary of State under 22 U.S.C. 7107(b)(1)(C). The procedures may contain provisions for restricting procurement from a person that conducts business in but does not have headquarters in a country listed in Tier 3 of the most recent Trafficking in Persons Report published by the United States Secretary of State under 22 U.S.C. 7107(b)(1)(C). The procedures must be consistent with the provisions of AS 36.30.080(c) — (e) and 36.30.085. Notwithstanding the other provisions of this section, the legislative agencies subject to the legislative council’s regulations shall comply with the five percent preference under AS 36.30.321(a).


Sec. 36.30.030. Court system.
The administrative director of the Alaska Court System shall adopt and publish procedures to govern the procurement of supplies, services, professional services, and construction by the judicial branch. The procedures must be based on the competitive principles consistent with this chapter and must be adapted to the special needs of the judicial branch as determined by the administrative director of the Alaska Court System. The procedures must contain provisions for prohibiting procurement from a person that has headquarters in a country listed in Tier 3 of the most recent Trafficking in Persons Report published by the United States Secretary of State under 22 U.S.C. 7107(b)(1)(C). The procedures may contain provisions for restricting procurement from a person that conducts business in but does not have headquarters in a country listed in Tier 3 of the most recent Trafficking in Persons Report published by the United States Secretary of State under 22 U.S.C. 7107(b)(1)(C). The procedures must be consistent with the provisions of AS 36.30.080(c) — (e) and 36.30.085. Notwithstanding the other provisions of this section, the judicial branch shall comply with the five percent preference under AS 36.30.321(a).


Sec. 36.30.040. Procurement regulations.
 (a) The commissioner shall adopt regulations governing the procurement, management, and control of supplies, services, professional services, and construction by agencies. The regulations must contain provisions for prohibiting procurement from a person that has headquarters in a country listed in Tier 3 of the most recent Trafficking in Persons Report published by the United States Secretary of State under 22 U.S.C. 7107(b)(1)(C). The regulations may contain provisions for restricting procurement from a person that conducts business in but does not have headquarters in a country listed in Tier 3 of the most recent Trafficking in Persons Report published by the United States Secretary of State under 22 U.S.C. 7107(b)(1)(C). The commissioner may audit and monitor the implementation of the regulations and the requirements of this chapter with respect to using agencies.

 (b) The commissioner shall adopt regulations pertaining to
     (1) suspension, debarment, and reinstatement of prospective bidders and contractors;

     (2) bid protests;

     (3) conditions and procedures for the procurement of perishables and items for resale;

     (4) conditions and procedures for the use of source selection methods authorized by this chapter, including single source procurements, emergency procurements, and small procurements;

     (5) the opening or rejection of bids and offers, and waiver of informalities in bids and offers;

     (6) confidentiality of technical data and trade secrets submitted by actual or prospective bidders or offerors;

     (7) partial, progressive, and multiple awards;

     (8) storerooms and inventories, including determination of appropriate stock levels and the management of agency supplies;

     (9) transfer, sale, or other disposal of supplies;

     (10) definitions and classes of contractual services and procedures for acquiring them;

     (11) providing for conducting price analysis;

     (12) use of payment and performance bonds in connection with contracts for supplies, services, and construction;

     (13) guidelines for use of cost principles in negotiations, adjustments, and settlements;

     (14) conditions under which an agency may use the services of an employment program;

     (15) a bidder’s or offeror’s duties under this chapter; and

     (16) the elimination and prevention of discrimination in state contracting because of race, religion, color, national origin, sex, age, marital status, pregnancy, parenthood, disability, or political affiliation.




Sec. 36.30.050. Lists of contractors. [Repealed, § 26 ch 59 SLA 2013.]
Sec. 36.30.060. Specifications.
 (a) The commissioner shall adopt regulations governing the preparation, revision, and content of specifications for supplies, services, professional services, and construction required by an agency. The commissioner shall monitor the use of these specifications.

 (b) Specifications for construction of highways must conform as closely as practicable to those adopted by the American Association of State Highway and Transportation Officials.

 (c) The commissioner may obtain expert advice and assistance from personnel of using agencies in the development of specifications. Specifications must promote overall economy for the purposes intended and encourage competition in satisfying the state’s needs, and may not be unduly restrictive. The requirements of this subsection regarding the purposes and nonrestrictiveness of specifications apply to all specifications, including those prepared by architects, engineers, designers, and other professionals.

 (d) In this section, “specification” means a description of the physical or functional characteristics, or of the nature of a supply, service, professional service, or construction project; it may include requirements for licensing, inspecting, testing, and delivery.




Sec. 36.30.070. Supply management.
The commissioner shall adopt regulations governing the
     (1) management of supplies during their entire life cycle;

     (2) sale, lease, or disposal of surplus supplies by public auction, competitive sealed bidding, or other appropriate method;

     (3) purchase of surplus supplies by an employee of the using or disposing agency; and

     (4) transfer of excess supplies.




Sec. 36.30.080. Leases.
 (a) The department shall lease space for the use of the state or an agency wherever it is necessary and feasible, subject to compliance with the requirements of this chapter. A lease may not provide for a period of occupancy greater than 40 years. An agency requiring office, warehouse, or other space shall lease the space through the department.

 (b) [Repealed, § 11 ch 75 SLA 1994.]
 (c) If the department, the Board of Regents of the University of Alaska, the legislative council, or the supreme court intends to enter into or renew a lease of real property with an annual rent to the department, University of Alaska, legislative council, or supreme court that is anticipated to exceed $500,000, or with total lease payments that exceed $2,500,000 for the full term of the lease, including any renewal options that are defined in the lease, the department, the Board of Regents, the legislative council, or supreme court shall provide notice to the legislature. The notice must include the anticipated annual lease obligation amount and the total lease payments for the full term of the lease. The department, the Board of Regents, the legislative council, and the supreme court may not enter into or renew a lease of real property
     (1) requiring notice under this subsection unless the proposed lease or renewal of a lease has been approved by the legislature by law; an appropriation for the rent payable during the initial period of the lease or the initial period of lease renewal constitutes approval of the proposed lease or renewal of a lease for purposes of this paragraph;

     (2) under this subsection if the total of all optional renewal periods provided for in the lease exceeds the original term of the lease exclusive of the total period of all renewal options.

 (d) When the department is evaluating proposals for a lease of space, the department shall consider, in addition to lease costs, the life cycle costs, function, indoor environment, public convenience, planning, design, appearance, and location of the proposed building.

 (e) When the department is considering leasing space, the department should consider whether leasing is likely to be the least costly means to provide the space.

 (f) When the department is acquiring leased space of 7,000 square feet or less, the department may procure the leased space using the procedures for small procurements under AS 36.30.320, providing public notice is given to prospective offerors in the market area.




Sec. 36.30.083. Lease extensions authorized.
 (a) Notwithstanding any other provision of this chapter, the department, the Board of Regents of the University of Alaska, the legislative council, or the court system may extend a real property lease that is entered into under this chapter for up to 10 years if a minimum cost savings of at least 10 percent below the market rental value of the real property at the time of the extension would be achieved on the rent due under the lease. The market rental value must be established by a real estate broker’s opinion of the rental value or by an appraisal of the rental value.

 (b) The department, the University of Alaska, the court system, and the Legislative Affairs Agency shall submit individually an annual report to the Legislative Budget and Audit Committee detailing the leases extended and the cost savings achieved by that entity under (a) of this section. The reports are due August 31 of each year.




Sec. 36.30.085. Lease-purchase agreements.
 (a) To perform its duties and statutory functions, the department, the Board of Regents of the University of Alaska, the legislative council, or the supreme court may enter into lease-purchase agreements for real property. The department, the Board of Regents, the legislative council, or the supreme court may enter into a lease-purchase agreement only if the department, the Board of Regents, the legislative council, or the supreme court is the lessee under the agreement.

 (b) When evaluating proposals to acquire or improve real property under a lease-purchase agreement, the department, the Board of Regents, the legislative council, or the supreme court shall consider
     (1) in addition to lease costs, the life cycle costs, function, indoor environment, public convenience, planning, design, appearance, and location of the real property proposed for acquisition or improvement; and

     (2) whether acquisition or improvement of the real property by lease-purchase agreement is likely to be the least costly means to provide the space.

 (c) A lease-purchase agreement
     (1) may not provide for a period of occupancy under the full term of the lease-purchase agreement that is greater than 40 years;

     (2) must provide that lease payments made by the department, the Board of Regents, the legislative council, or the supreme court are subject to annual appropriation.

 (d) If the department, Board of Regents, legislative council, or supreme court intends to enter into or renew a lease-purchase agreement for real property, the department, Board of Regents, legislative council, or supreme court shall provide notice to the legislature. The notice must include the
     (1) anticipated total construction, acquisition, or other costs of the project;

     (2) anticipated annual amount of the rental obligation; and

     (3) total lease payments for the full term of the lease-purchase agreement.

 (e) The department, the Board of Regents, the legislative council, or the supreme court may not enter into a lease-purchase agreement to acquire or improve real property unless the agreement has been approved by the legislature by law.

 (f) The provisions of (d) and (e) of this section do not apply to a lease-purchase agreement
     (1) related to the refinancing of an outstanding balance owing on an existing lease-purchase agreement; or

     (2) by the University of Alaska if the lease-purchase agreement is secured by student fees or university receipts as defined in AS 14.40.491.

 (g) In this section,
     (1) “full term of the lease-purchase agreement” includes all renewal options that are defined within the lease-purchase agreement;

     (2) “lease-purchase agreement” includes a lease-financing agreement.




Sec. 36.30.086. Lease-purchase of personal property.
 (a) To perform its duties and statutory functions, an agency, the Board of Regents of the University of Alaska, the legislative council, the Legislative Budget and Audit Committee, the office of victims’ rights, the office of the ombudsman, or the supreme court may enter into lease-purchase agreements for the acquisition of equipment or other personal property. The government entity is the lessee under the agreement.

 (b) If a government entity enters into a lease-purchase agreement under (a) of this section that exceeds $100,000 in payments by the state, the government entity shall provide notice to the presiding officers and finance committee chairs of the house and senate. The notice must describe the property that is the subject of the agreement and must set out the terms of the lease-purchase.




Sec. 36.30.090. Delivery of supplies. [Repealed, § 48 ch 137 SLA 1996.]
Sec. 36.30.095. Procurement of paper. [Repealed, § 48 ch 137 SLA 1996.]

Article 2. Competitive Sealed Bidding.


Sec. 36.30.100. General policy.
 (a) Except as otherwise provided in this chapter, or unless specifically exempted by law, an agency contract shall be awarded by competitive sealed bidding.

 (b) [Repealed, § 48 ch 137 SLA 1996.]
 (c) [Repealed, § 20 ch 102 SLA 1989.]




Sec. 36.30.110. Invitation to bid.
 (a) When competitive sealed bidding is used, the procurement officer shall issue an invitation to bid. It must include a time, place, and date by which the bid must be received, purchase description, and a description of all contractual terms and conditions applicable to the procurement.

 (b) The bidder shall have a valid Alaska business license at the time the contract is awarded. To qualify as an Alaska bidder under AS 36.30.321, a bidder shall have a valid Alaska business license at the time designated in the invitation to bid for bid opening. A bidder for a construction contract shall also submit proof of the bidder’s registration under AS 08.18 before the contract may be awarded.

 (c) If the commissioner of transportation and public facilities makes a written finding that the release of the estimated cost of a construction contract would adversely affect the state’s ability to obtain the best competitive bid, the estimated cost is confidential information and may not be released to the public before bid opening.




Sec. 36.30.115. Subcontractors for construction contracts.
 (a) Within five working days after the identification of the apparent low bidder for a construction contract, the apparent low bidder shall submit a list of the subcontractors the bidder proposes to use in the performance of the construction contract. The list must include the name and location of the place of business for each subcontractor, evidence of each subcontractor’s valid Alaska business license, and evidence of each subcontractor’s registration as a contractor under AS 08.18. If a subcontractor on the list did not have a valid Alaska business license and a valid certificate of registration as a contractor under AS 08.18 at the time the bid was opened, the bidder may not use the subcontractor in the performance of the contract, and shall replace the subcontractor with a subcontractor who had a valid Alaska business license and a valid certificate of registration as a contractor under AS 08.18 at the time the bid was opened.

 (b) A construction contractor or the apparent low bidder for a construction contract may replace a listed subcontractor if the subcontractor
     (1) fails to comply with AS 08.18;

     (2) files for bankruptcy or becomes insolvent;

     (3) fails to execute a contract with the construction contractor or bidder involving performance of the work for which the subcontractor was listed and the construction contractor or bidder acted in good faith;

     (4) fails to obtain bonding;

     (5) fails to obtain insurance acceptable to the state;

     (6) fails to perform the contract with the construction contractor or bidder involving work for which the subcontractor was listed;

     (7) must be substituted in order for the contractor to satisfy required state and federal affirmative action requirements;

     (8) refuses to agree or abide with the labor agreement of the construction contractor or bidder; or

     (9) is determined by the procurement officer not to be a responsible subcontractor.

 (c) If a bidder for a construction contract fails to list a subcontractor or lists more than one subcontractor for the same portion of work and the value of that work is in excess of half of one percent of the total bid, the bidder shall be considered to have agreed to perform that portion of work without the use of a subcontractor and to have represented the bidder to be qualified to perform that work.

 (d) A bidder for a construction contract who attempts to circumvent the requirements of this section by listing as a subcontractor another contractor who, in turn, sublets the majority of the work required under the contract violates this section.

 (e) If a construction contract is awarded to a bidder who violates this section, the procurement officer may
     (1) cancel the contract; or

     (2) after notice and a hearing, assess a penalty on the bidder in an amount that does not exceed 10 percent of the value of the subcontract at issue.

 (f) In addition to the circumstances described in (b) of this section, a construction contractor may request permission from the procurement officer to add or replace a listed subcontractor. The request must be in writing, specifically detailing the basis for the request, and include appropriate supporting documentation. The procurement officer shall approve the request if the procurement officer determines in writing that the requested addition or replacement is in the best interest of the state.

 (g) The requirements of this section do not apply to a design-build construction contract.

 (h) In this section, “construction contractor” means a person who enters into a construction contract with an agency.




Sec. 36.30.120. Bid security.
 (a) Bid security shall be required for all competitive sealed bidding for construction contracts when the price is estimated by the procurement officer to exceed an amount established by regulation of the commissioner. Bid security on construction contracts under the amount set by the commissioner may be required when the circumstances warrant. Bid security may be required for competitive sealed bidding for contracts for supplies, services, or professional services in accordance with regulations of the commissioner when needed for the protection of the state.

 (b) Bid security must be a bond provided by a surety company authorized to do business in the state or otherwise supplied in a form satisfactory to the commissioner. Bid security must be in an amount equal to at least five percent of the amount of the bid.

 (c) When the invitation to bid requires security, the procurement officer shall reject a bid that does not comply with the bid security requirement unless, in accordance with regulations, the officer determines that the bid fails to comply in a nonsubstantial manner with the security requirements.




Sec. 36.30.130. Public notice of invitation to bid.
 (a) The procurement officer shall give adequate public notice of the invitation to bid at least 21 days before the date for the opening of bids. If the procurement officer determines in writing that a shorter notice period is advantageous for a particular bid and adequate competition is anticipated, the 21-day period may be shortened. Notice shall be posted on the Alaska Online Public Notice System (AS 44.62.175). The time and manner of notice must be in accordance with regulations adopted by the commissioner of administration. When practicable, notice may include
     (1) publication in a newspaper calculated to reach prospective bidders; and

     (2) notices posted in public places within the area where the work is to be performed or the material furnished.

 (b) Failure to comply with the notice requirements of this section does not invalidate a bid or the award of a contract. If the state fails to substantially comply with the requirements of (a) of this section, the state is liable for damages caused by that failure.




Sec. 36.30.140. Bid opening.
 (a) The procurement officer shall open bids at the time and place designated in the invitation to bid. All bid openings are open to the public. The amount of each bid and other relevant information that is specified by regulation of the commissioner, together with the name of each bidder, shall be recorded.

 (b) The information recorded under (a) of this section is open to public inspection as soon as practicable before the notice of intent to award a contract is given under AS 36.30.365. The bids are not open for public inspection until after the notice of intent to award a contract is given. To the extent the bidder designates and the procurement officer concurs, trade secrets and other proprietary data contained in a bid document are confidential.




Sec. 36.30.150. Bid acceptance and bid evaluation.
 (a) Bids shall be unconditionally accepted without alteration or correction, except as authorized in AS 36.30.160. The procurement officer shall evaluate bids based on the requirements set out in the invitation to bid, which may include criteria to determine acceptability such as inspection, testing, quality, delivery, and suitability for a particular purpose. The criteria that will affect the bid price and be considered in evaluation for award must be objectively measurable, such as discounts, transportation costs, and total or life cycle costs. The invitation to bid must set out the evaluation criteria to be used. Criteria may not be used in bid evaluation if they are not set out in the invitation to bid.

 (b) [Repealed, § 11 ch 37 SLA 1993.]




Sec. 36.30.160. Late bids; correction or withdrawal of bids; cancellation of awards.
 (a) Bids received after the bid due date and time indicated on the invitation to bid may not be accepted unless the delay was due to an error of the contracting agency.

 (b) Correction or withdrawal of inadvertently erroneous bids before or after bid opening, or cancellation of awards or contracts based on bid mistakes may be permitted in accordance with regulations adopted by the commissioner. After bid opening, changes in bid prices or other provisions of bids prejudicial to the interest of the state or fair competition may not be permitted. Except as otherwise provided by regulation, a decision to permit the correction or withdrawal of a bid, or to cancel an award or contract based on bid mistake, shall be supported by a written determination made by the procurement officer. If a bidder is permitted to withdraw a bid before award, an action may not be maintained against the bidder or the bid security.




Sec. 36.30.170. Contract award after bids.
After applying any preferences that apply under AS 36.15.050 and AS 36.30.321 — 36.30.338, a procurement officer shall award a contract based on the solicited bids with reasonable promptness by written notice to the lowest responsible and responsive bidder whose bid conforms in all material respects to the requirements and criteria set out in the invitation to bid.


Sec. 36.30.175. Alaska veterans’ preference. [Repealed, § 26 ch 59 SLA 2013. For current law, see AS 36.30.321.]
Sec. 36.30.180. Purpose.
The legislature finds that there exists in the state continuing high unemployment, underutilization of resident construction and supply firms, and high costs unfavorable to the welfare of Alaskans and to the economic health of the state. The purpose of bidder preference for resident firms when the state acts as a market participant is to encourage local industry, strengthen and stabilize the economy, decrease unemployment, and strengthen the tax and revenue base of the state.


Sec. 36.30.190. Multi-step sealed bidding.
When it is considered impractical to initially prepare a definitive purchase description to support an award based on price, the procurement officer may issue an invitation to bid requesting the submission of unpriced technical offers to be followed by an invitation to bid limited to the bidders whose offers are determined to be technically qualified under the criteria set out in the first solicitation.


Article 3. Competitive Sealed Proposals.


Sec. 36.30.200. Conditions for use.
 (a) Except as otherwise provided in this chapter, or unless specifically exempted by law, an agency contract shall be awarded by competitive sealed proposals if it is not awarded by competitive sealed bidding.

 (b) The commissioner may provide by regulation that it is either not practicable or not advantageous to the state to procure specified types of supplies, services, or construction by competitive sealed bidding that would otherwise be procured by that method. When the procurement officer determines in writing with particularity that the use of competitive sealed proposals is more advantageous to the state than competitive sealed bidding, a contract may be entered into by competitive sealed proposals.

 (c) When the commissioner of transportation and public facilities determines that it is advantageous to the state, a procurement officer may issue a request for proposals requesting the submission of offers to provide construction in accordance with a design provided by the offeror. The request for proposals must require that each proposal submitted contain a single price that includes the design-build.




Sec. 36.30.210. Request for proposals.
 (a) A request for competitive sealed proposals must contain the date, time, and place for delivering proposals, a specific description of the supplies, construction, services, or professional services to be provided under the contract, and the terms under which the supplies, construction, services, or professional services are to be provided.

 (b) An offeror for a construction contract shall submit proof of the offeror’s registration as a contractor under AS 08.18 before the contract may be awarded. A request for sealed proposals for a construction contract, except a design-build construction contract, must require the offeror, not later than five working days after the proposal that is the most advantageous to the state is identified, to list subcontractors the offeror proposes to use in the performance of the construction contract. The list must include the information required under AS 36.30.115(a). The provisions of AS 36.30.115(b) — (g) that apply to a construction contractor or an apparent low bidder apply to offerors submitting competitive sealed proposals for construction contracts, except design-build construction contracts.

 (c) A request for proposals must contain that information necessary for an offeror to submit a proposal or contain references to any information that cannot reasonably be included with the request. The request must provide a description of the factors that will be considered by the procurement officer when evaluating the proposals received, including the relative importance of price and other evaluation factors.

 (d) Notice of a request for proposals shall be given in accordance with procedures under AS 36.30.130. The procurement officer may use additional means considered appropriate to notify prospective offerors of the intent to enter into a contract through competitive sealed proposals.

 (e) The offeror shall have a valid Alaska business license at the time the contract is awarded. To qualify as an Alaska bidder under AS 36.30.321, an offeror shall have a valid Alaska business license at the time designated in the request for proposals for opening of the proposals.

 (f) In this section, “construction contractor” has the meaning given in AS 36.30.115.




Sec. 36.30.220. Standard overhead rate.
 (a) An agency that provides services to another agency under a contract covered by this chapter shall establish a standard overhead rate. If an agency submits a proposal in response to a request for competitive sealed proposals, the agency must include its standard overhead rate within its proposal.

 (b) In this section, “standard overhead rate” means a charge established for services and professional services from an agency that is designed to compensate the agency for administration and support services incidentally provided with the services contracted for.




Sec. 36.30.230. Disclosure of proposals; return of proposals.
 (a) The procurement officer shall open proposals so as to avoid disclosure of contents to competing offerors before notice of intent to award a contract is issued. A register of proposals containing the name and address of each offeror shall be prepared in accordance with regulations adopted by the commissioner. The register and the proposals are open for public inspection after the notice of intent to award a contract is issued under AS 36.30.365. To the extent that the offeror designates and the procurement officer concurs, trade secrets and other proprietary data contained in the proposal documents are confidential.

 (b) If a solicitation is cancelled under AS 36.30.350 after proposals are received but before a notice of intent to award a contract has been issued under AS 36.30.365, a protest of the solicitation or of the cancellation of the solicitation has not been filed by an interested party under AS 36.30.560, and the time specified in AS 36.30.565(a) for filing such a protest has expired, the procurement officer may return a proposal to the offeror that made the proposal. The procurement officer shall keep a list of returned proposals in the file for the solicitation.




Sec. 36.30.240. Discussion with responsible offerors and revisions to proposals.
As provided in the request for proposals, and under regulations adopted by the commissioner, discussions may be conducted with responsible offerors who submit proposals determined to be reasonably susceptible of being selected for award for the purpose of clarification to assure full understanding of, and responsiveness to, the solicitation requirements. Offerors reasonably susceptible of being selected for award shall be accorded fair and equal treatment with respect to any opportunity for discussion and revision of proposals, and revisions may be permitted after submissions and before the award of the contract for the purpose of obtaining best and final offers. In conducting discussions, the procurement officer may not disclose information derived from proposals submitted by competing offerors. AS 44.62.310 does not apply to meetings with offerors under this section.


Sec. 36.30.250. Award of contract.
 (a) The procurement officer shall award a contract under competitive sealed proposals to the responsible and responsive offeror whose proposal is determined in writing to be the most advantageous to the state taking into consideration price and the evaluation factors set out in the request for proposals. Other factors and criteria may not be used in the evaluation. The contract file must contain the basis on which the award is made.

 (b) [Repealed, § 26 ch 59 SLA 2013.]




Sec. 36.30.260. Contract contents.
A contract awarded under competitive sealed proposals must contain
     (1) a statement of the amount of the contract;

     (2) the date for the supplies to be delivered or the dates for construction, services, or professional services to begin and be completed;

     (3) a description of the supplies, construction, services, or professional services to be provided; and

     (4) certification by the project director for the contracting agency, the head of the contracting agency, or a designee that sufficient money is available in an appropriation to be encumbered for the amount of the contract.




Sec. 36.30.265. Multi-step sealed proposals.
When it is considered impractical to initially prepare a definitive purchase description to support an award based on listed selection criteria, the procurement officer may issue an expression of interest requesting the submission of unpriced technical offers, and then later issue a request for proposals limited to the offerors whose offers are determined to be technically qualified under the criteria set out in the expression of interest.


Sec. 36.30.270. Architectural, engineering, and land surveying contracts.
 (a) Notwithstanding conflicting provisions of AS 36.30.100 — 36.30.260, a procurement officer shall negotiate a contract for an agency with the most qualified and suitable firm or person of demonstrated competence for architectural, engineering, or land surveying services. The procurement officer shall award a contract for those services at fair and reasonable compensation as determined by the procurement officer, after consideration of the estimated value of the services to be rendered, and the scope, complexity, and professional nature of the services. When determining the most qualified and suitable firm or person, the procurement officer shall consider the
     (1) proximity to the project site of the office of the firm or person unless federal law prohibits this factor from being considered in the awarding of the contract; and

     (2) employment practices of the firm or person with regard to women and minorities.

 (b) If negotiations with the most qualified and suitable firm or person under (a) of this section are not successful, the procurement officer shall negotiate a contract with other qualified firms or persons of demonstrated competence, in order of public ranking. The procurement officer may reject all or part of a proposal.

 (c) This section does not apply to contracts awarded in a situation of public necessity if the procurement officer certifies in writing that a situation of public necessity exists.

 (d) Notwithstanding the other provisions of this section, a procurement officer may include price as an added factor in selecting architectural, engineering, and land surveying services when, in the judgment of the procurement officer, the services required are repetitious in nature, and the scope, nature, and amount of services required are thoroughly defined by measurable and objective standards to reasonably enable firms or persons making proposals to compete with a clear understanding and interpretation of the services required. In order to include price as a factor in selection, a majority of the persons involved by the procurement officer in evaluation of the proposals must be registered in the state to perform architectural, engineering, or land surveying services.

 (e) This section does not apply to a contract that incorporates both design services and construction.




Article 4. Other Procurement Methods.


Sec. 36.30.290. Electronic bids and proposals.
An agency may allow bids or proposals to be submitted in electronic form under AS 09.80 (Uniform Electronic Transactions Act).


Sec. 36.30.300. Single source procurements.
 (a) A contract may be awarded for supplies, services, professional services, or construction without competitive sealed bidding, competitive sealed proposals, or other competition in accordance with regulations adopted by the commissioner. A contract may be awarded under this section only when the chief procurement officer or, for construction contracts or procurements for the state equipment fleet, the commissioner of transportation and public facilities determines in writing that
     (1) it is not practicable to award a contract by competitive sealed bidding under AS 36.30.100, competitive sealed proposals under AS 36.30.200, or limited competition under AS 36.30.305; and

     (2) award of the contract under this section is in the state’s best interest.

 (b) The using agency shall submit written evidence to support a request for a single source procurement. The commissioner of administration or the commissioner of transportation and public facilities, as appropriate, may also require the submission of cost or pricing data in connection with an award under this section.

 (c) To the extent practicable, the procurement officer shall negotiate with the single source to obtain contract terms advantageous to the state.

 (d) Procurement requirements may not be aggregated or structured so as to constitute a purchase under this section or to circumvent the source selection procedures required by AS 36.30.100 — 36.30.270.

 (e) Except for procurements of supplies, services, professional services, or construction that do not exceed the amount for small procurements under AS 36.30.320(a) as applicable, the authority to make a determination required by this section may not be delegated, even if the authority to contract is delegated under AS 36.30.015(a) and (b).




Sec. 36.30.305. Limited competition procurements.
 (a) A construction contract under $100,000, or a contract for supplies, services, or professional services, may be awarded without competitive sealed bidding or competitive sealed proposals, in accordance with regulations adopted by the commissioner. A contract may be awarded under this section only when the chief procurement officer determines in writing that a situation exists that makes competitive sealed bidding or competitive sealed proposals impractical or contrary to the public interest, except that the attorney general, the public defender, or the director of the office of public advocacy as provided in AS 36.30.015(k) may make the determination for services of legal counsel, and the commissioner of transportation and public facilities may make the determination for construction contracts under $100,000 or procurements for the state equipment fleet. Procurements under this section shall be made with competition that is practicable under the circumstance. Except for procurements of supplies, services, professional services, or construction that do not exceed the amount for small procurements under AS 36.30.320(a), as applicable, the authority to make a determination required by this section may not be delegated.

 (b) The using agency shall submit written evidence to support a determination under this section.

 (c) Procurement requirements may not be artificially divided, fragmented, aggregated, or structured so as to constitute a purchase under this section or to circumvent the source selection procedures required by AS 36.30.100 — 36.30.270.

 (d) Single source procurements may not be made under this section.

 (e) Architectural, engineering, and land survey contracts under AS 36.30.270 may not be made under this section.




Sec. 36.30.308. Innovative procurements.
 (a) A contract may be awarded for supplies, services, professional services, or construction using an innovative procurement process, with or without competitive sealed bidding or competitive sealed proposals, in accordance with regulations adopted by the commissioner. A contract may be awarded under this section only when the chief procurement officer, or, for construction contracts or procurements of the state equipment fleet, the commissioner of transportation and public facilities, determines in writing that it is advantageous to the state to use an innovative competitive procurement process in the procurement of new or unique requirements of the state, new technologies, or to achieve best value.

 (b) The procurement officer shall submit a procurement plan to the Department of Law for review and approval as to form before issuing the notice required by (c) of this section.

 (c) A procurement under this section is subject to the requirements of AS 36.30.130.

 (d) Nothing in this section precludes the adoption of regulations providing for the use of bonuses instead of preferences in a procurement of construction.




Sec. 36.30.310. Emergency procurements.
Procurements may be made under emergency conditions as defined in regulations adopted by the commissioner when there exists a threat to public health, welfare, or safety, when a situation exists that makes a procurement through competitive sealed bidding or competitive sealed proposals impracticable or contrary to the public interest, or to protect public or private property. An emergency procurement need not be made through competitive sealed bidding or competitive sealed proposals but shall be made with competition that is practicable under the circumstances. A written determination by the chief procurement officer of the basis for the emergency and for the selection of the particular contractor shall be included in the contract file. The written determination must include findings of fact that support the determination. Except when there is insufficient time for the chief procurement officer to make the written determination required by this section, the chief procurement officer may not delegate the authority to make the determination.


Sec. 36.30.311. Employment and youth program procurements.
A procurement of products manufactured or services provided by an employment program of the state or an accredited youth education and employment program may be made without competitive sealed bidding or competitive sealed proposals, in accordance with regulations adopted by the commissioner.


Sec. 36.30.313. Procurements provided through employment of prison inmates.
A procurement of products or services provided through the employment of prison inmates under AS 33.30.191 may be made without competitive sealed bidding or competitive sealed proposals, in accordance with regulations adopted by the commissioner.


Sec. 36.30.315. Determinations; false statements; criminal penalty.
 (a) In a determination made by a state official under AS 36.30.300 — 36.30.310, the state official making the determination shall independently examine the material facts of the procurement and independently determine whether the procurement is eligible for the procurement method requested.

 (b) If a state official knowingly makes a false statement in a determination made under AS 36.30.300 — 36.30.310, the state official is guilty of a class A misdemeanor.




Sec. 36.30.320. Small procurements.
 (a) A procurement for supplies, services, or professional services that does not exceed an aggregate dollar amount of $100,000, construction that does not exceed an aggregate dollar amount of $200,000, or lease of space that does not exceed 7,000 square feet shall be made under regulations adopted by the commissioner for small procurements.

 (b) [Repealed, § 48 ch 137 SLA 1996.]
 (c) Small procurements need not be made through competitive sealed bidding or competitive sealed proposals but shall be made with competition that is practicable under the circumstances.

 (d) Procurement requirements may not be artificially divided or fragmented so as to constitute a purchase under this section or to circumvent the source selection procedures required by AS 36.30.100 — 36.30.270.

 (e) The procurement officer shall give adequate public notice of intent to make a procurement under this section in accordance with regulations adopted by the commissioner.




Article 5. Preferences.


Sec. 36.30.321. Alaska bidder and related preferences.
 (a) If the bidder or offeror is an Alaska bidder, a five percent preference shall be applied to the price in the bid or proposal.

 (b) Except as otherwise provided in (d), (e), or (g) of this section, if a bidder or offeror qualifies as an Alaska bidder and is offering services through an employment program, a 15 percent preference shall be applied to the price in the bid or proposal.

 (c) If a bidder or offeror qualifies as an Alaska bidder and is an Alaska domestic insurer, and if the procurement is for an insurance-related contract, a five percent preference shall be applied to the price in the bid or proposal.

 (d) A 10 percent preference shall be applied to a price in a bid or proposal if the bidder or offeror qualifies as an Alaska bidder and is a
     (1) sole proprietorship owned by a person with a disability;

     (2) partnership under AS 32.06 or AS 32.11 if each of the partners is a person with a disability;

     (3) limited liability company organized under AS 10.50 if each of the members is a person with a disability;

     (4) corporation that is wholly owned by individuals, and each of the individuals is a person with a disability; or

     (5) joint venture that is composed of ventures that qualify under (1) — (4) of this subsection.

 (e) The division of vocational rehabilitation in the Department of Labor and Workforce Development shall add to its current list of qualified employment programs a list of individuals who qualify as persons with a disability under (d) of this section. To qualify for a preference under (d) of this section, a person must be on the list at the time the bid or proposal is opened.

 (f) If a bidder or offeror qualifies as an Alaska bidder and is a qualifying entity, a five percent preference shall be applied to the price in the bid or proposal. The preference may not exceed $5,000. In this subsection,
     (1) “Alaska veteran” means an individual who is both a resident of the state and a veteran;

     (2) “qualifying entity” means a
          (A) sole proprietorship owned by an Alaska veteran;

          (B) partnership under AS 32.06 or AS 32.11 if a majority of the partners are Alaska veterans;

          (C) limited liability company organized under AS 10.50 if a majority of the members are Alaska veterans; or

          (D) corporation that is wholly owned by individuals, and a majority of the individuals are Alaska veterans;

     (3) “veteran” means an individual who
          (A) served in the
               (i) armed forces of the United States, including a reserve unit of the United States armed forces; or

               (ii) Alaska Territorial Guard, the Alaska Army National Guard, the Alaska Air National Guard, or the Alaska Naval Militia; and

          (B) was separated from service under a condition that was not dishonorable.

 (g) A bidder or offeror may not receive a preference under both (b) and (d) of this section for the same contract.

 (h) Except as provided by (j) of this section, this section applies to all insurance contracts involving state money. In this subsection, “state money” has the meaning given in AS 36.30.990, but also includes state grants and reimbursements to municipalities, school districts, and other entities.

 (i) To qualify for a preference under (b), (d), or (f) of this section, a bidder or offeror must add value by actually performing, controlling, managing, and supervising the services provided, or the bidder or offeror must have sold supplies of the general nature solicited to other state agencies, other governments, or the general public.

 (j) This section does not apply to solicitations or contracts for lease space under AS 36.30.080, to procurements under AS 36.30.305 — 36.30.310 or, except as provided otherwise by regulation under AS 36.30.320, to small procurements under AS 36.30.320.

 (k) In this section, “person with a disability” means an individual who
     (1) has been determined to be permanently disabled by the
          (A) United States Social Security Administration under 42 U.S.C. 423 or 1381 — 1383f (Social Security Act);

          (B) teachers’ retirement system under AS 14.25, the judicial retirement system under AS 22.25, the public employees’ retirement system under AS 39.35, or the elected public officers’ retirement system under former AS 39.37;

          (C) Federal Civil Service Retirement System under 5 U.S.C. 2107, 3323, and 8331 — 8351;

          (D) federal employees’ retirement system under 5 U.S.C. 8401 — 8480; or

          (E) division of vocational rehabilitation in the Department of Labor and Workforce Development using disability standards under 42 U.S.C. 1381 — 1383f (Social Security Act) for eligibility for certain state disability programs;

     (2) is receiving permanent total disability under AS 23.30 (Alaska Workers’ Compensation Act);

     (3) has been discharged from military service under honorable conditions and is certified by the United States Department of Veterans Affairs as having incurred a 50 percent or greater disability during military service; or

     (4) has served in the Alaska Territorial Guard and incurred a 50 percent or greater disability while serving in the Alaska Territorial Guard.




Sec. 36.30.322. Use of local forest products.
 (a) Only timber, lumber, and manufactured lumber products originating in this state from Alaska forests may be procured by an agency or used in construction projects of an agency unless
     (1) the manufacturers and suppliers who have notified the commissioner of commerce, community, and economic development of their willingness to manufacture or supply Alaska forest products have been given reasonable notice of the forest product needs of the procurement or project; and

     (2) a manufacturer or supplier who has notified the commissioner of commerce, community, and economic development of its willingness to manufacture or supply Alaska forest products is not the low bidder after all applicable preferences have been applied to the price of the qualifying forest product under AS 36.30.336.

 (b) The provisions of AS 36.30.326 — 36.30.332 do not apply to procurements of timber, lumber, and manufactured lumber products or the use of those items in construction projects of an agency.

 (c) During the period of performance of a state contract, the contractor shall maintain records showing efforts made in using Alaska forest products or evidence of Alaska forest products not being available or reasonably competitive. The contractor shall provide the records to the procurement officer on a periodic basis, as required by regulations adopted by the commissioner of commerce, community, and economic development.




Sec. 36.30.324. Use of Alaska products and recycled Alaska products.
Alaska products shall be used whenever practicable in procurements for an agency. Recycled Alaska products shall be used when they are of comparable quality, of equivalent price, and appropriate for the intended use.


Sec. 36.30.326. Contract specifications.
Contract specifications for a procurement for an agency must include a provision that a bidder or offeror that designates in a bid or proposal the use of Alaska products identified in the specifications will receive the preference granted under AS 36.30.328 in the evaluation of the bid or proposal if the designated Alaska products meet the contract specifications.


Sec. 36.30.328. Grant of Alaska products preference.
In the evaluation of a bid or proposal for a procurement for an agency, a bid or offer that designates the use of Alaska products identified in the contract specifications and designated as Class I, Class II, or Class III state products under AS 36.30.332 is decreased by the percentage of the value of the designated Alaska products under AS 36.30.332.


Sec. 36.30.330. Penalty for failing to use designated products.
 (a) If a successful bidder or offeror who designates the use of an Alaska product in a bid or proposal for a procurement for an agency fails to use the designated product for a reason within the control of the successful bidder or offeror, each payment under the contract shall be reduced according to the following schedule:
     (1) for a Class I designated Alaska product — four percent;

     (2) for a Class II designated Alaska product — six percent;

     (3) for a Class III designated Alaska product — eight percent.

 (b) A person is not a responsible bidder or offeror if, in the preceding three years, the person has twice designated the use of an Alaska product in a bid or proposal for a procurement for an agency and has each time failed to use the designated Alaska product for reasons within the control of the bidder or offeror.

 (c) The procurement officer shall report to the commissioner of commerce, community, and economic development each contractor penalized under (a) of this section. The commissioner of commerce, community, and economic development shall maintain a list of contractors determined not to be responsible bidders under (b) of this section.




Sec. 36.30.331. Delivery of supplies.
Supplies purchased under this chapter shall be delivered at a location within the state unless the department determines that a point of delivery outside the state would be in the best interest of the state. A bid or proposal involving the procurement of supplies must specify the delivery location and must state that the price is the delivered price at that location.


Sec. 36.30.332. Classification of Alaska products.
 (a) The commissioner of commerce, community, and economic development shall adopt regulations establishing the value added in the state for materials and supplies produced or manufactured in the state that are used in a state procurement and establishing whether a product qualifies as a recycled Alaska product. The commissioner shall publish a list of the products annually. A supplier may request inclusion of its product on the appropriate list.

 (b) Materials and supplies with value added in the state that are
     (1) more than 25 percent and less than 50 percent produced or manufactured in the state are Class I products;

     (2) 50 percent or more and less than 75 percent produced or manufactured in the state are Class II products; and

     (3) 75 percent or more produced or manufactured in the state are Class III products.

 (c) In a bid or proposal evaluation a
     (1) Class I product is given a three percent preference;

     (2) Class II product is given a five percent preference;

     (3) Class III product is given a seven percent preference.




Sec. 36.30.333. Procurement of paper.
Except as otherwise required under AS 36.15.050, AS 36.30.322 — 36.30.332, and 36.30.334 — 36.30.338, when a state agency purchases paper, at least 25 percent of the quantity purchased must be recycled paper unless recycled paper is not available for the purchase or unless, after application of the procurement preference under AS 36.30.337, the recycled paper is more expensive than the nonrecycled paper.


Sec. 36.30.334. Identification of Alaska products.
An agency may identify specific Alaska products for use in making a procurement.


Sec. 36.30.335. Relationship to other product preferences. [Repealed, § 26 ch 59 SLA 2013.]
Sec. 36.30.336. Application of preferences.
 (a) Except as provided in AS 36.15.050(g) and AS 36.30.321(g), the preferences provided in AS 36.15.050 and AS 36.30.321 — 36.30.338 are cumulative. A bidder who would otherwise qualify for preferences under AS 36.30.321 may not be given a preference over another bidder who qualifies for the same preferences.

 (b) Notwithstanding the other provisions of this chapter, AS 36.30.321 — 36.30.338 apply to all procurements subject to this chapter, except as provided in AS 36.15.050(h) and AS 36.30.322(b).




Sec. 36.30.337. Procurement preference for recycled products.
 (a) In the evaluation of a bid or proposal for an agency procurement of products, the agency shall decrease the bid or proposal by five percent if the bid or proposal indicates that the products being purchased will be recycled products.

 (b) A decrease made under (a) of this section is in addition to other preferences allowed for the procurement.

 (c) The department shall establish the minimum percentage of recycled content that will qualify a product as a recycled product under (a) of this section.




Sec. 36.30.338. Definitions.
In AS 36.30.322 — 36.30.338,
     (1) “Alaska product” means a product of which not less than 25 percent of the value, as determined in accordance with regulations adopted under AS 36.30.332(a), has been added by manufacturing or production in the state;

     (2) “produced or manufactured” means processing, developing, or making an item into a new item with a distinct character and use through the application within the state of materials, labor, skill, or other services;

     (3) “product” means materials or supplies but does not include gravel and asphalt;

     (4) “recycled Alaska product” means an Alaska product of which not less than 50 percent of the value of the product consists of a product that was previously used in another product, if the recycling process is done in the state.




Sec. 36.30.339. [Renumbered as AS 36.30.337.]

Article 6. Contract Formation and Modification.


Sec. 36.30.340. Review and approval by the Attorney General.
If a contract contains a term that is in conflict with a state standard form contract term or if a standard term is deleted or modified by a term that is not standard, the contract must be reviewed by the Attorney General and approved as to form.


Sec. 36.30.350. Solicitation cancellation, bid and proposal rejection, and delay of opening bid or proposal.
An invitation to bid, a request for proposals, or other solicitation may be cancelled or any or all bids or proposals may be rejected in whole or in part or the date for opening bids or proposals may be delayed when it is in the best interests of the state in accordance with regulations adopted by the commissioner. The reasons for cancellation, rejection, or delay in opening bids or proposals shall be made part of the contract file.


Sec. 36.30.360. Determination of nonresponsibility.
 (a) A written determination of nonresponsibility of a bidder or offeror shall be made by the procurement officer in accordance with regulations adopted by the commissioner. The unreasonable failure of a bidder or offeror to promptly supply information in connection with an inquiry with respect to responsibility is grounds for a determination of nonresponsibility with respect to the bidder or offeror.

 (b) Information furnished by a bidder or offeror under (a) of this section is confidential and may not be disclosed without prior written consent by the bidder or offeror.




Sec. 36.30.362. Award of a contract to a nonresident.
Except for awards made under AS 36.30.170, if the procurement officer awards a contract to a person who does not reside or maintain a place of business in the state and if the supplies, services, professional services, or construction that is the subject of the contract could have been obtained from sources in the state, the procurement officer shall issue a written statement explaining the basis of the award. The statement required under this section shall be kept in the contract file.


Sec. 36.30.365. Notice of intent to award a contract.
At least 10 days before the formal award of a contract that is not for construction, and at least five days before the award of a construction contract, under this chapter, except for a contract awarded under AS 36.30.300 — 36.30.320, the procurement officer shall provide to each bidder or offeror notice of intent to award a contract. The notice must conform to regulations adopted by the commissioner.


Sec. 36.30.370. Permissible types of contracts.
Any type of contract that will promote the best interests of the state may be used, except that the use of a cost-plus-a-percentage-of-cost contract is prohibited.


Sec. 36.30.380. Approval of accounting system. [Repealed, § 24 ch 65 SLA 1987.]
Sec. 36.30.390. Contract term and cancellation.
 (a) Unless otherwise provided by law, a contract for supplies, services, or professional services may be entered into for any period of time considered to be in the best interests of the state provided the term of the contract and conditions of renewal or extension, if any, are included in the solicitation and funds are available for the first fiscal period at the time of contracting. Payment and performance obligations for succeeding fiscal periods shall be subject to the availability and appropriation of funds for them.

 (b) Before using a multi-term contract, the procurement officer shall determine in writing that
     (1) estimated requirements cover the period of the contract and are reasonably firm and continuing; and

     (2) the contract will serve the best interests of the state by encouraging effective competition or otherwise promoting economies in state procurement.

 (c) When funds are not appropriated or otherwise made available to support continuation of performance in a subsequent fiscal period, the contract shall be cancelled. The contractor may only be reimbursed for the reasonable value of any nonrecurring costs incurred but not amortized in the price of the supplies, services, or professional services delivered under the contract that are not otherwise recoverable. The cost of cancellation may be paid from any appropriations available for these purposes.




Sec. 36.30.400. Required cost and pricing data and contract provisions.
 (a) Before an award of a contract or a change order or contract modification, the contractor or prospective contractor shall submit cost and pricing data. The contractor or prospective contractor shall certify that, to the best of the contractor’s or prospective contractor’s knowledge and belief, the data submitted is accurate, complete, and current as of a mutually determined specified date and will continue to be accurate and complete during the performance of the contract.

 (b) When a contractor becomes aware of a situation that may form the basis of a claim for compensation that exceeds the amount designated as the base amount of the contract and before performing additional work or supplying additional materials, the contractor shall submit cost and pricing data on the additional work or materials. The contractor shall certify that, to the best of the contractor’s knowledge and belief, the data submitted is accurate, complete, and current and is the actual cost to the contractor of performing the additional work or supplying the additional materials.

 (c) A contract, change order, or contract modification under which a certificate is required under (a) or (b) of this section must contain a provision that the price to the state, including the contractor’s profit or fee, will be adjusted to exclude any significant sums by which the state finds that the price is increased because the cost or pricing data furnished by the contractor or prospective contractor is inaccurate, incomplete, or not current as of the date agreed upon by the parties.

 (d) The requirements of (a) of this section do not apply when
     (1) the contract price is based on adequate price competition;

     (2) the contract price is set by law or regulation; or

     (3) it is determined by the procurement officer in writing and in accordance with regulations adopted by the commissioner that the requirements of (a) of this section may be waived, and the reasons for waiver are stated.




Sec. 36.30.410. Right to inspect plant.
The state may, at reasonable times, inspect the part of the plant or place of business of a contractor or subcontractor that is related to the performance of a contract awarded or to be awarded by an agency.


Sec. 36.30.420. Right to audit records.
 (a) The state may, at reasonable times and places, audit the books and records of a person who has submitted cost or pricing data under AS 36.30.400 to the extent that the books and records relate to the cost or pricing data. A person who receives a contract, change order, or contract modification for which cost or pricing data is required, shall maintain books and records that relate to the cost or pricing data for three years after the date of final payment under the contract, unless a shorter period is authorized in writing by the commissioner.

 (b) The state may audit the books and records of a contractor or a subcontractor to the extent that the books and records relate to the performance of the contract or subcontract. Books and records shall be maintained by the contractor for a period of three years after the date of final payment under the prime contract and by the subcontractor for a period of three years after the date of final payment under the subcontract, unless a shorter period is authorized in writing by the commissioner.




Sec. 36.30.430. Contract clauses.
 (a) The commissioner shall adopt regulations permitting the inclusion of clauses providing for adjustments in prices, time of performance, or other contract provisions as appropriate.

 (b) The commissioner shall adopt regulations permitting or requiring the inclusion in state contracts of clauses providing for appropriate remedies and covering the following subjects:
     (1) liquidated damages;

     (2) specified excuses for delay or nonperformance;

     (3) termination of the contract for default; and

     (4) termination of the contract in whole or in part for the convenience of the state.




Sec. 36.30.460. Modification of standard clauses.
The procurement officer or the head of a contracting agency may vary the clauses adopted under AS 36.30.430 for inclusion in a particular state contract if the
     (1) variations are supported by a written determination that states the circumstances justifying the variation; and

     (2) approval required by AS 36.30.340 is obtained.




Sec. 36.30.470. Fiscal effects of construction contract modifications.
A contract modification, change order, or contract price adjustment under a construction contract in excess of an amount established by regulation of the commissioner is subject to prior written certification by the fiscal officer of the agency responsible for funding the project or the contract, or other official responsible for monitoring and reporting upon the status of the costs of the total project budget or contract budget, as to the effect of the contract modification, change order, or adjustment in contract price on the total project budget or the total contract budget. If the certification of the fiscal officer or other responsible official discloses a resulting increase in the total project budget or the total contract budget, the procurement officer may not approve the contract modification, change order, or adjustment in contract price unless sufficient funds are available, or the scope of the project or contract is adjusted to permit the degree of completion that is feasible within the total project budget or total contract budget as it existed before the contract modification, change order, or adjustment in contract price under consideration. A contract modification, change order, or adjustment in contract that is signed by both parties and has been reasonably relied on by a contractor is presumed to be valid even if the provisions of this section have not been met.


Sec. 36.30.480. Establishment and modification of cost principles.
The commissioner shall adopt regulations setting out cost principles that shall be used to determine the allowability of incurred costs for the purpose of reimbursing costs under contract provisions that provide for the reimbursement of costs. If a written determination is approved at a level above the procurement officer, the cost principles may be modified by contract.


Article 7. Procurement Records and Reports.


Sec. 36.30.500. Retention of procurement records.
Procurement records shall be retained and disposed of in accordance with records retention guidelines and schedules approved by the state archivist. Retained documents shall be made available to the attorney general or a designee upon request and proper receipt.


Sec. 36.30.510. Records of contracts awarded under competitive sealed proposals.
A contract file open for public inspection shall be kept by the commissioner and the contracting agency for each contract awarded under competitive sealed proposals. The file kept by the commissioner must contain a summary of the information in the file of the contracting agency. The file kept by the contracting agency must contain
     (1) a copy of the contract;

     (2) the register of proposals prepared under AS 36.30.230 and a copy of each proposal submitted; and

     (3) the written determination to award the contract prepared under AS 36.30.250.




Sec. 36.30.520. Records of single source and emergency procurements.
 (a) The commissioner shall maintain for a minimum of five years a record listing all single source procurement contracts made under AS 36.30.300 and emergency procurements made under AS 36.30.310. The record must contain
     (1) each contractor’s name;

     (2) the amount and type of each contract; and

     (3) a listing of the supplies, services, professional services, or construction procured under each contract.

 (b) The Department of Transportation and Public Facilities and any agency to whom the commissioner of administration or the commissioner of transportation and public facilities has delegated procurement authority under AS 36.30.015 shall, by October 1 of each year, submit to the commissioner of administration records of the type specified in (a) of this section for emergency procurements made under AS 36.30.310. The Department of Transportation and Public Facilities shall, even if procurement authority has been delegated under AS 36.30.015 to another agency, by October 1 of each year, submit to the commissioner of administration records of the type specified in (a) of this section for single source procurement contracts made under AS 36.30.300. The commissioner of administration shall maintain these records as required by (a) of this section.




Sec. 36.30.522. Records of innovative procurements.
The commissioner and the contracting agency shall keep a file for each contract awarded under an innovative procurement process under AS 36.30.308. The file is subject to inspection under the same standards as described in AS 36.30.140(b) and 36.30.230. The file kept by the commissioner must contain a summary of the information in the file of the contracting agency. The file kept by the contracting agency must contain
     (1) a copy of the contract;

     (2) the written determination under AS 36.30.308(a);

     (3) the procurement plan as approved as to form by the Department of Law;

     (4) the record of notice under AS 36.30.130; and

     (5) the record of respondents to solicitation.




Sec. 36.30.530. Public access to procurement information.
Procurement information is public except as otherwise provided by law.


Sec. 36.30.540. Procurement report.
The commissioner shall biennially prepare a report concerning procurements by agencies and notify the legislature that the report is available. The report must include
     (1) the records maintained by the commissioner under AS 36.30.510 and the records maintained under AS 36.30.520(a) for the previous two fiscal years;

     (2) a list of procurements made under this chapter from out-of-state sources during the previous two fiscal years together with the total number of procurement contracts entered into during that period with out-of-state contractors and the total value of these contracts; this paragraph does not apply to procurements made under AS 36.30.320; and

     (3) a list of procurements made under this chapter from state sources during the previous two fiscal years together with the total number of procurement contracts entered into during that period with state contractors and the total value of these contracts; this paragraph does not apply to procurements made under AS 36.30.320.




Article 8. Legal and Contractual Remedies.


Sec. 36.30.550. Applicability of protest and appeal procedures.
 (a) Except for small procurements made under AS 36.30.320, the provisions of AS 36.30.560 — 36.30.615 apply to a solicitation, a proposed contract award, and an award of a contract for supplies, services, professional services, or construction.

 (b) The commissioner shall adopt regulations providing for protest and appeal procedures of small procurements made under AS 36.30.320.




Sec. 36.30.560. Filing of a protest.
An interested party may protest the award of a contract, the proposed award of a contract, or a solicitation for supplies, services, professional services, or construction by an agency. The protest shall be filed with the procurement officer of the contracting agency in writing and include the following information:
     (1) the name, address, and telephone number of the protester;

     (2) the signature of the protester or the protester’s representative;

     (3) identification of the contracting agency and the solicitation or contract at issue;

     (4) a detailed statement of the legal and factual grounds of the protest, including copies of relevant documents; and

     (5) the form of relief requested.




Sec. 36.30.565. Time for filing a protest.
 (a) A protest based on alleged improprieties or ambiguities in a solicitation must be filed at least 10 days before the due date of the bid or proposal, unless a later protest due date is specifically allowed in the solicitation. If a solicitation is made with a shortened public notice period and the protest is based on alleged improprieties or ambiguities in the solicitation, the protest must be filed before the due date of the bid or proposal. Notwithstanding the other provisions in this subsection, the protest of an invitation to bid or a request for proposals in which a pre-bid or pre-proposal conference is held within 12 days of the due date must be filed before the due date of the bid or proposal if the protest is based on alleged improprieties or ambiguities in the solicitation. A protest based upon alleged improprieties in an award of a contract or a proposed award of a contract must be filed within 10 days after a notice of intent to award the contract is issued by the procurement officer.

 (b) If the protester shows good cause, the procurement officer of the contracting agency may consider a filed protest that is not timely.




Sec. 36.30.570. Notice of a protest.
The procurement officer shall immediately give notice of a protest filed under AS 36.30.565 to the contractor if a contract has been awarded or, if no award has been made, to all interested parties.


Sec. 36.30.575. Stay of award.
If a protest is filed the award may be made unless the procurement officer of the contracting agency determines in writing that a
     (1) reasonable probability exists that the protest will be sustained; or

     (2) stay of the award is not contrary to the best interests of the state.




Sec. 36.30.580. Decision by the procurement officer.
 (a) The procurement officer of the contracting agency shall issue a written decision containing the basis of the decision within 15 days after a protest has been filed. A copy of the decision shall be furnished to the protester by certified mail or other method that provides evidence of receipt.

 (b) The time for a decision may be extended up to 30 days for good cause by the commissioner of administration, or, for protests involving construction or procurements for the state equipment fleet, the commissioner of transportation and public facilities. If an extension is granted, the procurement officer shall notify the protester in writing of the date that the decision is due.

 (c) If a decision is not made by the date it is due, the protester may proceed as if the procurement officer had issued a decision adverse to the protester.




Sec. 36.30.585. Protest remedies.
 (a) If the procurement officer sustains a protest in whole or in part, the procurement officer shall implement an appropriate remedy.

 (b) In determining an appropriate remedy, the procurement officer shall consider the circumstances surrounding the solicitation or procurement including the seriousness of the procurement deficiencies, the degree of prejudice to other interested parties or to the integrity of the procurement system, the good faith of the parties, the extent the procurement has been accomplished, costs to the agency and other impacts on the agency of a proposed remedy, and the urgency of the procurement to the welfare of the state.

 (c) Notwithstanding (a) and (b) of this section, if a protest is sustained in whole or part, the protester’s damages are limited to reasonable bid or proposal preparation costs.




Sec. 36.30.590. Appeal on a protest.
 (a) An appeal from a decision of a procurement officer on a protest may be filed by the protester with the commissioner of administration, or for protests involving construction or procurements for the state equipment fleet, the commissioner of transportation and public facilities. An appeal shall be filed within 10 days after the decision is received by the protester. The protester shall file a copy of the appeal with the procurement officer.

 (b) An appeal must contain the information required under AS 36.30.560. In addition, the appeal must include
     (1) a copy of the decision being appealed; and

     (2) identification of the factual or legal errors in the decision that form the basis for the appeal.




Sec. 36.30.595. Notice and copy of a protest appeal.
 (a) The procurement officer shall immediately give notice of an appeal filed under AS 36.30.590 to the contractor if a contract has been awarded or, if no award has been made, to all interested parties.

 (b) The commissioner of administration or the commissioner of transportation and public facilities, as appropriate, shall, on request, furnish a copy of the appeal to a person notified under (a) of this section, except that confidential material shall be deleted from the copy.




Sec. 36.30.600. Stay of award during protest appeal.
If a protest appeal is filed before a contract is awarded and the award was stayed under AS 36.30.575, the filing of the appeal automatically continues the stay until the commissioner of administration or the commissioner of transportation and public facilities, as appropriate, makes a written determination that the award of the contract without further delay is necessary to protect substantial interests of the state.


Sec. 36.30.605. Protest report and comments.
 (a) The procurement officer of the contracting agency shall file a complete report on the protest and decision with the commissioner of administration or the commissioner of transportation and public facilities, as appropriate, within 10 days after a protest appeal is filed. The procurement officer shall furnish a copy of the report to the protester and to interested parties that have requested a copy of the appeal under AS 36.30.595(b).

 (b) The procurement officer may request an extension of time to prepare the protest report. The request must be in writing listing the reasons for the request. The commissioner of administration or the commissioner of transportation and public facilities, as appropriate, shall respond to the request in writing. If an extension is granted, the commissioner shall list the reasons for granting the extension and indicate the date the protest report is due. The commissioner shall notify the protester in writing that the time for submission of the report has been extended and the date the report is due.

 (c) The protester may file comments on the protest report with the commissioner of administration or the commissioner of transportation and public facilities, as appropriate, within 10 days after the report is received. The protester shall provide copies of the comments to the procurement officer and to interested parties that have requested a copy of the appeal under AS 36.30.595(b).

 (d) The protester may request an extension of time to prepare the comments on the protest report. The request must be in writing listing the reasons for the request. The commissioner of administration or the commissioner of transportation and public facilities, as appropriate, shall respond to the request in writing. If an extension is granted, the commissioner shall list the reasons for granting the extension and indicate the date the comments are due. The commissioner shall notify the procurement officer in writing that the time for submission of the comments has been extended and the date the comments are due.




Sec. 36.30.610. Decision without hearing.
 (a) The commissioner of administration or the commissioner of transportation and public facilities, as appropriate, shall dismiss a protest appeal before a hearing is held if it is determined in writing that the appeal is untimely under AS 36.30.590(a).

 (b) The commissioner of administration or the commissioner of transportation and public facilities, as appropriate, may issue a decision on an appeal without a hearing if the appeal involves questions of law without genuine issues of fact.

 (c) The commissioner of administration or the commissioner of transportation and public facilities, as appropriate, shall, within 15 days from the date the appellant’s comments on the protest report are due under AS 36.30.605(c) and (d), notify the appellant of the acceptance or rejection of the appeal and, if rejected, the reasons for the rejection.




Sec. 36.30.615. Hearing on protest appeal.
A hearing on a protest appeal shall be conducted in accordance with AS 36.30.670 and regulations adopted by the commissioner to the extent the regulations do not conflict with regulations adopted under AS 44.64.060.


Sec. 36.30.620. Contract claims.
 (a) A contractor shall file a claim concerning a contract awarded under this chapter with the procurement officer. The contractor shall certify that the claim is made in good faith, that the supporting data are accurate and complete to the best of the contractor’s knowledge and belief, and that the amount requested accurately reflects the contract adjustment for which the contractor believes the state is liable. Except for a lease rate adjustment called for in the lease, a claim under this section must be filed within 90 days after the contractor becomes aware of the basis of the claim or should have known the basis of the claim, whichever is earlier. A lease rate adjustment called for in the lease must be filed prior to the expiration date of the lease.

 (b) If a claim asserted concerning a contract awarded under this chapter cannot be resolved by agreement, the procurement officer shall, after receiving a written request by the contractor for a decision, issue a written decision. The procurement officer shall make the decision not more than 90 days after receipt of all necessary information from the contractor. If the contractor fails to furnish necessary information requested by the procurement officer, the procurement officer shall proceed to decide the claim and may, in the procurement officer’s discretion, deny all or part of the claim because of the failure to furnish necessary information. During an appeal under this chapter, the contractor may not rely on or introduce information that the contractor has failed to furnish to the procurement officer in support of the claim. Before issuing the decision, the procurement officer shall review the facts relating to the claim and obtain necessary assistance from legal, fiscal, and other advisors.

 (c) Upon the written request of the procurement officer, the time for issuing a decision under (b) of this section may be extended for up to 60 additional days by the commissioner if the claim concerns an amount in excess of $50,000. Upon the written request of the procurement officer showing that good cause exists for a second extension, the commissioner may extend the time for issuing a decision under (b) of this section up to 90 additional days after the first extension. The contractor shall be provided with an opportunity to oppose or otherwise respond to the request for a second extension. If a second extension is granted, the commissioner shall notify the contractor and the procurement officer in writing that the time for the issuance of a decision has been extended and of the date by which a decision shall be issued. In this subsection, “commissioner” means the commissioner of administration or, for a claim involving a construction contract or procurement for the state equipment fleet, the commissioner of transportation and public facilities.

 (d) The procurement officer shall furnish a copy of the decision to the contractor by certified mail or other method that provides evidence of receipt. The decision must include
     (1) a description of the claim;

     (2) a reference to the pertinent contract provisions;

     (3) a statement of the agreed upon and disputed facts;

     (4) findings of fact about the claim;

     (5) a determination of any amount payable;

     (6) a statement of reasons supporting the decision; and

     (7) a statement substantially as follows:
“This is the final decision of the procurement officer. This decision may be appealed to the commissioner of (administration/transportation and public facilities). If you appeal, you must file a written notice of appeal with the commissioner within 14 days after you receive this decision.”

 (e) If the procurement officer does not issue a written decision by the date it is due, the contractor may proceed as if the procurement officer had issued a decision adverse to the contractor.

 (f) If a claim asserted by the state concerning a contract awarded under this chapter cannot be resolved by agreement the matter shall be immediately referred to the commissioner of administration or the commissioner of transportation and public facilities, as appropriate.

 (g) This section does not apply to payment disputes governed by AS 37.05.285.




Sec. 36.30.623. Interest on certain claims.
The amount ultimately determined to be due under AS 36.30.620 — 36.30.630 and 36.30.670 — 36.30.685 to a department contractor, the department, or a contracting agency to whom the responsibility for handling the claims is delegated by the department under AS 36.30.632 accrues interest at the rate applicable to judgments under AS 09.30.070(a). Notwithstanding AS 09.30.070(b), the interest accrues from the date that a complete claim is filed that meets the requirements of AS 36.30.620(a) through the date of a decision by the procurement officer under AS 36.30.620, a decision by the commissioner of transportation and public facilities under AS 36.30.680, or a judicial decision under AS 36.30.685, whichever decision is latest. In this section, “department” means the Department of Transportation and Public Facilities.


Sec. 36.30.625. Appeal on a contract claim.
 (a) An appeal from a decision of the procurement officer on a contract claim may be filed by the contractor with the commissioner of administration or, for a claim involving a construction contract or procurement for the state equipment fleet, the commissioner of transportation and public facilities. The appeal shall be filed within 14 days after the decision is received by the contractor. An appeal by a contractor of the Department of Transportation and Public Facilities may not raise any new factual issues or theories of recovery that were not presented to and decided by the procurement officer in the decision under AS 36.30.620(b), except that a contractor may increase the contractor’s calculation of damages if the increase arises out of the same operative facts on which the original claim was based. The contractor shall file a copy of the appeal with the procurement officer.

 (b) An appeal must contain a copy of the decision being appealed and identification of the factual or legal errors in the decision that form the basis for the appeal.

 (c) The Department of Transportation and Public Facilities, or a contracting agency to whom the responsibility for handling the claim is delegated by the Department of Transportation and Public Facilities under AS 36.30.632, shall handle the appeal of a claim under this section expeditiously.




Sec. 36.30.627. Construction contract claim appeals.
 (a) An appeal from a decision of the procurement officer of a claim involving a construction contract shall be resolved by
     (1) binding and final arbitration under AS 09.43.010 — 09.43.180 (Uniform Arbitration Act) or AS 09.43.300 — 09.43.595 (Revised Uniform Arbitration Act), as applicable, if the claim is
          (A) less than $250,000 and the contractor requests arbitration of the claim; or

          (B) $250,000 or more and both the agency and the contractor agree to arbitration of the claim; or

     (2) a hearing under AS 36.30.630 if the claim is not handled by arbitration under (1) of this subsection.

 (b) In this section, a claim includes all issues, causes of action, and controversies arising from a construction contract for which a contractor or the contracting agency asserts compensation is due.




Sec. 36.30.629. Subpoenas and discovery.
In appeals under AS 36.30.627, the arbitrator or hearing officer may
     (1) issue subpoenas, including subpoenas duces tecum, to compel the attendance of witnesses and the production of documents;

     (2) allow the taking of depositions for discovery or to perpetuate testimony; and

     (3) refer a subpoena or subpoena duces tecum to the superior court for enforcement and the imposition of appropriate sanctions.




Sec. 36.30.630. Hearing on a contract claim; decision without hearing.
 (a) Except as provided in (b) of this section, a hearing shall be conducted according to AS 36.30.670 and, to the extent they do not conflict with regulations adopted under AS 44.64.060, regulations adopted by the commissioner of administration on a contract claim appealed to the commissioner of administration or the commissioner of transportation and public facilities or referred to either commissioner under AS 36.30.620(f).

 (b) Except as provided in AS 36.30.627(a)(1), within 15 days after receipt of an appeal on a contract claim, the commissioner of administration or the commissioner of transportation and public facilities, as appropriate, may adopt the decision of the procurement officer as the final decision without a hearing.




Sec. 36.30.631. Attorney fees, costs, and offers of judgment.
 (a) An arbitrator in the arbitration of a construction contract claim under AS 36.30.627(a)(1) and a hearing officer for the hearing of a construction contract claim conducted under AS 36.30.627(a)(2) shall award the prevailing party attorney fees and costs incurred in the arbitration or hearing. The award shall be made as provided by Rules 68, 79, and 82 of the Alaska Rules of Civil Procedure.

 (b) Either party to an arbitration of a construction contract claim conducted under AS 36.30.627 or a hearing of a construction contract claim conducted under AS 36.30.630(a) may serve on the adverse party an offer to allow a final decision to be entered in complete satisfaction of the claim. The offer shall be made, accepted, or rejected as provided for an offer of judgment under Rule 68 of the Alaska Rules of Civil Procedure. Acceptance or rejection of the offer has the same consequences as acceptance or rejection of an offer of judgment made in a civil action under Rule 68 of the Alaska Rules of Civil Procedure.




Sec. 36.30.632. Delegation.
The commissioner of administration and the commissioner of transportation and public facilities may delegate responsibilities under AS 36.30.590 — 36.30.630 to the head of the contracting agency.


Sec. 36.30.635. Authority to debar or suspend.
 (a) After consultation with the using agency and the attorney general and after a hearing conducted according to AS 36.30.670 and, to the extent they do not conflict with regulations adopted under AS 44.64.060, regulations adopted by the commissioner of administration, the commissioner of administration or the commissioner of transportation and public facilities may debar a person for cause from consideration for award of contracts. Notice of a debarment hearing shall be provided in writing at least seven days before the hearing. The debarment may not be for a period of more than three years.

 (b) The commissioner of administration or the commissioner of transportation and public facilities, after consultation with the using agency and the attorney general, may suspend a person from consideration for award of contracts if there is probable cause for debarment and compelling reasons require suspension to protect state interests. The suspension may not be for a period exceeding three months.

 (c) The authority to debar or suspend shall be exercised in accordance with regulations adopted by the commissioner of administration.




Sec. 36.30.640. Causes for debarment or suspension.
The causes for debarment or suspension include
     (1) conviction for commission of a criminal offense as an incident to obtaining or attempting to obtain a public or private contract or subcontract, or in the performance of the contract or subcontract;

     (2) conviction under state or federal statutes of embezzlement, theft, forgery, bribery, falsification or destruction of records, receiving stolen property, or other offense indicating a lack of business integrity or business honesty that currently and seriously affects responsibility as a state contractor;

     (3) conviction or civil judgment finding a violation under state or federal antitrust statutes;

     (4) violation of contract provisions of a character that is regarded by the commissioner to be so serious as to justify debarment action, such as
          (A) knowing failure without good cause to perform in accordance with the specifications or within the time limit provided in the contract; or

          (B) failure to perform or unsatisfactory performance in accordance with the terms of one or more contracts, except that failure to perform or unsatisfactory performance caused by acts beyond the control of the contractor may not be considered to be a basis for debarment;

     (5) for violation of the ethical standards set out in law or regulation;

     (6) for a violation of this chapter punishable under AS 36.30.930(2); and

     (7) any other cause listed in regulations of the commissioner determined to be so serious and compelling as to affect responsibility as a state contractor, including debarment by another governmental entity for a cause listed in the regulations.




Sec. 36.30.645. Written determinations.
 (a) The commissioner of administration or the commissioner of transportation and public facilities shall issue a written decision to debar or suspend. The decision must
     (1) state the reasons for the action taken; and

     (2) inform the debarred person of rights to judicial appeal or inform the suspended person of rights to administrative and judicial appeal.

 (b) A copy of the decision under (a) of this section shall be mailed or otherwise furnished immediately to the debarred or suspended person and any other intervening party.




Sec. 36.30.650. Hearing on a suspension.
 (a) A person suspended under AS 36.30.635 is entitled to a hearing conducted according to AS 36.30.670 and, to the extent that they do not conflict with regulations adopted under AS 44.64.060, regulations adopted by the commissioner of administration, if the person files a written request for a hearing with the commissioner of administration or the commissioner of transportation and public facilities, as appropriate, within seven days after receipt of the notice of suspension under AS 36.30.645.

 (b) If a suspended person requests a hearing, the commissioner of administration or the commissioner of transportation and public facilities, as appropriate, after consulting with the office of administrative hearings (AS 44.64.010), shall schedule a prompt hearing unless the attorney general determines that a hearing at the proposed time is likely to jeopardize an investigation. A hearing may not be delayed longer than six months after notice of the suspension is provided under AS 36.30.645.




Sec. 36.30.655. List of persons debarred or suspended.
The commissioner shall maintain a list of all persons debarred or suspended from consideration for the award of contracts.


Sec. 36.30.660. Reinstatement.
 (a) The commissioner of administration or the commissioner of transportation and public facilities may at any time after a final decision to debar a person from consideration for award of contracts reinstate the person after determining that the cause for which the person was debarred no longer exists or has been substantially mitigated.

 (b) A debarred person may request reinstatement by submitting a petition to the commissioner of administration or the commissioner of transportation and public facilities supported by evidence showing that the cause for debarment no longer exists or has been substantially mitigated.

 (c) The commissioner of administration or the commissioner of transportation and public facilities may require a hearing on a reinstatement petition. A decision on reinstatement shall be made in writing within seven days after a reinstatement petition is submitted. The decision must specify the factors on which it is based. A decision under this section is not subject to judicial appeal.




Sec. 36.30.665. Limited participation by debarred person.
The commissioner of administration or the commissioner of transportation and public facilities may permit a debarred person to participate in a contract on a limited basis during the debarment period if the commissioner determines in writing that the participation is advantageous to the state. The determination shall specify the factors on which it is based and the limits imposed on the debarred person.


Sec. 36.30.670. Hearing procedures.
 (a) The chief administrative law judge (AS 44.64.010) shall assign an administrative law judge to act as a hearing officer for a hearing conducted under this chapter. The hearing officer shall arrange for a prompt hearing and notify the parties in writing of the time and place of the hearing. The hearing shall be conducted in an informal manner. The provisions of AS 44.62 (Administrative Procedure Act) do not apply to a hearing conducted under this chapter.

 (b) The hearing officer may
     (1) hold prehearing conferences to settle, simplify, or identify the issues in a proceeding, or to consider other matters that may aid in the expeditious disposition of the proceeding;

     (2) require parties to state their positions concerning the various issues in the proceeding;

     (3) require parties to produce for examination those relevant witnesses and documents under their control;

     (4) rule on motions and other procedural matters;

     (5) regulate the course of the hearing and conduct of the participants;

     (6) establish time limits for submission of motions or memoranda;

     (7) impose appropriate sanctions against a person who fails to obey an order of the hearing officer, including
          (A) prohibiting the person from asserting or opposing designated claims or defenses or introducing designated matters into evidence;

          (B) excluding all testimony of an unresponsive or evasive witness; and

          (C) excluding a person from further participation in the hearing;

     (8) take official notice of a material fact not appearing in evidence, if the fact is among the traditional matters subject to judicial notice;

     (9) administer oaths or affirmations.

 (c) A transcribed record of the hearing shall be made available at cost to a party that requests it.




Sec. 36.30.675. Recommended decision and commissioner action.
 (a) The hearing officer shall recommend a decision to the commissioner of administration or the commissioner of transportation and public facilities, as appropriate, based on the evidence presented. The recommendation must include findings of fact and conclusions of law.

 (b) The commissioner of administration or the commissioner of transportation and public facilities may affirm, modify, or reject the hearing officer’s recommendation in whole or in part, may remand the matter to the hearing officer with instructions, or take other appropriate action.


Sec. 36.30.680. Final decision by the commissioner.
A decision by the commissioner of administration or the commissioner of transportation and public facilities after a hearing under this chapter is final. A decision shall be sent within 20 days after the hearing to all parties by personal service or certified mail, except that a decision by the commissioner of transportation and public facilities involving procurement of construction shall be sent to all parties by personal service or certified mail within 45 days after receipt by the commissioner of transportation and public facilities of the hearing officer’s decision.


Sec. 36.30.685. Judicial appeal.
 (a) A final decision of the commissioner of administration or the commissioner of transportation and public facilities under AS 36.30.610, 36.30.635(a), 36.30.650, or 36.30.680 may be appealed to the superior court in accordance with the Alaska Rules of Appellate Procedure.

 (b) A final decision of the commissioner of administration or the commissioner of transportation and public facilities under AS 36.30.630(b) may be appealed to the superior court for a trial de novo.




Sec. 36.30.687. Misrepresentations, fraud, and attempted fraud.
 (a) A person who makes or uses in support of a contract claim under this chapter, a misrepresentation, or who practices or attempts to practice a fraud, at any stage of proceedings relating to a procurement or contract claim under this chapter
     (1) forfeits all claims relating to that procurement or contract; and

     (2) is liable to the state for reimbursement of all sums paid on the claim, for all costs attributable to review of the claim, and for a civil penalty equal to the amount by which the claim is misrepresented.

 (b) The procurement officer, commissioner or court shall make specific findings of misrepresentation, attempted fraud, or fraud before declaring a forfeiture under (a)(1) of this section.

 (c) Suits to recover costs and penalties under (a)(2) of this section must be commenced within six years after the discovery of the misrepresentation, fraud, or attempted fraud.

 (d) A person who in a matter relating to a procurement or a contract claim under this chapter makes a misrepresentation to the state through a trick, scheme, or device is guilty of a class C felony.

 (e) In this section, “misrepresentation” means a false or misleading statement of material fact, or conduct intended to deceive or mislead concerning material fact, whether it succeeds in deceiving or misleading.




Sec. 36.30.690. Exclusive remedy.
Notwithstanding AS 44.77 or other law to the contrary, AS 36.30.560 — 36.30.699 and regulations adopted under those sections provide the exclusive procedure for asserting a claim against an agency arising in relation to a procurement under this chapter.


Sec. 36.30.695. Other rules of procedure.
 (a) The commissioner may adopt by regulation additional rules of procedure providing for the expeditious arbitration, hearing, and other administrative review of all contract claims, both before the contracting agency and through an appeal heard de novo.

 (b) Except as provided by (c) of this section, an arbitrator shall issue a final decision, and a hearing officer shall issue a recommended decision, within the following time limits after the date the record on the claim is closed:
     (1) 30 calendar days for a claim of less than $100,000;

     (2) 45 calendar days for a claim of $100,000 or more but less than $1,000,000; or

     (3) 60 calendar days for a claim of $1,000,000 or more.

 (c) The commissioner of administration or the commissioner of transportation and public facilities may, for good cause shown, grant an arbitrator or a hearing officer additional time to issue a decision.

 (d) If an arbitrator or hearing officer fails to issue a decision within the time allowed for a decision under (b) or (c) of this section, the arbitrator or hearing officer is disqualified from acting as an arbitrator or hearing officer in another proceeding under this chapter for one year after the decision is issued.

 (e) The venue for an arbitration or hearing under this chapter is the judicial district where the office of the contracting agency is located, unless the agency and the contractor agree on another location.

 (f) If a party fails to appear at a proceeding under this chapter, the arbitrator or hearing officer may proceed in the party’s absence.

 (g) Subject to appropriation, any money awarded by an arbitrator’s decision shall be paid within 45 days after the date that the arbitrator’s decision is final. Subject to appropriation, any money awarded by a hearing officer’s recommended decision that is approved by the commissioner of transportation and public facilities shall be paid within 45 days after the date that the commissioner’s decision is delivered to the contractor and the agency, unless the commissioner’s decision is appealed under AS 36.30.685.




Sec. 36.30.699. Definition.
In AS 36.30.560 — 36.30.695, “interested party” means an actual or prospective bidder or offeror whose economic interest may be affected substantially and directly by the issuance of a contract solicitation, the award of a contract, or the failure to award a contract; whether an actual or prospective bidder or offeror has an economic interest depends on the circumstances.


Article 9. Intergovernmental Relations.


Sec. 36.30.700. Cooperative purchasing authorized.
A public procurement unit may either participate in, sponsor, conduct, or administer a cooperative purchasing agreement for the procurement of supplies, services, professional services, or construction with one or more public procurement units or external procurement activities in accordance with an agreement entered into between the participants. Cooperative purchasing may include joint or multi-party contracts between public procurement units and open-ended state public procurement units contracts that are made available to local public procurement units.


Sec. 36.30.710. Interagency sale, acquisition, and use of supplies and services.
 (a) A public procurement unit may sell to, acquire from, or use any supplies belonging to another public procurement unit or external procurement activity independent of the requirements of AS 36.30.060 and 36.30.100 — 36.30.260.

 (b) A public procurement unit may enter into an agreement, independent of the requirements of AS 36.30.060 and 36.30.100 — 36.30.260, with another public procurement unit or external procurement activity for the cooperative use of supplies or services under the terms agreed upon between the parties.




Sec. 36.30.720. Joint use or lease of facilities and equipment.
A public procurement unit may enter into agreements for the common use or lease of warehousing facilities, capital equipment, and other facilities with another public procurement unit or an external procurement activity under the terms agreed upon between the parties.


Sec. 36.30.730. Supply of personnel, services, and other items.
 (a) A public procurement unit may, upon written request from another public procurement unit or external procurement activity, provide personnel to the requesting public procurement unit or external procurement activity. The public procurement unit or external procurement activity making the request shall pay the public procurement unit providing the personnel the direct and indirect cost of furnishing the personnel, in accordance with an agreement between the parties.

 (b) The informational, technical, and other services of a public procurement unit may be made available to another public procurement unit or external procurement activity except that the requirements of the public procurement unit tendering the services has precedence over the requesting public procurement unit or external procurement activity. The requesting public procurement unit or external procurement activity shall pay for the expenses of the services so provided, in accordance with an agreement between the parties.

 (c) Upon request, the commissioner may make available to public procurement units or external procurement activities the following services, among others:
     (1) standard forms;

     (2) printed manuals;

     (3) product specifications and standards;

     (4) quality assurance testing services and methods;

     (5) qualified products lists;

     (6) source information;

     (7) common use commodities listings;

     (8) supplier performance ratings;

     (9) lists of persons debarred or suspended from consideration for award of state contracts;

     (10) forms for invitations for bids, requests for proposals, instructions to bidders, general contract provisions, and other contract forms; and

     (11) contracts or published summaries of them, including price and time of delivery information.

 (d) The commissioner may provide the following technical services, among others:
     (1) development of product specifications;

     (2) development of quality assurance test methods, including receiving, inspection, and acceptance procedures;

     (3) use of product testing and inspection facilities; and

     (4) use of personnel training programs.

 (e) The commissioner may enter into contractual arrangements and publish a schedule of fees for the services provided under (c) and (d) of this section.

 (f) [Repealed, § 28 ch 90 SLA 1991.]




Sec. 36.30.735. Restriction on contracting with or employing experts on radiation hazards.
 (a) Except for the Department of Health and Social Services, the Department of Labor and Workforce Development, the Department of Environmental Conservation, and the Department of Military and Veterans’ Affairs, a state agency may not
     (1) contract, other than with the Department of Health and Social Services, to have services performed that require expertise in determining or reducing the hazards of radiation; or

     (2) employ a person whose duties require expertise in determining or reducing the hazards of radiation.

 (b) In this section, “state agency”
     (1) means a state department or agency, whether in the legislative, judicial, or executive branch;

     (2) does not include the University of Alaska, a municipality, or an agency of a municipality.

 (c) In this section, “radiation” does not include radiation emitted from a Federal Communications Commission licensed facility emitting radiation of a wave length longer than one centimeter and an average power output not exceeding two kilowatts.




Sec. 36.30.740. Information relating to procurement needs.
To the extent possible, the commissioner may collect information concerning the type, cost, quality, and quantity of commonly used supplies, equipment for the state fleet, services, or construction being procured or used by state public procurement units. The commissioner may also collect this information from local public procurement units. The commissioner may make this information available to a public procurement unit upon request.


Sec. 36.30.750. Contract claims of other procurement units.
 (a) Under a cooperative purchasing agreement, claims arising between an administering public procurement unit and its bidders, offerors, or contractors shall be resolved in accordance with AS 36.30.560 — 36.30.699.

 (b) A local public procurement unit that is not subject to AS 36.30.560 — 36.30.699 may enter into an agreement with another local public procurement unit or external procurement activity to establish procedures or use that unit’s or activity’s existing procedures to resolve claims with contractors, whether or not the claim arose under a cooperative purchasing agreement.




Sec. 36.30.790. Definitions.
In AS 36.30.700 — 36.30.790,
     (1) “cooperative purchasing” means procurement conducted by, or on behalf of, more than one public procurement unit, or by a public procurement unit with an external procurement activity;

     (2) “external procurement activity” means a buying organization not located in this state that, if located in this state, would qualify as a public procurement unit; an agency of the United States is an external procurement activity;

     (3) “local public procurement unit” means a municipality or other subdivision of the state or other entity that expends public funds for the procurement of supplies, services, professional services, and construction, and any nonprofit corporation operating a charitable hospital;

     (4) “public procurement unit” means either a local public procurement unit or a state public procurement unit;

     (5) “state public procurement unit” means the Department of Administration and any other contracting agency of the state.




Article 10. General Provisions.


Sec. 36.30.850. Application of this chapter.
 (a) This chapter applies only to contracts solicited or entered into after January 1, 1988, unless the parties agree to its application to a contract solicited or entered into before that date.

 (b) This chapter applies to every expenditure of state money by the state, acting through an agency, under a contract, except that this chapter does not apply to
     (1) grants;

     (2) contracts for professional witnesses to provide for professional services or testimony relating to
          (A) existing or probable lawsuits in which the state is or may become a party; or

          (B) litigation in which the Public Defender Agency or the office of public advocacy has been appointed to represent a person;

     (3) contracts of the University of Alaska where the work is to be performed substantially by students enrolled in the university;

     (4) contracts for medical doctors and dentists;

     (5) acquisitions or disposals of real property or interest in real property, except as provided in AS 36.30.080 and 36.30.085;

     (6) disposals under AS 38.05;

     (7) contracts for the transportation of ballots under AS 15;

     (8) acquisitions or disposals of property and other contracts relating to airports under AS 02.15.070, 02.15.090, 02.15.091, and AS 44.88;

     (9) disposals of obsolete property under AS 19.05.060;

     (10) disposals of obsolete material or equipment under AS 35.20.060;

     (11) agreements with providers of services under AS 47.25.071 — 47.25.095; AS 47.07; AS 47.08; AS 47.10; AS 47.12; AS 47.14; AS 47.17; AS 47.24; and AS 47.27, including contractors under AS 47.27.050;

     (12) contracts of the Department of Fish and Game for flights that involve specialized flying and piloting skills and are not point-to-point;

     (13) purchases of income-producing assets for the state treasury or a public corporation of the state;

     (14) a contract that is a delegation, in whole or in part, of investment powers held by
          (A) the commissioner of revenue under AS 14.42.200, 14.42.210, AS 18.56.095, AS 37.10.070, 37.10.071, or AS 37.14;

          (B) the Board of Regents of the University of Alaska under AS 14.40.250 — 14.40.491;

     (15) a contract that is a delegation, in whole or in part, of investment powers or fiduciary duties of
          (A) the Board of Trustees of the Alaska Permanent Fund Corporation under AS 37.13;

          (B) the Alaska Mental Health Trust Authority under AS 37.14.001 — 37.14.099;

     (16) the purchase of books, book binding services, newspapers, periodicals, audio-visual materials, network information services access, approval plans, professional memberships, archival materials, objects of art, and items for museum or archival acquisition having cultural, historical, or archaeological significance; in this paragraph
          (A) “approval plans” means book selection services in which current book titles meeting an agency’s customized specifications are provided to the agency subject to the right of the agency to return those books that do not meet with the agency’s approval;

          (B) “archival materials” means the noncurrent records of an agency that are preserved after appraisal because of their value;

          (C) “audio-visual materials” means nonbook prerecorded materials, including records, tapes, slides, transparencies, films, filmstrips, cassettes, videos, compact discs, laser discs, and items that require the use of equipment to render them usable;

          (D) “network information services” means a group of resources from which cataloging information, holdings records, inter-library loans, acquisitions information, and other reference resources can be obtained;

     (17) contracts for the purchase of standardized examinations for licensure under AS 08;

     (18) contracts for home health care provided under regulations adopted by the Department of Health and Social Services and for adult residential care services provided under regulations adopted by the Department of Health and Social Services or by the Department of Administration;

     (19) contracts for supplies or services for research projects funded by money received from the federal government or private grants;

     (20) guest speakers or performers for an educational or cultural activity;

     (21) contracts of the Alaska Industrial Development and Export Authority for a clean coal technology demonstration project that
          (A) is attempting to develop a coal-fired electric generation project;

          (B) uses technology that is capable of commercialization during the 1990’s; and

          (C) qualifies for federal financial participation under P.L. 99-190 as amended;

     (22) operation and protection of assets or disposals of equipment and supplies acquired through foreclosure or other legal proceedings relating to loans issued under AS 03.10;

     (23) purchases of curatorial and conservation services to maintain, preserve, and interpret
          (A) objects of art; and

          (B) items having cultural, historical, or archaeological significance to the state;

     (24) acquisition of confidential seismic survey data necessary for pre-sale oil and gas lease or gas only lease analyses under AS 38.05.180;

     (25) contracts for village public safety officers;

     (26) purchases of supplies and services to support the operations of the Alaska state troopers or law enforcement officers engaged in fish and wildlife protection if the procurement officer for the Department of Public Safety makes a written determination that publicity of the purchases would jeopardize the safety of personnel or the success of a covert operation;

     (27) expenditures when rates are set by law or ordinance;

     (28) construction of new vessels by the Department of Transportation and Public Facilities for the Alaska marine highway system;

     (29) contracts entered into with a regional development organization; in this paragraph, “regional development organization” means a nonprofit organization or nonprofit corporation formed to encourage economic development within a particular region of the state that includes the entire area of each municipality within that region and that has a board of directors that represents the region’s economic, political, and social interests;

     (30) contracts that are to be performed in an area outside of the country and that require a knowledge of the customs, procedures, rules, or laws of the area;

     (31) contracts that are between the
          (A) Department of Law and attorneys who are not employed by the state and that are for the review or prosecution of possible violations of the criminal law of the state in situations where the attorney general concludes that an actual or potential conflict of interest makes it inappropriate for the Department of Law to review or prosecute the possible violations; and

          (B) Public Defender Agency or the office of public advocacy and attorneys who are not employed by the state and that are for the review or defense of possible violations of the criminal law of the state in situations where the public defender or the director of the office of public advocacy concludes that an actual or potential conflict of interest makes it inappropriate for the Public Defender Agency or the office of public advocacy to review or defend the possible violations;

     (32) contracts between the Department of Natural Resources and contractors qualified to evaluate hydrocarbon development, production, transportation, and economics, to assist the commissioner of natural resources in evaluating applications for royalty increases or decreases or other royalty adjustments, and evaluating the related financial and technical data, entered into under AS 38.05.180(j);

     (33) contracts of the Alaska Industrial Development and Export Authority made with the developer of an integrated transportation and port facility owned by the authority;

     (34) procurements of contracts with the media for advertising;

     (35) contracts between the state medical examiner and a provider of medical services to perform or assist in performing the duties assigned to the state medical examiner in AS 12.65.020;

     (36) contracts between the commissioner of revenue and an independent contractor under AS 43.82.240;

     (37) contracts for a convener under AS 44.62.730 or for a facilitator under AS 44.62.760 related to a negotiated regulation making process under AS 44.62.710 — 44.62.800;

     (38) grants and contracts with qualified entities for services under AS 47.18.330 for the foster care transition program;

     (39) contracts for travel services, including airplane travel, hotel accommodations, and travel agency services, but excluding motor vehicle rentals;

     (40) contracts of the Alaska Commission on Postsecondary Education or the Alaska Student Loan Corporation for the guarantee and disbursing of financial aid money to institutions of postsecondary education under the financial aid programs under AS 14.43.091 — 14.43.750 and AS 14.44.025;

     (41) contracts for an arbitration panel to determine whether a project is uneconomic under AS 43.90.240, and contracts for the development of application provisions for licensure and for the evaluation of those applications under AS 43.90;

     (42) contracts for delivery of home heating assistance under AS 47.25.626;

     (43) contracts of the Alaska Pension Obligation Bond Corporation under AS 37.16.010 — 37.16.900;

     (44) the Alaska Gasline Development Corporation (AS 31.25) and subsidiaries of the Alaska Gasline Development Corporation.

     (45) contracts for professional and technical services by the Department of Natural Resources to support the development of agreements and contracts under AS 38.05.020(b)(10) and (11);

     (46) contracts of the Department of Law developed with client participation for legal services related to an Alaska liquefied natural gas project as that project is defined in AS 31.25.390, except that, to the extent practicable, the Department of Law shall use the procurement process under AS 36.30.320 with the participation of the client.

     (47) contracts of the Department of Education and Early Development for student assessments required under AS 14.03.123 and AS 14.07.020.

     (48) a contract under AS 06.65.

 (c) Except for AS 36.30.085 and 36.30.700 — 36.30.790, this chapter does not apply to contracts between two or more agencies, the state and its political subdivisions, or the state and other governments.

 (d) Nothing in this chapter or in regulations adopted under this chapter prevents an agency or political subdivision from complying with the terms and conditions of a grant, gift, bequest, cooperative agreement, or federal assistance agreement.

 (e) [Renumbered as AS 36.30.170(i). For current law, see AS 36.30.321.]




Sec. 36.30.860. Supplementary general principles of law applicable.
Unless displaced by the particular provisions of this chapter, the principles of law and equity, including AS 45.01 — AS 45.08, AS 45.12, 45.14, and 45.29 (Uniform Commercial Code), the law merchant, and law relative to capacity to contract, agency, fraud, misrepresentation, duress, coercion, mistake, or bankruptcy shall supplement the provisions of this chapter.


Sec. 36.30.870. Adoption of regulations.
 (a) Regulations under this chapter shall be adopted in accordance with AS 44.62 (Administrative Procedure Act).

 (b) Regulations under this chapter applicable to procurements of construction or procurements for or disposal of property of the state equipment fleet shall be adopted by the commissioner of administration only after consultation with the commissioner of transportation and public facilities.

 (c) The commissioner of administration shall adopt regulations establishing the procedures for arbitration under AS 36.30.627(a), including establishing the qualifications for arbitrators and the method for appointing neutral arbitrators to conduct arbitrations.




Sec. 36.30.880. Requirement of good faith.
All parties involved in the negotiation, performance, or administration of state contracts shall act in good faith.


Sec. 36.30.890. Federal funds or assistance.
If a procurement involves the expenditure of federal funds or federal assistance and there is a conflict between a provision of this chapter or a regulation adopted under a provision of this chapter and a federal statute, regulation, policy, or requirement, the federal statute, regulation, policy, or requirement shall prevail.


Sec. 36.30.900. Product preferences. [Repealed, § 48 ch 137 SLA 1996.]
Sec. 36.30.910. Purchases through general services administration.
Notwithstanding any other provision of this chapter, purchasing through the general services administration or from federal supply schedules of the general services administration may be made without competitive sealed bidding, competitive sealed proposals, or other competition, so long as the purchasing is from persons located in the state in accordance with regulations adopted by the commissioner for purchases under this section and as provided under 41 U.S.C. 251 — 266.


Sec. 36.30.920. Reporting of anticompetitive practices.
When for any reason collusion or other anticompetitive practices are suspected among bidders or offerors, a notice of the relevant facts shall be transmitted to the attorney general by the person who suspects the collusion or other anticompetitive practices.


Sec. 36.30.930. Civil and criminal penalties.
The following penalties apply to violations of this chapter:
     (1) a person who contracts for or purchases supplies, equipment for the state fleet, services, professional services, or construction in a manner the person knows to be contrary to the requirements of this chapter or the regulations adopted under this chapter is liable for all costs and damages to the state arising out of the violation;

     (2) a person who intentionally or knowingly contracts for or purchases supplies, equipment for the state fleet, services, professional services, or construction under a scheme or artifice to avoid the requirements of this chapter is guilty of a class C felony.




Sec. 36.30.940. Enforcement.
The attorney general on behalf of the state shall enforce the provisions of this chapter.


Sec. 36.30.950. Severability.
If any provision of this chapter or any application of this chapter to any person or circumstance is held invalid, the invalidity does not affect other provisions or applications of this chapter that can be given effect without the invalid provision or application, and to this end the provisions of this chapter are declared severable.


Sec. 36.30.990. Definitions.
In this chapter, unless the context in which a term is used clearly requires a different meaning or a different definition is prescribed for a particular provision,
     (1) “agency”
          (A) means a department, institution, board, commission, division, authority, public corporation, the Alaska Pioneers’ Home, the Alaska Veterans’ Home, or other administrative unit of the executive branch of state government;

          (B) does not include
               (i) the University of Alaska;

               (ii) the Alaska Railroad Corporation;

               (iii) the Alaska Housing Finance Corporation;

               (iv) a regional Native housing authority created under AS 18.55.996 or a regional electrical authority created under AS 18.57.020;

               (v) the Department of Transportation and Public Facilities, in regard to the repair, maintenance, and reconstruction of vessels, docking facilities, and passenger and vehicle transfer facilities of the Alaska marine highway system;

               (vi) the Alaska Aerospace Corporation;

               (vii) the Alaska Retirement Management Board;

               (viii) the Alaska Seafood Marketing Institute;

               (ix) the Alaska children’s trust and the Alaska Children’s Trust Board;

               (x) the Alaska Industrial Development and Export Authority;

     (2) “Alaska bidder” means a person who
          (A) holds a current Alaska business license;

          (B) submits a bid or proposal for goods, services, or construction under the name appearing on the person’s current Alaska business license;

          (C) has maintained a place of business in the state staffed by the bidder or offeror or an employee of the bidder or offeror for a period of six months immediately preceding the date of the bid or proposal;

          (D) is incorporated or qualified to do business under the laws of the state, is a sole proprietorship and the proprietor is a resident of the state, is a limited liability company organized under AS 10.50 and all members are residents of the state, or is a partnership under former AS 32.05, AS 32.06, or AS 32.11 and all partners are residents of the state; and

          (E) if a joint venture, is composed entirely of ventures that qualify under (A) — (D) of this paragraph;

     (3) “change order” means a written order signed by the procurement officer, directing the contractor to make changes that the changes clause of the contract authorizes the procurement officer to order without the consent of the contractor;

     (4) “commissioner” means the commissioner of administration;

     (5) “competitive sealed bidding” means the procedure under AS 36.30.100 — 36.30.190;

     (6) “competitive sealed proposals” means the procedure under AS 36.30.200 — 36.30.260;

     (7) “construction” means the process of building, altering, repairing, maintaining, improving, or demolishing a public highway, structure, building, or other public improvement of any kind to real property other than privately owned real property leased for the use of agencies; it includes services and professional services relating to planning and design required for the construction; it does not include the routine operation of a public improvement to real property nor does it include the construction of public housing;

     (8) “contract” means all types of state agreements, regardless of what they may be called, for the procurement or disposal of supplies, equipment for the state fleet, services, professional services, or construction;

     (9) “contract modification” means a written alteration in specifications, delivery point, rate of delivery, period of performance, price, quantity, or other provisions of a contract accomplished by mutual action of the parties to the contract;

     (10) “department” means the Department of Administration;

     (11) “design-build construction contract” means a contract to provide construction in accordance with a design provided by the contractor;

     (12) “employment program” means a nonprofit program to increase employment opportunities for individuals with physical or mental disabilities that constitute substantial barriers to employment;

     (13) “grant” means property furnished by the state, whether real or personal, designated by law, including an appropriation Act, as a grant;

     (14) “hearing” does not include a hearing in an arbitration;

     (15) “in writing” has the meaning given to “written” in this section;

     (16) “lease-financing agreement” means a lease-purchase agreement that secures or is related to financing instruments of the lessor, including revenue bonds or certificates of participation;

     (17) “lease-purchase agreement” means a lease that
          (A) transfers ownership of the property to the lessee by the end of the lease term;

          (B) contains a purchase option at a price less than the fair market value of the property on the date the option is exercisable;

          (C) has a term, at inception, equal to 75 percent or more of the economic life of the property; or

          (D) contains minimum lease payments, including minimum lease payments during a renewal provided for in the agreement, whose present value at the inception of the agreement equals 90 percent or more of the fair market value at the inception of the agreement of the real property that is the subject of the agreement; the present value shall be determined by using as a discount rate the most recent Bond Buyer 20-Bond G.O. Index;

     (18) “person” means a business, individual, union, committee, club, other organization, or group of individuals;

     (19) “procurement” means buying, purchasing, renting, leasing, or otherwise acquiring supplies, equipment for the state fleet, services, or construction; it also includes functions that pertain to the obtaining of a supply, equipment for the state fleet, service, or construction, including description of requirements, selection and solicitation of sources, preparation and award of contract, and all phases of contract administration;

     (20) “procurement officer” means a person authorized to enter into and administer contracts for an agency and make written determinations with respect to them; it also includes an authorized representative of a procurement officer acting within the limits of authority;

     (21) “professional services” means professional, technical, or consultant’s services that are predominantly intellectual in character, result in the production of a report or the completion of a task, and include analysis, evaluation, prediction, planning, or recommendation;

     (22) “public building” means improved real property leased to the state for governmental, public, or educational use, but does not include improved real property owned by the University of Alaska Heating Corporation and leased to the University of Alaska for a purpose within the scope, as of July 1, 1986, of the heating corporation’s charter;

     (23) “services” means the furnishing of labor, time, or effort by a contractor, not involving the delivery of a specific end product other than reports that are merely incidental to the required performance; it does not include employment agreements or collective bargaining agreements;

     (24) “state money” means any money appropriated to an agency or spent by an agency irrespective of its source, including federal assistance except as otherwise specified in AS 36.30.890, but does not include money held in trust by an agency for a person;

     (25) “state official” means a public employee, public officer, or official of an agency;

     (26) “supplies” means all property of an agency, including equipment, materials, and insurance; it includes privately owned real property leased for the use of agencies, such as office space, but does not include the acquisition or disposition of other interests in land;

     (27) “written” means the product of forming characters on paper, other materials, or viewable screens, that can be read, retrieved, and reproduced, including information that is electronically transmitted and stored.




Sec. 36.30.995. Short title.
This chapter may be cited as the State Procurement Code.


Article 1. State Marine Vessel Maintenance.


Chapter 90. Miscellaneous Provisions.

Sec. 36.90.001. [Renumbered as AS 36.90.010.]
Sec. 36.90.010. Public construction contract payments. [Repealed, § 3 ch 137 SLA 1990.]
Sec. 36.90.049. Maintenance of state marine vessels.
 (a) A marine vessel owned by the state shall be maintained and repaired at a shipyard facility located in the state unless the commissioner of the department that operates the marine vessel determines in writing that there is no shipyard facility located in the state that is equipped or qualified to perform the particular maintenance or repair required, or, after taking into consideration the five percent preference under AS 36.30.321(a) and the interport differential, that the proposed cost of the maintenance or repair work is unreasonable. A detailed list of the costs and factors considered in calculating the interport differential must be provided to each person who expresses an interest in submitting a bid to perform maintenance or repair work on a marine vessel owned by the state.

 (b) The competitive bid provisions of AS 36.30 do not apply to a contract for the maintenance or repair of a marine vessel owned by the state if the contract is awarded to a shipyard facility in the state.

 (c) The commissioner of the department that operates a marine vessel shall adopt regulations establishing the criteria that the department shall use to determine whether the cost of maintenance or repair work at a shipyard facility located in the state is reasonable under (a) of this section. The commissioner of the department that operates a marine vessel shall designate by regulation the designated base port for each vessel operated by the department; however, the designated base port for marine vessels of the Alaska marine highway system is Ketchikan for those vessels primarily serving that portion of the state east of the longitude of Icy Cape and is Seward for those vessels primarily serving the remainder of the state. A vessel’s designated base port is the vessel’s delivery and redelivery port.

 (d) The commissioner of the department that operates a marine vessel shall adopt regulations establishing the criteria that the commissioner shall use in calculating the interport differential under this section. The criteria for calculating the interport differential must include costs incurred from the time that the vessel leaves the vessel’s designated base port to enter the shipyard facility until the time that the vessel returns to the designated base port from the shipyard facility.

 (e) In this section,
     (1) “commissioner of the department that operates the marine vessel” includes the president of the University of Alaska with regard to a vessel operated by the university;

     (2) “interport differential” includes all costs related to the performance of the maintenance or repair work of a marine vessel at a shipyard, including travel costs incurred moving the vessel from its designated base port to the shipyard, additional fuel consumption, cost of consumables including lubricants and other engine and deck stores, maintenance costs incurred during running time, cost of crew transfers including airfare between the designated base port and the shipyard, wages in travel status, crew room and board, and other interport costs identified by the commissioner of the department that operates the marine vessel.




Sec. 36.90.050. Maintenance of state marine vessels. [Repealed, § 5 ch 94 SLA 1992.]

Article 2. Professional Registration Requirements.


Sec. 36.90.100. Contracts for architectural, engineering, land surveying, or landscape architectural services.
The state or a municipality may not award a contract for architectural, engineering, land surveying, or landscape architectural services to
     (1) an individual who is not registered under AS 08.48 to perform the architectural, engineering, land surveying, or landscape architectural services required by the contract;

     (2) a partnership, except as provided by (3) of this section, that is not qualified under AS 08.48.251 to provide the architectural, engineering, land surveying, or landscape architectural services required by the contract; or

     (3) a corporation, limited liability company, or limited liability partnership that is not authorized under AS 08.48.241 to offer the architectural, engineering, land surveying, or landscape architectural services required by the contract.




Article 3. Public Construction Contract Payment.


Sec. 36.90.200. Payment deadline and interest.
 (a) The state or a political subdivision of the state shall pay the prime contractor for satisfactory performance on a public construction or public works contract within 30 calendar days of the date the state or political subdivision receives a payment request from the prime contractor that complies with the contract. If a political subdivision is going to use grant money for the contract, the subdivision shall pay the prime contractor for satisfactory performance within 21 calendar days of the date the subdivision receives a payment request that complies with the contract or within 21 calendar days of the date the subdivision actually receives the grant money, whichever is later. If the state is going to use federal money for the contract, the state shall pay the prime contractor for satisfactory performance within 21 calendar days of the date the state receives a payment request that complies with the contract or within 21 calendar days of the date the state actually receives the federal money, whichever is later.

 (b) If the prime contractor is not paid as required by (a) of this section, the state or political subdivision shall pay interest on the unpaid amount of the required payment from the 21st calendar day after the date required for payment under (a) of this section at an interest rate that is equal to the amount set out in AS 45.45.010(a).

 (c) If part or all of a payment is going to be withheld for unsatisfactory performance or if the payment request made under (a) of this section does not comply with the requirements of the contract, within eight working days after receipt of the payment request the state or political subdivision shall notify the prime contractor in writing stating specifically why part or all of the payment is being withheld and what remedial actions may be taken by the prime contractor to receive the full payment.

 (d) If the notification by the state or political subdivision required by (c) of this section does not comply with (c) of this section, the state or political subdivision shall pay interest on the withheld amount from the eighth working day after receipt of the initial payment request until the state or political subdivision provides notice that does comply with (c) of this section.

 (e) If part or all of a payment is withheld under (c) of this section, the state or political subdivision shall pay the withheld amount within 21 calendar days after the prime contractor satisfactorily completes the remedial actions identified in the notice. If a political subdivision is going to use grant money for the contract, the subdivision shall pay the prime contractor within 21 calendar days after the prime contractor satisfactorily completes the remedial actions identified in the notice or within 21 calendar days after the political subdivision actually receives the grant money, whichever is later. If the state is going to use federal money for the contract, the state shall pay the prime contractor within 21 calendar days after the prime contractor satisfactorily completes the remedial actions identified in the notice, or within 21 calendar days after the subdivision actually receives the money, whichever is later. If the withheld amount is not paid within the 21 calendar days, the state or political subdivision shall pay interest on the withheld amount from the 21st calendar day at an interest rate that is equal to the amount set out in AS 45.45.010(a).

 (f) The obligation to pay interest under this section does not apply to retainage.

 (g) This section does not apply to public construction or public works contracts made by a political subdivision that has a population under 800.




Sec. 36.90.210. Required contractual terms.
 (a) The prime contractor and a subcontractor on a public construction or public works contract must include in a subcontract between the prime contractor and subcontractor for the public construction or public works a clause that requires the prime contractor to pay
     (1) the subcontractor for satisfactory performance under the subcontract within eight working days after receiving payment from which the subcontractor is to be paid;

     (2) the subcontractor all retainage due under the subcontract within eight working days after final payment is received from the state or political subdivision or after the notice period under AS 36.25.020(b) expires, whichever is later;

     (3) the subcontractor interest on an amount that is not paid in accordance with (1) of this subsection for the period beginning on the day after the required payment date and ending on the day on which payment of the amount due is made; the interest shall be computed at an interest rate that is equal to the amount set out in AS 45.45.010(a);

     (4) interest on retainage withheld from the subcontractor at an interest rate that is equal to the amount set out in AS 45.45.010(a).

 (b) A subcontractor on a public construction or public works contract must include in each subcontract under which a person agrees to provide the subcontractor with services, other than as an employee, or supplies to be used in the public construction or public works project a clause that requires the subcontractor to pay
     (1) the person for satisfactory performance under the subcontract within eight working days after receiving payment from which the person is to be paid;

     (2) the person all retainage due under the subcontract with the person within eight working days after the subcontractor receives its share of the state-held retainage from the prime contractor or another subcontractor;

     (3) the person interest on an amount that is not paid in accordance with (1) of this subsection for the period beginning on the day after the required payment date and ending on the day on which payment of the amount due is made; the interest shall be computed at an interest rate that is equal to the amount set out in AS 45.45.010(a);

     (4) interest on retainage withheld from the person at an interest rate that is equal to the amount set out in AS 45.45.010(a).




Sec. 36.90.220. Optional contractual terms.
Notwithstanding AS 36.90.210 and 36.90.230, the prime contractor or a subcontractor may negotiate and include in a public construction or public works subcontract a provision that permits
     (1) the prime contractor or a subcontractor to determine that part or all of a subcontractor’s request for payment may be withheld for unsatisfactory performance under the subcontract; and

     (2) the prime contractor or a subcontractor to withhold payment for unsatisfactory performance without incurring an obligation to pay interest for late payment, if a notice complying with AS 36.90.240 has been previously furnished to the subcontractor and a copy of the notice is furnished to the contracting officer of the state or political subdivision.




Sec. 36.90.230. Withholding payment for unsatisfactory performance.
 (a) If the prime contractor on a public construction or public works contract, after making a request for payment to the state or political subdivision but before paying a subcontractor for the subcontractor’s performance covered by the payment request, discovers that part or all of the payment otherwise due to the subcontractor is subject to withholding from the subcontractor under the subcontract for unsatisfactory performance, the prime contractor may withhold the amount as allowed under the subcontract. If the prime contractor withholds an amount under this subsection, the prime contractor shall
     (1) give the subcontractor a notice complying with AS 36.90.240 as soon as practicable after determing the cause for the withholding but before the due date for the subcontractor payment;

     (2) give the contracting officer of the state or political subdivision a copy of the notice furnished to the subcontractor under (1) of this subsection;

     (3) pay the subcontractor within eight working days after correction of the identified subcontractor performance deficiency.

 (b) If the prime contractor does not comply with the notice and payment requirements of (a) of this section, the contractor shall pay the subcontractor interest on the withheld amount from the eighth working day at an interest rate that is equal to the amount set out in AS 45.45.010(a).




Sec. 36.90.240. Form of certain notices.
A notice under AS 36.90.220(2) or 36.90.230(a)(1) must be in writing and must state the amount being withheld, the specific causes for the withholding under the terms of the subcontract, and the remedial actions to be taken by the subcontractor to receive payment of the amount withheld.


Sec. 36.90.250. Retainage.
 (a) The state or a political subdivision of the state shall pay to the prime contractor interest on retainage, including warranty retainage, on a contract for public construction or public works at an interest rate that is equal to the amount set out in AS 45.45.010(a). Interest on retainage accrues from the date of approval of a pay request until the date of payment to the contractor.

 (b) A political subdivision that has a population of 500 or less is exempt from the payment of interest under (a) of this section.




Sec. 36.90.260. Miscellaneous provisions.
 (a) In AS 36.90.210 — 36.90.290,
     (1) a payment is considered to be made when mailed or personally delivered to the party being paid;

     (2) a payment is considered to be received when it is endorsed for payment, if it is a check;

     (3) an invoice is considered to be received when it is date-stamped or otherwise marked as delivered; if the invoice is not date-stamped or otherwise marked as delivered, the date of the invoice is considered to be the date when the invoice is received.

 (b) A political subdivision that receives a state grant for a public construction or public works project may use money from the state grant to pay the interest under AS 36.90.200 — 36.90.290.




Sec. 36.90.265. Applicability to political subdivisions.
AS 36.90.200 — 36.90.290 apply to a public construction or public works contract of a political subdivision if the political subdivision has entered into a written contract with the state for the state to provide funds for the public construction or public work.


Sec. 36.90.270. Waiver of provisions prohibited.
A contract provision that waives a provision required by AS 36.90.200 — 36.90.290 is void.


Sec. 36.90.290. Definitions.
In AS 36.90.200 — 36.90.290,
     (1) “prime contractor” means a person required to be registered as a contractor under AS 08.18 who has a contract with the state or a political subdivision of the state to provide materials or services, other than as an employee, for a public construction or public works project;

     (2) “subcontractor” means a person at any level, other than a prime contractor, who provides materials or services, other than as an employee, to be used in a public construction or public works project;

     (3) “working day” does not include a Saturday, Sunday, or a state holiday.




Article 4. Required Contract Provision.


Sec. 36.90.300. Indemnification, defense, and hold harmless provision in certain construction-related contracts.
 (a) A public agency shall include in a construction-related professional services contract entered into by the public agency a provision under which the consultant agrees to indemnify, defend, and hold harmless the public agency from claims or liability for the negligent acts, errors, or omissions of the consultant. The provision must include an apportionment of the indemnification, defense, and hold harmless obligation on a comparative fault basis.

 (b) A provision that reads substantially as follows satisfies the requirement of (a) of this section:
     The consultant shall indemnify, defend, and hold harmless the contracting agency from and against any claim of, or liability for, negligent acts, errors, and omissions of the consultant under this agreement. The consultant is not required to indemnify, defend, or hold harmless the contracting agency for a claim of, or liability for, the independent negligent acts, errors, and omissions of the contracting agency. If there is a claim of, or liability for, a joint negligent act, error, or omission of the consultant and the contracting agency, the indemnification, defense, and hold harmless obligation of this provision shall be apportioned on a comparative fault basis. In this provision, “consultant” and “contracting agency” include the employees, agents, and contractors who are directly responsible, respectively, to each. In this provision, “independent negligent acts, errors, and omissions” means negligence other than in the contracting agency”s selection, administration, monitoring, or controlling of the consultant, or in approving or accepting the consultant”s work.           (c) In this section,
     (1) “construction” means the process of building, altering, repairing, maintaining, improving, demolishing, planning, and designing a public highway, a structure, a building, a utility, infrastructure, or another public improvement to real property, but does not mean the routine operation of a public improvement;

     (2) “consultant” means a person who contracts with a public agency to provide professional services;

     (3) “professional services” has the meaning given in AS 36.30.990;

     (4) “public agency” means a department, institution, board, commission, division, authority, public corporation, committee, school district, political subdivision, or other administrative unit of a municipality, of a political subdivision, or of the executive or legislative branch of state government, including the University of Alaska, the Alaska Aerospace Corporation, the Alaska Housing Finance Corporation, the Alaska Industrial Development and Export Authority, the Alaska Energy Authority, the Alaska Railroad Corporation, and a regional educational attendance area.




Chapter 95. General Provisions.

Sec. 36.95.010. Definitions.
In this title, unless the context requires otherwise,
     (1) “contractor” means the contractor including subcontractors performing work necessary to facilitate public construction;

     (2) “laborer, mechanic, or field surveyor” means a person who engages in work that is basically physical or unskilled in nature; or who engages in work, requiring the use of tools or machines, that basically consists of the shaping and working of materials into some type of structure, machine, or other object; or who engages in outdoor tasks related to the operation of findings and delineating contour, dimensions, position, topography, as of any part of the earth’s surface, by preparation of measured plan or description of any area or other portion of country or of road or line through any area or other portion of country;

     (3) “public construction” or “public works” means the on-site field surveying, erection, rehabilitation, alteration, extension or repair, including painting or redecorating of buildings, highways, or other improvements to real property under contract for the state, a political subdivision of the state, or a regional school board;

     (4) “resident” means a person who establishes residency under AS 01.10.055;

     (5) “retainage” means money withheld from a contractor until completion of a contract or satisfaction of other contingency as evidenced by approval of the applicable pay estimate;

     (6) “state or a political subdivision of the state” means any state department, state agency, state university, borough, city, village, school district or other state subdivision;

     (7) “wages” includes fringe benefits.




Chapter 98. Professional Services Contracts.

[Repealed, § 67 ch 106 SLA 1986.]

Title 37. Public Finance.