Honorable Robert Bunda

President of the Senate

Twenty-Third State Legislature

Regular Session of 2006

State of Hawaii

Sir:

Your Committee on Transportation and Government Operations, to which was referred S.B. No. 2897 entitled:

begs leave to report as follows:

The purpose of this measure is to increase the small purchases threshold under the Hawaii public procurement code from $25,000 to $50,000.

Your Committee received testimony in support of this measure from the Hawaii Health Systems Corporation. Testimony in opposition was received from the State Procurement Office. Comments were received from the Department of Accounting and General Services (DAGS).

This measure brings into line the reality of the costs of goods and services with the threshold of small purchase contracts. It is the intent of your Committee to facilitate procurements from smaller businesses by providing flexible and expedient purchases of smaller amounts.

Your Committee remains concerned about the potential for abuse and fraud by raising the limit to $50,000. To maintain open and fair competition in small purchases, your Committee has amended this measure on the recommendation of DAGS by:

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 is in accord with the intent and purpose of S.B. No. 2897, as amended herein, and recommends that it pass Second Reading in the form attached hereto as S.B. No. 2897, S.D. 1, and be referred to the Committee on Ways and Means.