Report Title:
Procurement; Indemnification; Construction Professional
Description:
Amends public procurement code to prohibit a governmental body from requiring a contractor for construction design professional services to indemnify the governmental body for the acts or omissions of the governmental body, or of parties for whom the contractor is not legally liable. Allows the governmental body to require the contractor to indemnify the governmental body for the contractor's negligent or intentional acts and omissions. (SB1843 HD1)
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THE SENATE |
S.B. NO. |
1843 |
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TWENTY-THIRD LEGISLATURE, 2005 |
S.D. 1 |
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STATE OF HAWAII |
H.D. 1 |
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A BILL FOR AN ACT
relating to procurement.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:
SECTION 1. The legislature finds that design professional service contracts combine two features that make them unique among public contracts. Governmental bodies use these services to construct public works that can be used by the public for long periods of time, often for periods longer than the life of these contracts. It is not uncommon for public works to survive their designers.
The legislature recognizes that design professionals are subjected to an extended period of personal liability that cannot be avoided by ways and means often used by other public contractors. This period of personal professional liability, as related to public works, is extended by the sovereign right of the State to be free of any statute of repose.
Hawaii's procurement law requires that contracts be negotiated at "fair and reasonable prices". To promote fairness in the long-term relationship between government and public contractors whose personal liability is concurrent with the life span of public works, the legislature declares that it is public policy for a governmental body to defend both parties against any claims, with the extent of liability to be determined after settlement of the claim.
SECTION 2. Chapter 103D, Hawaii Revised Statutes, is amended by adding a new section to part VII to be appropriately designated and to read as follows:
"§103D- Indemnification. (a) A contract for construction design professional services between a governmental body and a person or entity licensed under chapter 464:
(1) Shall not require the person or entity to defend, indemnify, or hold harmless the governmental body, its employees, officers, or agents, from any liability, damage, or loss caused by, or any claim, action, or proceeding arising from, the negligent acts, errors, or omissions, recklessness, or intentional misconduct of the governmental body, its employees, officers, or agents, or any parties for whom the person or entity is not legally liable; and
(2) May require the person or entity to indemnify and hold harmless the governmental body, its employees, officers, and agents from any liability, damages, or losses, including without limitation reasonable attorneys' fees, or claims, actions, or proceedings, arising only from the negligent acts, errors, or omissions, or intentional misconduct, of the person or entity, or parties for whom the person or entity is legally liable, including the person's or entity's employees, officers, or agents in the performance of their professional services.
(b) Any provision of a contract entered into between a governmental body and a person or entity in violation of this section is declared to be contrary to the public policy of the State and is void.
(c) For purposes of this section, "entity" means any natural person, corporation, company, partnership, joint venture, association, joint-stock company, trust, institution, or other group organized for any purpose, whether incorporated or not, wherever located and of whatever citizenship."
SECTION 3. New statutory material is underscored.
SECTION 4. This Act shall take effect upon its approval.