REPORT TITLE:
Contracts and Procurement


DESCRIPTION:
Amends procurement code to require contractors to have a written
contract prior to performing any service.  (SD2)

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                        2878
HOUSE OF REPRESENTATIVES                H.B. NO.           H.D. 2
TWENTIETH LEGISLATURE, 2000                                S.D. 2
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.  Section 103D-304, Hawaii Revised Statutes, is
 
15 amended by amending subsection (e) to read as follows:
 
16      "(e)  The head of the purchasing agency shall evaluate the
 
17 summary of qualifications for each of the persons provided by the
 
18 screening committee and may conduct additional discussions with
 
19 any of them.  The head of the purchasing agency shall then rank
 

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

 
 1 the persons in order of preference.  The head of the purchasing
 
 2 agency shall negotiate a contract with the first person,
 
 3 including a rate of compensation which is fair and reasonable,
 
 4 established in writing, and based upon the estimated value,
 
 5 scope, complexity, and nature of the services to be rendered.
 
 6 The contractor shall have a written contract prior to any service
 
 7 being performed.  If a satisfactory contract cannot be negotiated
 
 8 with the first person, negotiations with that person shall be
 
 9 formally terminated and negotiations with the second person on
 
10 the list shall commence.  Failing accord with the second person,
 
11 negotiations with the next person on the list shall commence.  If
 
12 a contract at a fair and reasonable price cannot be negotiated,
 
13 the screening committee may be asked to submit a minimum of three
 
14 additional persons for the head of the purchasing agency to rank,
 
15 and resume negotiations in the same manner provided in this
 
16 subsection.  Negotiations shall be conducted confidentially."
 
17      SECTION 3.  New statutory material is underscored.
 
18      SECTION 4.  This Act shall take effect upon its approval.