Judge says state violated its own procurement code

The state’s Universal Space Standards policy is already under a microscope. An administrative law judge has said the state violated its own procurement code and, as we reported last week, the state’s biggest employee union recently filed a class action grievance over the new space standards.

With the push of a button, new desks in Juneau’s State Office Building can be accommodated for sitting or standing. Publications tech Jesse Swanson likes the option.

“When my legs get restless in the afternoon, I’m able to stand up,” he says.

The sit-stand desks have been installed in the 7th floor offices of the Division of General Services. The ergonomic desks, and other new furniture, come from Capital Office, an Alaska company with offices in Juneau, Anchorage, and Fairbanks. The company was selected by General Services to be the sole furniture supplier as state office buildings across all regions adopt space standards.

The Division of General Services is the state’s leader on procurement and helps other agencies with leasing and purchasing.

Four other companies competed for the space standards furniture contract – Bowers Office Products in Fairbanks, Juneau Business Interiors, Competitive Edge in Juneau, and Arctic Office Products in Anchorage.

General Services told the companies they couldn’t protest the selection, but Bowers filed one anyway. It led to an administrative hearing – Bowers Office Products versus the Division of General Services.

The case was heard in front of Administrative Law Judge Jeffrey Friedman who said General Service’s selection of Capital Office did not comply with state procurement code.

Capital Office was selected through a process called a Request for Submissions, never before used by the state. General Services director Tom Mayer says it is similar to a Request for Proposals.

“It follows the same process. You collect costs from a vendor, you collect things you are going to analyze such as their management plan, their asset plan, their storage, their freight capabilities, and things like that. So you’re collecting data that you’re analyzing. We’re telling them how we’re going to analyze it so it essentially is an RFP.”

An RFP is part of State Procurement Code. A Request for Submissions is not.

Alaska is part of the Western States Contracting Alliance, a cooperative purchasing organization of 15 states.

The Alliance currently has contracts with four office furniture manufacturers that establish set discounts. Alaska procurement code allows the state to access these discounts through a cooperative purchasing agreement.

Administrative Law Judge Friedman said General Services didn’t simply participate in the Alliance contracts; the Request for Submissions asked dealers to supply even deeper discounts and called for other services like contract administration and warehousing plans. Friedman said that materially altered the terms of the Alliance contract. He said General Services should have entered into a new contract for furniture being purchased, one that complied with State Code.

Judge Friedman recommends the state cancel the Capital Office contract and pay Bowers Office Products its cost for preparing its proposal.

The contracts already established by the Western States Contracting Alliance allow General Services to simply choose a vendor. General Services Director Mayer explains why General Services didn’t do that.

“We wanted to give the vendors in Alaska an opportunity to compete for our projects, to have the ability to become our dealer, so we did a selection process to determine who was going to provide us the most advantageous proposal and package for everything, rather than just selecting one.”

Bowers made a verbal commitment to the state to not speak to the press during the appeal stage of the case. But at least one other company that submitted a proposal is upset with the selection process.

Arctic Office Products president Bill Borchardt has been with the company for over 40 years.

“Through one way or another we have accounts with maybe a hundred state agencies. There are many, many, many state agencies that buy from us.”

Borchardt says in all his dealings with the state, the Request for Submissions selection process was unlike anything he’s seen before.

Arctic Office Products offered a greater discount on furniture than Capital Office, but Arctic didn’t score well on the other parts of the submission, like project management.

“It was such a set-up. It was so unfair and even the legal system could figure that out,” Borchardt says.

So far, the state has purchased over $1 million worth of office furniture from Capital Office for universal space standards in state office buildings in Juneau and Anchorage.

The Bowers versus General Services case is now in the hands of Administration Commissioner Becky Hultberg. She has the final say on Judge Friedman’s proposed decision.

She can adopt, reject, adopt in part, rewrite, or send the decision back to the Office of Administrative Hearings for continued proceedings. Hultberg has until Monday to take action.