State of Alaska Division of Legislative Audit

02-30080-15

October 21, 2015
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SUMMARY OF: A Performance Audit of the Alaska
Agricultural and Fisheries Products
Preference – Use by State Entities

Why DLA Performed This Audit

This audit was performed to determine whether the seven percent price preference designed to promote the purchase of Alaska agricultural and fisheries products is accomplishing its objective.

Report Conclusions

The Alaska agricultural and fisheries products preference does not significantly influence state entities’ decisions to purchase in-state products because food is rarely purchased directly from Alaska producers. State entities either purchase food products from wholesalers or through contracts with service organizations. To the extent in-state products are available, the audit recommends encouraging the purchase of in-state products through contractual requirements with wholesalers and service organizations.

A survey of 12 state entities identified several factors that impede the purchase of Alaska agricultural and fisheries products directly from producers. Product availability is the most common barrier. Ordering and delivery systems also limit direct purchases from local producers.

The audit reviewed the food procurement process and found that, with two exceptions, the Alaska agricultural and fisheries products preference was correctly applied in large procurements. The audit also found that three state entities incorrectly applied small procurement rules to large dollar food purchases.

An evaluation of the Nutritional Alaskan Foods in Schools program, which offers grants to school districts for Alaska food product purchases, found the program was more successful at promoting the purchase of local products than the seven percent Alaska agricultural and fisheries products preference.

Findings and Recommendations

  1. The Department of Administration’s chief procurement officer should promote the purchase of Alaska agricultural and fisheries products by educating and training state entities to include the seven percent preference in food-related contracts.
  2. The University of Alaska’s chief procurement officer should update procurement policies to include the seven percent Alaska agricultural and fisheries products price preference.
  3. The Department of Natural Resources’ administrative services director should use the formal large procurement solicitation process for Mt. McKinley Meat and Sausage Plant boxed meat purchases.
  4. The Department of Labor and Workforce Development’s administrative services director should use the formal large procurement solicitation process when aggregate Alaska Vocational Technical Center food expenditures are likely to exceed $100,000.
  5. The Department of Health and Social Services’ assistant commissioner should use the formal large procurement solicitation process when aggregate Division of Juvenile Justice food expenditures are likely to exceed $100,000.
DOA Alaska Agricultural and Fisheries Products Preference – Use by State Entities
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