STAND

STAND. COM. REP. NO.1406

Honolulu, Hawaii

, 2003

RE: H.B. No. 704

H.D. 1

S.D. 2

Honorable Robert Bunda

President of the Senate

Twenty-Second State Legislature

Regular Session of 2003

State of Hawaii

Sir:

Your Committee on Ways and Means, to which was referred H.B. No. 704, H.D. 1, S.D. 1, entitled:

"A BILL FOR AN ACT RELATING TO PROCUREMENT CODE,"

begs leave to report as follows:

The purpose of this measure is to establish procurement policies and procedures that promote greater public confidence in the integrity of the procurement process.

In particular, this measure:

(1) Requires a pre-bid conference to be held for every construction or design-build project with an estimated contract value of $100,000 or more. Your Committee finds that requiring a pre-bid conference for large construction and design-build projects will enable potential bidders to have their questions answered prior to bidding and will enable protests to be resolved quickly;

(2) Establishes a Hawaii Procurement Institute at the University of Hawaii, in conjunction with the William S. Richardson School of Law, to conduct procurement education, training, and research. Your Committee finds that the institute will promote and develop a professional acquisition workforce and improve and enhance the State's contractor industrial base through education and training;

(3) Amends section 103D-304, Hawaii Revised Statutes, relating to the procurement of professional services, by:

(A) Providing that design professional services are only to be procured under section 103D-304 or emergency procurement procedures;

(B) Amending the composition of the review committee;

(D) Requiring that an independent selection committee rank professional service providers according to specified criteria;

(E) Requiring the head of the purchasing agency to negotiate with providers according to their ranking; and

(F) Requiring an equal distribution of work among providers that have the same qualifications.

Your Committee agrees that professional services contracts must be awarded based on professional qualifications only, and finds that this amendment will help to ensure that all qualified professional service providers are granted state contracts;

(4) Amends section 103D-310, Hawaii Revised Statutes, relating to the responsibility of offerors, to require all offerors on state contracts to be incorporated or organized under the laws of the State of Hawaii and to demonstrate compliance with all state employment laws, including the general excise tax law, the disability compensation law, the employment security law, the temporary disability insurance law, and the prepaid health care law. Your Committee finds that this amendment will give local contractors an equal opportunity at state contracts. Your Committee further finds that requiring contractors to be incorporated or organized under the laws of the State will allow for better monitoring and greater accountability; and

(5) Repeals section 103D-1007, Hawaii Revised Statutes, the so-called state taxpayer preference. Your Committee finds that requiring all offerors to be organized under the laws of the State and to comply with all applicable employment laws, as provided in the amendments to section 103D-310, renders the state taxpayer preference unnecessary.

Your Committee has amended this measure by changing the effective date to July 1, 3003 in order to promote continuing discussion.

As affirmed by the record of votes of the members of your Committee on Ways and Means that is attached to this report, your Committee is in accord with the intent and purpose of H.B. No. 704, H.D. 1, S.D. 1, as amended herein, and recommends that it pass Third Reading in the form attached hereto as H.B. No. 704, H.D. 1, S.D. 2.

Respectfully submitted on behalf of the members of the Committee on Ways and Means,

		____________________________ BRIAN T. TANIGUCHI, Chair