June 6, 2019 The Honorable Zack Fields The Honorable Jonathon Kreiss-Tomkins Alaska House of Representatives Alaska House of Representatives Alaska State Capitol, Room 114 Alaska State Capitol, Room 411 Juneau, AK 99801 Juneau, AK 99801 Dear Representatives Fields and Kreiss-Tomkins: Thank you for your letter of May 30, 2019. I am happy to address your remaining question. Your letter repeats an error made in the earlier correspondence you sent. The regulation that you have now twice referenced 3 AAC 109.490 does not apply to AIDEA. Rather, the regulations in Chapter 109 of Title 3 of the Alaska Administrative Code govern the Alaska Energy Authority when it is managing grants that it has made. The scope of Chapter 109 is explained in 3 AAC 109.010: This chapter applies to procurement for construction, supplies, services, and professional services for a project conducted by the authority [the Alaska Energy Authority] in managing a grant on behalf of a grantee. AIDEA is a different public corporation than the Alaska Energy Authority, and AIDEA is not subject to the regulations adopted for the Alaska Energy Authority. Moreover, the contract AIDEA entered into with Penney Capital, Inc. is not part of any grant the Alaska Energy Authority made, and AIDEA is not managing anything on behalf of a grantee of the Alaska Energy Authority. Chapter 109 of Title 3 of the Alaska Administrative Code has no possible application to this contract. AIDEA has its own separate procurement regulations that are set out in Chapter 100 of Title 3 of the Alaska Administrative Code. In making the contract with Penney Capital, Inc., AIDEA followed the process its regulations establish for non-competitive procurements. Speci?cally, Penney Capital, Inc. received the contract from AIDEA only after AIDEA's procurement of?cer made the determination no other reasonable source for the services needed was available that could meet AIDEA's requirements and schedule. 3 AAC -- aidea.org 813 West Northern tights Boulevard Anchorage. Alaska 99503 907 771 Tall Fr? (Ala-kl Only} 383.300.8534 907 771 3044 Your letter asks whether there were no other contractors in the state with ?nancial management credentials and contacts outside Alaska. To my knowledge, there are no such contractors that were both available to provide the requested services to AIDEA and that were capable of meeting AIDEA's schedule for these services. Although there may be other ?rms or individuals with considerable ?nancial management credentials and outside contacts, those ?rms or individuals would have been required to drop their private sector work, to serve the State's interests over their private client's interests, and inunediately take on setting up the New Industry DeveIOpment Team. AIDEA has been unable to identify any ?rms or individuals with the requisite abilities and contacts who are both willing and immediately available to do this work, other than Mr. Penney's ?rm. As noted previously, delay and the consequent loss of prospective opportunities for the state underlay the award of the contract to Penney Capital, Inc. on a non-competitive basis. Delay and the loss of opportunities were why AIDEA could not put the important work of the New Industry Development Team in abeyance to go through a competitive bid process. Expanding the economic base in Alaska by bringing in new businesses and expanding existing businesses is critical to moving the state forward. Each month of delay in getting this work underway is a lost chance to attend conferences, confer with investors, and pitch to outside ?nanciers, all of which are part of the day?to-day efforts that must be pursued to gain and advance new opportunities. I trust this adequately answers your latest inquiry. Thank you again for your letter, and thank for you for all the hard work you do as legislators. AIDEA very much appreciates the support you have given us and are continuing to give us in the Alaska State Legislature. AIDEA relies on your support in order to pursue the mission the Legislature created for us of advancing economic development and employment opportunities in the State of Alaska. Sincerel Tomas H. Boutin, CEO Executive Director cc: Commissioner Julie Anderson