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. 1612 entitled:

begs leave to report as follows:

The purpose of this measure is to insert a new chapter into the Hawaii Revised Statutes to criminalize bid rigging, a form of contract and procurement fraud.

Your Committee received testimony in opposition to this measure from the Office of the Public Defender of the State of Hawaii.

Your Committee finds that the procurement process is designed to promote fairness in the awarding of public contracts, to ensure the fair use of public funds and that the government receives the best services available.

The procurement process is tainted when persons within it use any means to circumvent the impartiality of system. Your Committee supports this measure, which criminalizes the most common methods of subverting the procurement process from the inside. The measure creates different degrees of the crime of bid rigging, depending on the severity of the fraudulent activity.

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. 1612 and recommends that it pass Second Reading and be referred to the Committee on Judiciary.