Report Title:

Procurement; Contracts; Defense of a Governmental Body

Description:

Contracts less than $5,000,000 between a governmental body and professional architects, landscape architects, engineers, and surveyors, shall not require defense of a governmental body; contracts may require indemnification and holding harmless of the governmental body.  (SD1)

THE SENATE	S.B. NO.	17
TWENTY-FOURTH LEGISLATURE, 2007		S.D. 1
STATE OF HAWAII

A BILL FOR AN ACT

relating to procurement.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

     SECTION 1.  The purpose of this Act is to prohibit provisions in certain governmental procurement contracts that require contractors to defend the governmental body, and to allow the contracts to require a contractor to indemnify and hold harmless the governmental body.

     SECTION 2.  Chapter 103D, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:

"§103D-   Defense of a governmental body. (a)  On or after July 1, 2007, if a governmental body enters into a contract for less than $5,000,000, with a person licensed under chapter 464, for professional services to be performed by one or more professionals, the contract shall not require the person to defend the governmental body, its officers, employees, or agents against any liability, damage, or loss, in any claim, action, or proceeding.

(b)  Notwithstanding subsection (a), the contract may require a person to indemnify and hold harmless the governmental body, its officers, and employees, from and against any liability, damage, loss, cost, and expense, including reasonable attorneys' fees, and all claims, suits, and demands therefore, arising out of or resulting from the negligent acts, errors, or omissions of the person, the person's employees, officers, or subcontractors in the performance of their professional services.

(c)  Any provision in a contract under subsection (a),  entered into prior to July 1, 2007, shall be subject to a ten‑year statute of limitation on the requirement to defend the governmental body, its officers, agents against any liability, damage, or loss in any claim, action, or proceeding; provided that the ten-year period shall commence with the date of the execution of the contract."

     SECTION 3.  Except as provided in subsection (c) of the new section to chapter 103D, Hawaii Revised Statutes, under section 2 of this Act, this Act does not affect rights and duties that matured, penalties that were incurred, and proceedings that were begun, before its effective date.

     SECTION 4.  New statutory material is underscored.

     SECTION 5.  This Act shall take effect upon its approval.