Honorable Robert Bunda

President of the Senate

Twenty-Second State Legislature

Regular Session of 2004

State of Hawaii

Sir:

Your Committee on Transportation, Military Affairs, and Government Operations, to which was referred H.B. No. 2136, H.D. 1, entitled:

begs leave to report as follows:

The purpose of this measure is to require that debarment or suspension of contractors from public procurement occur only after the effective date of adoption of administrative rules by the policy board, and to provide statutory guidelines for the decision by the chief procurement officer to consider when debarring a contractor.

Prior to holding a hearing on this measure, a proposed S.D. 1 was prepared and made available for public review. In that form, it added:

Testimony in support of the amended measure was received from the Department of Accounting and General Services, Coalition of Hawaii Engineering & Architectural Professionals, General Contractors Association of Hawaii, American Institute of Architects - Hawaii State Council, American Public Works Association Hawaii Chapter, Pacific Structural Consultants, Inc., American Council of Engineering Companies of Hawaii, and Paul Louie & Associates, Inc. Testimony in opposition was received from the University of Hawaii, Hawaii Tourism Authority, and Research Corporation of the University of Hawaii. Comments were received from the State Procurement Office.

Your Committee agrees with the Attorney General that out-of-state law firms have difficulty under current procurement law to contract with the Attorney General to handle cases requiring specialized expertise. The difficulty is the general requirement that all offerors be incorporated or organized under Hawaii law or be registered to do business in Hawaii. The amended measure addresses this problem by carving a narrow exemption for the Attorney General to allow the hiring of legal services for which no comparable services are available in the State.

Your Committee finds that the amended measure, along with clarifications in the debarment process, and repeal of exemptions to chapter 103D, HRS, relating to the Hawaii Procurement Code, by state agencies, will result in advantages in procurement of goods, services, and construction by the citizens of this State. Equally as important, the basis for improving trust in government will be enhanced.

Your Committee has amended this measure by adopting the changes in the proposed S.D 1, and clarifying that the procuring officer verify compliance in certain instances with the requirement that the offeror be incorporated or organized under Hawaii law or be registered to do business in Hawaii.

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 H.B. No. 2136, H.D. 1, as amended herein, and recommends that it pass Second Reading in the form attached hereto as H.B. No. 2136, H.D. 1, S.D. 1, and be placed on the calendar for Third Reading.