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This week I offer a pair of "draw your own conclusion" articles.
Important procurement seriously flawed
Sometimes big mistakes fly under the media radar. Case in point: the process the Department of  Administration used to award a contract to a new administrator for two major state health plans. The contract is worth tens of millions of dollars.
The context is this: the department solicited bids for the administration of the health plans. One of the plans is for 5,500 active state employees and the second is for about 29,000 retirees and their dependents. Aetna, the current administrator of both plans, and Premera Blue Cross submitted proposals. In early February, the Department of Administration awarded the contract to Premera because bid officials found the incumbent's proposal, Aetna's proposal, nonresponsive.
I need to say right up front that the mistakes detailed below were made by the Department of Administration and the victims were Premera and Aetna. Both bidders worked within the very flawed framework crafted by the Department of Administration.
In a series of events that could be the basis for "Lemony Snicket's A Series of Unfortunate Events II", here's what happened:
1. last November the department issued a request for health plan administration proposals;
2. two companies, Aetna and Premera, submitted comprehensive proposals;
3. the proposals were locked in a department storage room;
4. Aetna's bid was determined to be incomplete, therefore nonresponsive, on January 6 because "critical sections were missing";
5. in early February, the Premera bid, the last one standing, was scored by a panel of three department officials;
6. a few days later, state procurement officials worked with Premera to "clarify and improve" its proposal;
7. after "pervasive" changes, a notice of intent to award to Premera was given February 18;
8. on February 21, Aetna checked with a departmental procurement official to determine what deficiencies had been found to render its proposal nonresponsive;
9. within an hour, sections the department determined were missing from Aetna's bid were found in the storeroom where the department had placed them;
10. the state rescinded the intent to award to Premera;
11. Aetna's bid was scored but, in a violation of commonsense as well as an agreement forged between the state, Premera and Aetna, only one of the three panelists who scored Premera was on the three-person panel that scored Aetna;
12. the one common scorer rated Aetna better than she rated Premera but the two newbies, who had not scored Premera, scored Aetna lower than the other member;
13. the department awarded the contract to Premera and the commissioner held a press conference before the appeal period ended and, during the press conference, incorrectly analyzed the cost savings by greatly exaggerating the differences between Premera and Aetna.
So, the department lost critical parts of a submitted proposal; after the intent to award was posted,  the state and Premera made "pervasive" changes to the Premera bid; and once Aetna's "lost" components were found, they didn't use the same team that scored Premera to score the Aetna bid. If, when I was executive director of the Alaska Seafood Marketing Institute, I had been involved in a bid process like this health plan contract, I'd have been fired by the ASMI board. And the contracts we awarded at ASMI were only worth millions—not tens of millions.
Aetna, of course, protested the process. An administrative law judge who heard the protest determined the process was extremely flawed. But the judge noted the urgency of finalizing the procurement (the current health plan contract expires at the end of this month) to maintain the welfare of the state and not harm health care recipients. "A remedy of the kind that would significantly push back the start date of the new contract would cause disruption and uncertainty with state employees and retirees" he said. He added: "if it involved a cancellation of the contract and an entirely new procurement, it would also run the risk of causing Premera to abandon the battle, leaving Aetna as the only viable competitor."
That's the judicial definition of a rock and a hard place.
So the judge, on May 16, allowed the award to go through but said the state must re-bid the contract in three years because immediately re-bidding and rescoring and possible changing of vendors (again) was expensive and disruptive. "Nonetheless," the judge said, "the seriousness of the procurement deficiency and the possibility the state chose the wrong vendor argues in favor of reopening competition at the earliest convenient time."
State jet contrails--from FAI to BLI
The governor's jet flitted as far north as Fairbanks (FAI) and as far south as Bellingham (BLI) between April 13 and May 12. Destinations in-between included Anchorage, Juneau, Kenai and Kodiak.
With two exceptions, the jet carried either Gov. Murkowski, the first lady, or both. The jet made one round tripper between Anchorage and Kodiak to pick up five public safety techs and an empty (except for two crew) round tripper between Kenai and Anchorage.
The jet brought the first lady to Juneau from Anchorage April 24; took both the governor and first  lady to Fairbanks and back to Juneau between April 28 and April 30; took the governor to Anchorage May 11; and both the governor and first lady flew the jet to Bellingham from Anchorage May 12. We assume the jet brought the couple back from Bellingham but next month's report from the Department of Public Safety will confirm that assumption, or not.
Total costs for the twin engine jet when flown during this period of time totaled $17,783 for the 11.3 hours they spent in the air. Those airtime costs include: crew costs only for the period when the jet was airborne; fuel costs; and the cost of an engine maintenance contract predicated upon $178.82 per engine for every hour the engine is wound up. Other overhead costs not counted as airtime costs include another $50,000 per year maintenance contract, on-ground crew costs, crew per diem costs, and insurance costs.
The governor and the first lady accounted for $14,062 of the total airtime costs. The cost of coach fares to all their destinations, using fares posted June 1, would have been $2,492. If they flew first class on commercial flights to the same destinations, total costs would have been $4,586.
The round trip between Anchorage and Kodiak to pick up the five public safety techs from Kodiak cost $2,213. One-way airfare between Kodiak and Anchorage for the five would have been $840.
The round tripper from Anchorage to Kenai with only crew aboard cost the difference--$1,508.
Phone: (907) 465-4947
Fax: (907) 465-2108
Mail: Sen. Kim Elton, State Capitol
Juneau, AK 99801
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Capitol Undercurrents
A pole poll--A friend in Anchorage was polled a couple of days ago. The poll was sponsored by a group called  Alaska's Best Pipeline and asked leading questions that seemed designed to get respondents to conclude that the gas pipeline contract actually will lead to a gas pipeline. One of the questions began something like this: "The North Pole producers have reached a contract with the state that will deliver a gas line. . ." We're sure the pollster really wanted to say North Slope, not North Pole, producers--especially since another person polled was told the Alaska's Best Pipeline group consisted of BP, Conoco Phillips, and Exxon Mobil. My Anchorage friend said the pollster's accent sounded Canadian. The other person polled said it sounded like the pollster was from India.
 Reaching out, far out--One of my staffers received a solicitation in the mail from a congressional candidate who wants to represent Juneau. It was a very nice letter that succinctly noted what the candidate stood for. Along with the letter was a form she could use to send a "credit card gift" to the campaign. The basic problem, though, is the candidate was seeking to represent Juneau, Wisconsin.
Prayerful message--A friend forwarded a copy of the prayer that opened the senate session May 10, 1998. It was offered by then-Senator Rick Halford, a Republican from Chugiak. "Our God, we try to resist asking Your help to get our way, but we ask that we may help to get Your way. We would, however, like it if Your way was that oil prices be high by the barrel and low by the gallon." In this special session dealing with oil taxes and gas pipelines, the Halford prayer has some resonance.
Some more AK by the numbers--The Taxpayers Network (www.taxpayersnetwork.org) every year  defines the different states by the numbers--first place is good. Here's some of what they said about Alaska in their new, 2006 edition of 50 State Comparisons: we're 18th in population growth; 16th in median housing price; 6th in median family income; 49th in percent of population below the poverty level; last in state and local tax burden as a percent of income; 6th in percent of registered voters who voted in the last presidential election; 10th in average expenditures for auto insurance; 11th in per pupil spending on education; 40th in projected high school graduation rate; 41st in teacher/student ratio for K-12; 11th in average teacher salary; 39th in state and local police and fire employees per 10,000 residents; and 10th in crime rate per 100,000 residents.
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