Honorable Calvin K.Y. Say

Speaker, House of Representatives

Twenty-Second State Legislature

Regular Session of 2003

State of Hawaii

Sir:

Your Committee on Economic Development and Business Concerns, to which was referred H.B. No. 697 entitled:

begs leave to report as follows:

The purpose of this bill is to:

The purchasing agency would pay each unsuccessful offeror, who is a state contractor and submits a technically responsive proposal, one percent of the project construction costs, up to a maximum of $1,000,000 per offeror. In addition, the purchasing agency would also have proprietary rights over each proposal.

AIA Hawaii State Council, the American Council of Engineering Companies of Hawaii, American Public Works Association—Hawaii Chapter, Miyasato Kuniyoshi Engineers LLC, Pacific Structural Consultants, Inc., Paul Louie & Associates, Inc., and American Society of Civil Engineers supported this bill.

The Department of Transportation supported the intent of this bill.

It is not the intent of this measure that all competitive sealed proposals use two-step design-build proposals. On the contrary, two-step design-build proposals should only be used for those few highly specialized projects requiring a high level of creativity and cooperation between the designer and construction agent.

Under the existing system, design and construction businesses have suffered large losses that must be recovered through increased overhead costs on other projects for both public and private clients. Moreover, Hawaii-based design professionals are "iced" out of the market because only mainland-based firms can afford to compete for large-scale construction projects.

Providing payment to unsuccessful offerors would create a more equitable playing field, enabling more Hawaii-based architects to compete successfully for large-scale, public construction projects. The payment would not require additional moneys to be appropriated by the Legislature because the responsible agency would set aside moneys to unsuccessful offerors from the basic project appropriation.

Your Committee has amended this bill by:

As affirmed by the record of votes of the members of your Committee on Economic Development and Business Concerns that is attached to this report, your Committee is in accord with the intent and purpose of H.B. No. 697, as amended herein, and recommends that it pass Second Reading in the form attached hereto as H.B. No. 697, H.D. 1, and be referred to the Committee on Finance.