Honorable Robert Bunda

President of the Senate

Twenty-First State Legislature

Regular Session of 2001

State of Hawaii

Sir:

Your Committee on Transportation, Military Affairs and Government Operations, to which was referred S.B. No. 1199 entitled:

begs leave to report as follows:

The purpose of this measure is to provide statutory authorization for the State to enter into concession contracts by competitive sealed proposals, and to make other substantive amendments to the concession procurement law.

Your Committee received testimony in support of this measure from the Department of Transportation. Testimony in opposition was submitted by the Hawaii Government Employees Association, the Airport Concessionaires Committee, Catrala-Hawaii, and seven concessionaires operating at the Honolulu airport.

Your Committee finds that concession contracts are subject to the competitive sealed bidding process. While your Committee believes that requests for proposals can be an efficient alternative for procuring certain goods or services, there was strong opposition to allowing competitive sealed proposals for concession contracts. Therefore, your Committee amended this measure as set forth below.

First, your Committee deleted the provisions that would have allowed competitive sealed proposals for concession contracts. Your Committee also deleted the "sole source" exception to the concession procurement process, and deleted the advertising industry from the definition of "concession" so as not to subject it to the procurement process.

Your Committee also amended this measure to clarify that revocable permits can be issued by the Department for up to one year, for any reason.

As affirmed by the record of votes of the members of your Committee on Transportation, Military Affairs and Government Operations that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 1199, as amended herein, and recommends that it pass Second Reading in the form attached hereto as S.B. No. 1199, S.D. 1, and be referred to the Committee on Ways and Means.