STAND. COM. REP. NO. 2700

                                   Honolulu, Hawaii
                                                     , 2000

                                   RE:  S.B. No. 2132
                                        S.D. 2




Honorable Norman Mizuguchi
President of the Senate
Twentieth State Legislature
Regular Session of 2000
State of Hawaii

Sir:

     Your Committee on Ways and Means, to which was referred S.B.
No. 2132, S.D. 1, entitled: 

     "A BILL FOR AN ACT RELATING TO THE HAWAII PUBLIC PROCUREMENT
     CODE,"

begs leave to report as follows:

     The purpose of this bill is to strengthen the laws relating
to contractor preference and hiring on military construction
jobs.

     Your Committee finds that section 8078 of the Defense
Appropriations Act of 1986, as amended, requires contractors on
military construction jobs to employ Hawaii residents when the
State's unemployment rate exceeds the national average.  Since
1994, when this condition was met, there has been little or no
compliance with the federal law.

     Part of the problem for non-compliance has been the lack of
a functional definition of "state resident".  This bill provides
a definition of the term that will provide a clear, objective,
and measurable standard in the state procurement code for use by
federal contracting officers.

     Additionally, the bill defines the terms "state contractor"
and "state subcontractor" to ensure that contractors who are

 
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                                   STAND. COM. REP. NO. 2700
                                   Page 2


granted a bid preference are those who legitimately deserve such
preference under current law.

     Finally, the bill increases the bid preference for state
contractors from seven to fifteen per cent on state public works
contracts of $10,000,000 or less and requires a review of the bid
preference law by June 30, 2006.

     Your Committee has amended the bill by making technical
changes that have no substantive effect.

     As affirmed by the record of votes of the members of your
Committee on Ways and Means that is attached to this report, your
Committee is in accord with the intent and purpose of S.B. No.
2132, S.D. 1, as amended herein, and recommends that it pass
Third Reading in the form attached hereto as S.B. No. 2132,
S.D. 2.

                                 Respectfully submitted on behalf
                                 of the members of the Committee
                                 on Ways and Means,



                                 ________________________________
                                 CAROL FUKUNAGA, Co-Chair



                                 ________________________________
                                 ANDREW LEVIN, Co-Chair

 
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