HCR272

WHEREAS, in 1993, the Hawaii public procurement code, codified as chapter 103D, Hawaii Revised Statutes, was adopted to increase public confidence in the procedures followed in public procurement, the process through which taxpayer's dollars are spent to purchase goods and services; and

WHEREAS, the Hawaii public procurement code establishes a number of preferences in the purchase of goods and services, including a preference for recycled products and the use of Hawaii software development businesses; and

WHEREAS, the public procurement code provides for a preference for Hawaii products and the establishment of a Hawaii products list; and

WHEREAS, when considering a bid or proposal that contains both Hawaii and non-Hawaii products for public procurement purposes, a fixed percentage price adjustment is applied to bids or offers of products on the Hawaii products list; and

WHEREAS, the preference for Hawaii products is not intended to result in automatic purchases of Hawaii products, but to give a preference for a Hawaii product where the Hawaii product meets the minimum specifications and other factors are equal; and

WHEREAS, in recent years, legislation has been introduced, but not passed, that sought to require the food operations of state correctional, hospitals, healthcare facilities, and public schools to apply a procurement preference to purchases of agricultural products that include floricultural, horticultural, viticultural, forestry, nut, coffee, dairy, livestock, poultry, bee, and farm or plantation products that are raised or grown in Hawaii, and other legislation sought unsuccessfully to require state purchasing agents to apply a procurement preference for purchases of lei made in Hawaii; and

WHEREAS, certain goods and services are exempt from the public procurement code if procurement by competitive means is not practicable or advantageous to the State; and

WHEREAS, the exemptions established pursuant to section 103D—102(b)(4), Hawaii Revised Statutes, generally relate to specific or small purchases, including:

(1) Expert witness services;

(2) Art works for museum or public display;

(3) Research and reference material;

(4) Meats and food for Kaulapapa settlement;

(5) Opponents for athletic contests;

(6) Regulated utility services;

(7) Performances;

(8) Goods and services for commercial resale by the State;

(9) Services relating to the issuance and sale of State or county bonds;

(10) Legal services performed out of State for the State or its agencies;

(11) Financing agreements; and

(12) Other goods or services where procurement by competitive means is not practicable or advantageous to the State; and

WHEREAS, under Exhibit A to section 3-120-4, Hawaii Administrative Rules, as approved by the Procurement Policy Board, state purchases of fresh meat and produce and animals and plants also are exempt from the public procurement code; and

WHEREAS, the public procurement code currently provides an exemption for small purchases in amounts less than $50,000; and

WHEREAS, exemptions of goods and services from the public procurement code deprive Hawaii producers and vendors of any advantage that Hawaii goods or services in the category exempted would otherwise receive from the statutorily established preference for Hawaii products; for example, any Hawaii fresh meat or produce included on the Hawaii product list and subject to preference, would lose the Hawaii product preference because purchases of fresh meat or produce are exempt from the public procurement code; and

WHEREAS, to nurture, encourage, and facilitate the intent of the Hawaii product preference in public procurement, a determination of whether the exemption for fresh meat and produce and animals and plants is necessary; now, therefore,

BE IT RESOLVED by the House of Representatives of the Twenty-fourth Legislature of the State of Hawaii, Regular Session of 2008, the Senate concurring, that the Procurement Policy Board is requested to review the public procurement code exemption for fresh meat and produce and animals and plants under Exhibit A to section 3-120-4, Hawaii Administrative Rules, to determine whether the current exemption for fresh meat and produce and animals and plants is appropriate and consistent with the public procurement code's expressly stated preference for Hawaii products and to determine whether the exemption for fresh meat and produce and animals and plants thwarts the intended public procurement preference for Hawaii products; and

BE IT FURTHER RESOLVED that the Procurement Policy Board is also requested to consider and implement a policy that facilitates implementing the public procurement code preference for Hawaii products by directing state agencies to include specific reference to Hawaii product preference in their public procurement solicitation and by granting offerors who abide by the Hawaii preference provision, preferential or "plus" scoring in their evaluation; and

BE IT FURTHER RESOLVED that the Procurement Policy Board is requested to submit to the Legislature no later than twenty days prior to the convening of the Regular Session of 2009 a report of its findings and recommendations, including the status of the implementation of a policy that indicates a Hawaii product preference in public procurement purchases and preferential scoring for participating offerors; and

BE IT FURTHER RESOLVED that certified copies of this Concurrent Resolution be transmitted to the Chairperson of the Procurement Policy Board, the Comptroller, and the Administrator of the State Procurement Office, who in turn is requested to transmit copies to all chief procurement officers of state entities and each of the several counties.

	OFFERED BY:	_____________________________

Report Title:

Hawaii Products; Procurement

HOUSE OF REPRESENTATIVES	H.C.R. NO.	272
TWENTY-FOURTH LEGISLATURE, 2008
STATE OF HAWAII