REPORT TITLE:
Contracts and Procurement


DESCRIPTION:
Amends procurement code to require procurement officers to sign
notarized affidavits that approval to make expenditures for a
contract was obtained from the department of budget and finance;
imposes penalties upon procurement officers for issuing notices
to proceed with contract performance prior to obtaining such
approval.  (SD1)

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                        2878
HOUSE OF REPRESENTATIVES                H.B. NO.           H.D. 2
TWENTIETH LEGISLATURE, 2000                                S.D. 1
STATE OF HAWAII                                            
                                                             
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                   A  BILL  FOR  AN  ACT

RELATING TO PUBLIC CONTRACTS AND PROCUREMENT.



BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

 1      SECTION 1.  The legislature finds that it has become common
 
 2 practice with respect to state contracts, for procurement
 
 3 officers to require contractors to commence performance prior to
 
 4 obtaining approval of the contract from the department of budget
 
 5 and finance.  As a result, contractors are required to commit
 
 6 significant amounts of capital towards a project before the
 
 7 contract is approved which in turn delays payment to the
 
 8 subcontractors.
 
 9      The purpose of this Act is to protect contractors and
 
10 subcontractors on state contracts by imposing penalties on state
 
11 procurement officers who require contractors to begin work prior
 
12 to obtaining contract approval from the department of budget and
 
13 finance.
 
14      SECTION 2.  Chapter 103D, Hawaii Revised Statutes, is
 
15 amended by adding a new section to be appropriately designated
 
16 and to read as follows:
 
17      "§103D-    Pre-contractual obligations for contractors, and
 
18 procurement officers; penalties.  (a)  Prior to issuing a notice
 
19 to a contractor to proceed with performance, a procurement
 

 
Page 2                                                     2878
                                     H.B. NO.           H.D. 2
                                                        S.D. 1
                                                        

 
 1 officer awarding a state procurement contract shall execute a
 
 2 notarized affidavit that the department of budget and finance has
 
 3 approved the expenditure of funds for the contract from an
 
 4 existing appropriation.
 
 5      (b)  If the notice to proceed is issued prior to obtaining
 
 6 the approval from the department of budget and finance, the
 
 7 procurement officer shall be subject to the following penalties:
 
 8      (1)  $200 on the first offense;
 
 9      (2)  $1,000 on the second offense; and
 
10      (3)  Termination on the third offense."
 
11      SECTION 3.  New statutory material is underscored.
 
12      SECTION 4.  This Act shall take effect upon its approval.