Honorable Robert Bunda

President of the Senate

Twenty-Third State Legislature

Regular Session of 2005

State of Hawaii

Sir:

Your Committee on Transportation and Government Operations, to which was referred S.C.R. No. 106 entitled:

begs leave to report as follows:

The purpose of this measure is to convene a joint legislative task force to review and make recommendations concerning the Hawaii public procurement code (procurement code).

Your Committee received testimony in support of this measure from the Department of Accounting and General Services, Hawaii Procurement Institute, Hawaii Health Systems Corporation, West Kauai Medical Center-Mahelona Medical Center, Maui Memorial Medical Center, Kona Community Hospital, Leahi Hospital, Intermountain Health Care/Amerinet, University of Hawaii Professional Assembly, Diagnostic Laboratory Services, Inc., Coalition of Hawaii Engineering & Architectural Professionals, and one individual. Comments were received from the University of Hawaii and State Procurement Office.

Your Committee finds that it is the policy of the State to foster broad-based competition. Full and open competition must be encouraged. With competition, the State and counties will benefit economically through lowered costs. Notwithstanding these benefits, there are currently ten statutory exemptions from the procurement code for various agencies and functions. In addition to the statutory exemptions, there are sixteen administrative exemptions for various types of purchases. Your Committee is concerned that some current exemptions may be warranted and others not justified.

Your Committee believes that an abundance of exemptions has the effect of defeating the intent of the Legislature and the purpose of chapter 103D, HRS, to create a government purchasing system that is uniform, fair, and comprehensive, so that there is an even playing field for all contractors and providers. Your Committee also believes that the procurement code may contain provisions that make the procurement process unnecessarily cumbersome and time-consuming.

Your Committee intends that the task force address the issues of procurement exemptions and the procurement process and procedures to ensure that chapter 103D, HRS, fulfills its original intent.

Your Committee has amended this measure by adding the Comptroller and the Hawaii Procurement Institute to assist the task force and making technical, nonsubstantive amendments.

As affirmed by the record of votes of the members of your Committee on Transportation and Government Operations that is attached to this report, your Committee concurs with the intent and purpose of S.C.R. No. 106, as amended herein, and recommends that it be referred to the Committee on Ways and Means, in the form attached hereto as S.C.R. No. 106, S.D. 1.