Establishes a procurement preference for contractors incorporated in the State that comply with all applicable state employment laws. Establishes a Procurement Institute to improve and enhance the efficiency, integrity and transparency of the State procurement process. Makes technical amendments to the sealed bidding provisions of the Procurement Code. Requires that an independent selection committee rank the applying professional service providers according to relevant criteria. Requires the awarding procurement official to negotiate award of the contract with the providers in the rank order set by the committee. Requires equal distribution of contract awards where providers hold same qualifications or ranking. Requires a pre-job conference to be held at least thirty days prior to work on a project, to be attended by the contractor, subcontractors, and union officials. (SD1)

A BILL FOR AN ACT

SECTION 1. The purpose of this Act is to establish procurement policies and procedures that:

SECTION 2. Part X of chapter 103D, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:

"103D-   Preference for state resident contractors. (a) In any contract awarded under this chapter, preference shall be given to a state resident contractor.

(b) For purposes of this section, "state resident contractor" means a contractor that is incorporated under the laws of the State and who affirms, in the contract, that the following documents are available for immediate inspection by the purchasing agency and any other duly authorized representative of the State:

(c) The preference established by this section may not be used in conjunction with the preference established under section 103D-1007.

(d) The policy board shall adopt rules under chapter 91 and may create forms to effectuate the purposes of this section."

SECTION 3. Section 103D-206, Hawaii Revised Statutes, is amended to read as follows:

"[[]103D-206[]] Additional duties of the administrator of the procurement office. In addition to the duties referred to in section 103D-205, the administrator shall:

SECTION 4. Section 103D-302, Hawaii Revised Statutes, is amended by amending subsection (f) to read as follows:

"(f) Bids shall be evaluated based on the requirements set forth in the invitation for bids. These requirements may include criteria to determine acceptability such as inspection, testing, quality, workmanship, delivery, and suitability for a particular purpose. Those criteria that will affect the bid price and be considered in evaluation for award shall be objectively measurable, such as discounts, transportation costs, and total or life cycle costs. For purposes of evaluating responsibility, invitations for bids for construction shall specify that all bids include the name of each person or firm to be engaged by the bidder as a subcontractor in the performance of the contract and the nature and scope of the work to be performed by each. Construction bidders that fail to comply with this requirement may be found not responsible under rules adopted by the policy board. The invitation for bids shall set forth the evaluation criteria to be used. No criteria may be used in bid evaluation that are not set forth in the invitation for bids."

SECTION 5. Section 103D-304, Hawaii Revised Statutes, is amended by amending subsections (b) through (g) as follows:

"(b) At a minimum, before the beginning of each fiscal year, the head of each purchasing agency shall publish a notice inviting persons engaged in providing professional services which the agency anticipates needing in the next fiscal year, to submit current statements of qualifications and expressions of interest to the agency. Additional notices [may] shall be given if:

The chief procurement officer may specify a uniform format for statements of qualifications. Persons may amend these statements by filing a new statement prior to the date designated for submission.

(c) The head of the purchasing agency shall designate a review committee consisting of a minimum of three [employees from the agency or from another governmental body,] persons with sufficient education, training, and licenses or credentials for each type of professional service which may be required. In designating the members of the review committee, the head of the purchasing agency shall ensure the impartiality and independence of committee members. The names of the members of the review committee established under this action shall be placed in the contract file.

The committee shall review and evaluate all submissions and other pertinent information, including references and reports, and prepare a list of qualified persons to provide these services. Persons included on the list of qualified persons may amend their statements of qualifications as necessary or appropriate. Persons shall immediately inform the head of the purchasing agency of any change in information furnished which would disqualify the person from being considered for a contract award.

(d) Whenever during the course of the fiscal year the agency needs a particular professional service, the head of the purchasing agency shall designate a [screening] selection committee to evaluate the statements of qualification and performance data of those persons on the list prepared pursuant to subsection (c) along with any other pertinent information, including references and reports. The [screening] selection committee shall be comprised of a minimum of three [employees of the purchasing agency] persons with sufficient education, training, and licenses or credentials in the area of the services required. [If the purchasing agency and using agency are different, the committee shall include at least one qualified employee from the using agency. When the committee includes an employee from a using agency, the employee shall be appointed by the head of the using agency. If qualified employees are not available from these agencies, the officers may designate employees of other governmental bodies.] In designating the members of the selection committee, the head of the purchasing agency shall ensure the impartiality and independence of committee members. The names of the members of a selection committee established under this section shall be placed in the contract file.

(e) The [primary] selection criteria employed [by the screening committee] in descending order of importance shall [include but not] be [limited to]:

(f) The [screening] selection committee shall evaluate the submissions of persons on the list prepared pursuant to subsection (c) and any other pertinent information which may be available to the agency, against the selection criteria. The committee may conduct confidential discussions with any person who is included on the list prepared pursuant to subsection (c) regarding the services which are required and the services they are able to provide. In conducting discussions, there shall be no disclosure of any information derived from [proposals submitted by competing offerors. The committee shall provide the head of the purchasing agency with the names of a minimum of three persons who the committee concludes are the most qualified to provide the services required, with a summary of each of their qualifications.] the competing professional service offerors.

(g) The selection committee shall rank a minimum of three persons based on the selection criteria and send the ranking to the head of the purchasing agency. The contract file shall contain a copy of [the criteria established for the selection and] the [committee's] summary of qualifications for the ranking of each of the persons provided to the head of the purchasing agency [by the committee.] for contract negotiations.

[(e) The head of the purchasing agency shall evaluate the summary of qualifications for each of the persons provided by the screening committee and may conduct additional discussions with any of them. The head of the purchasing agency shall then rank the persons based on the selection criteria.]

(h) The head of the purchasing agency or designee shall negotiate a contract with the first ranked person, including a rate of compensation which is fair and reasonable, established in writing, and based upon the estimated value, scope, complexity, and nature of the services to be rendered. If a satisfactory contract cannot be negotiated with the first ranked person, negotiations with that person shall be formally terminated and negotiations with the second ranked person on the list shall commence. Failing accord with the second ranked person, negotiations with the next ranked person on the list shall commence. If a contract at a fair and reasonable price cannot be negotiated, the [screening] selection committee may be asked to submit a minimum of three additional persons for the head of the purchasing agency to [rank, and] resume negotiations in the same manner provided in this subsection. Negotiations shall be conducted confidentially. If more than one professional service providers hold the same qualifications or ranking under this section, the selection committee shall award contracts in a manner that ensures equal distribution of contracts among all professional service providers that hold the same qualifications or ranking.

[(f)] (i) Contracts awarded under this section in excess of the limits in section 103D-305, shall be posted electronically within seven days of the contract award by the chief procurement officer or designee and shall remain posted for at least one year. Information to be posted shall include[:], but not be limited to:

[(g)] (j) Contracts for professional services of less than [$25,000] the limits in section 103D-305, may be negotiated by the head of the purchasing agency, with at least any two persons [who appear] on the list of qualified persons established pursuant to subsection (c). [Negotiations shall be conducted in the manner set forth in subsection (e), but without establishing any order of preference.]"

SECTION 6. Section 103D-701, Hawaii Revised Statutes, is amended to read as follows:

"§103D-701 Authority to resolve protested solicitations and awards[.]; pre-job conference. (a) At least thirty days prior to the date on which a contractor plans to begin work under a contract awarded pursuant to this section, the head of the purchasing agency shall hold a pre-job conference with the contractor, all subcontractors, and union leaders representing persons that will work on the project.

(b) Any actual or prospective bidder, offeror, or contractor who is aggrieved in connection with the solicitation or award of a contract may protest to the chief procurement officer or a designee as specified in the solicitation. A protest shall be submitted in writing within five working days after the aggrieved person knows or should have known of the facts giving rise thereto; provided that a protest of an award or proposed award shall in any event be submitted in writing within five working days after the [posting of award of the contract either under section 103D-302 or 103D-303, as applicable; provided further that no protest based upon the content of the solicitation shall be considered unless it is submitted in writing prior to the date set for the receipt of offers.] pre-job conference held pursuant to subsection (a).

[(b)] (c) The chief procurement officer or a designee, prior to the commencement of an administrative proceeding under section 103D-709 or an action in court pursuant to section 103D-710, may settle and resolve a protest concerning the solicitation or award of a contract. This authority shall be exercised in accordance with rules adopted by the policy board.

[(c)] (d) If the protest is not resolved by mutual agreement, the chief procurement officer or a designee shall promptly issue a decision in writing to uphold or deny the protest. The decision shall:

[(d)] (e) A copy of the decision under subsection [(c)] (d) shall be mailed or otherwise furnished immediately to the protestor and any other party intervening.

[(e)] (f) A decision under subsection [(c)] (d) shall be final and conclusive, unless any person adversely affected by the decision commences an administrative proceeding under section 103D-709.

[(f)] (g) In the event of a timely protest under subsection [(a),] (b), no further action shall be taken on the solicitation or the award of the contract until the chief procurement officer makes a written determination that the award of the contract without delay is necessary to protect substantial interests of the State.

[(g)] (h) In addition to any other relief, when a protest is sustained and the protestor should have been awarded the contract under the solicitation but is not, then the protestor shall be entitled to the actual costs reasonably incurred in connection with the solicitation, including bid or proposal preparation costs but not attorney's fees.

(i) In cases of awards made under the procedures of sections 103D-303 or 103D-304, unsuccessful offerors and non-selected professional service providers may submit a written request for debriefing to the chief procurement officer or designee within three working days after the posting of the award of the contract. Thereafter, the head of the purchasing agency shall provide the requestor a prompt debriefing in accordance with rules adopted by the policy board. Any protest by the requestor following debriefing shall be submitted in writing prior to the pre-job conference held pursuant to subsection (a)."

SECTION 7. If any provision of this Act, or the application thereof to any person or circumstance is held invalid, the invalidity does not affect other provisions or applications of this Act which can be given effect without the invalid provision or application, and to that extent the provisions of this Act are severable.

SECTION 8. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 9. This Act shall take effect on July 1, 2003.