SB21 HD1.DOC

PART I

SECTION 1. The legislature finds that the enactment of the American Recovery and Reinvestment Act of 2009, Pub. L. No. 111‑5, envisioned by President Obama as money going "out the door immediately," will require expedited procedures to allow the State to take full advantage of funding from the federal stimulus plan to address, at the earliest practicable time, the programs, services, and benefits needed by the people of Hawaii.

The legislature further finds that in these times of economic turmoil, this Act would be instrumental in bringing, as soon as possible, additional financial assistance and other social services to Hawaii residents who have been affected by the current economic circumstances as well as improving and expanding benefits to the neediest individuals and families in Hawaii.

The purpose of this Act is to provide temporary exemptions from statutes relating to procurement and rulemaking to allow the State to expedite the implementation or expansion of programs, services, and benefits authorized by the American Recovery and Reinvestment Act of 2009. It is not the intent of the legislature to provide permanent exemptions to the relevant statutes, and this Act shall be applied only to expedite the expenditure of federal funds authorized in the American Recovery and Reinvestment Act of 2009, or to expending the matching state funds, if any, required to access the federal funding from the American Recovery and Reinvestment Act of 2009.

SECTION 2. To the extent not covered by any exemptions adopted by the procurement policy board or the respective chief procurement officers, and any law to the contrary notwithstanding, governmental bodies and state agencies contracting for goods, services, construction, or health and human services using federal funds authorized by the American Recovery and Reinvestment Act of 2009, and matching state funds, if any, required to access the federal funding in the American Recovery and Reinvestment Act of 2009, may do so exempt from chapter 103D and chapter 103F, Hawaii Revised Statutes, and sections 103-8.5 and 103-53(a), Hawaii Revised Statutes, and subject to the requirements of section 3.

SECTION 3. (a) Procurements of less than $150,000 for goods, services, or health and human services, and procurements of less than $250,000 for construction, shall be made through an electronic procurement system to obtain price quotations based on specifications and no less than three written quotes shall be solicited. Only vendors that supply the goods, services, construction, or health and human services shall be solicited and considered to meet the minimum quotation requirements. Considering the criteria, including quality, warranty, and delivery, award shall be made to the lowest responsive and responsible offeror. When award to the lowest responsive and responsible offeror is not practicable, award shall be made to the offeror whose quotation provides the best value to the State. The purchasing agency shall include the written determination for the selection in the procurement file.

(b) For procurements of $150,000 or more for goods, services, or health and human services, and procurements of $250,000 or more for construction, purchasing agencies, with the approval of the head of the purchasing agency, shall issue a request for interest to select a contractor or contractors. The request for interest shall include the following:

(1) Identification and purpose of the federal funding;

(2) Target population or clients to be served;

(3) A description of the goods, services, health and human services, or construction;

(4) The evaluation criteria and their relative weights, including the relative importance of price, for selecting a contractor or contractors;

(5) The format, if any, and procedure for submitting responses to the request; and

(6) The deadline for submittal of written responses to the request.

(c) The selection of a contractor or contractors shall be based on the criteria established in the request for interest. The relative priority to be applied to each evaluation factor shall also be set out in the request for interest. Evaluation factors not specified in the request for interest may not be considered.

(d) The head of the purchasing agency shall designate a committee consisting of a minimum of three persons with sufficient and relevant education, training, and licenses or credentials for each type of procurement. In designating the members of the committee, the head of the purchasing agency shall ensure the impartiality and independence of committee members.

The committee shall review and evaluate all submissions, including references, and considering the criteria established in the request for interest, the committee shall determine the lowest responsive and responsible offeror and provide that information to the head of the purchasing agency. The head of the purchasing agency shall award the contract or contracts based upon the information provided by the committee.

(e) Upon award, information about the award shall be posted on each respective governmental jurisdiction's website, except information determined to be confidential under chapter 92F, Hawaii Revised Statutes.

(f) All offerors, upon the award of a contract, shall comply with all governing entities doing business in the state, including chapters 237, 383, 386, 392, and 393. To demonstrate compliance, offerors shall be registered on the Hawaii compliance express. The procurement officer shall verify compliance for all contracts awarded. Any offeror making a false affirmation or certification under this subsection shall be suspended from further offerings or awards as authorized under subsection (j).

(g) Except for awards of health and human services contracts, a person aggrieved by an award of a contract pursuant to this Act may protest a purchasing agency's failure to follow procedures established by this Act. The protest shall be submitted to the head of the purchasing agency, in writing, within five working days after notice of the award. The head of the purchasing agency, or a designee, may settle and resolve a protest by one or more of the following means:

(1) Amending or canceling a request for interest;

(2) Terminating the contract that was awarded;

(3) Initiating a new process to award a contract;

(4) Declaring the contract void from the time of its award; or

(5) Affirming the purchasing agency's contract award decision.

In lieu of paragraphs (1) to (5), a protest may be resolved by mutual agreement; provided that if the protest is not resolved by mutual agreement, the head of the purchasing agency, or a designee, shall issue a decision in writing within ten working days of receipt of the protest. The decision shall state the reasons for the action taken. A copy of the written decision shall be mailed or otherwise furnished to the person who initiated the protest, the person awarded the contract, and to all other offerors not awarded the contract.

(h) For awards of health and human services contracts, the decision of the head of the purchasing agency shall be final and conclusive unless a person who is aggrieved by an award of a contract submits a request for reconsideration to the chief procurement officer within five working days of the receipt of the written decision. The request shall contain a specific statement of the factual and legal grounds upon which reconsideration is sought. A request for reconsideration may only be made to correct a purchasing agency's failure to comply with the procedures of this Act and any applicable rules adopted to implement this Act. The chief procurement officer may uphold or overturn the previous decision of the head of the purchasing agency. A decision by the chief procurement officer shall be rendered within ten working days from receipt of the request for reconsideration and shall be deemed final and conclusive.

(i) The procedures and remedies provided for in subsections (g) and (h) shall be the exclusive means available to resolve the concerns of persons aggrieved in connection with the award of a contract under this Act. The fact that a protest or a request for reconsideration is filed shall not stay the award of any contract made under this Act.

(j) A bidder, offeror, contractor, or provider, as applicable, who commits fraud or misrepresentation in the procurement of contracts or commits abuse in the expenditure of public moneys shall be subject to debarment or suspension under section 103D-702, Hawaii Revised Statutes, if the contract or procurement, but for this Act, would be subject to section 103-8.5 or 103-53(a), or chapter 103D or 103F, Hawaii Revised Statutes.

This subsection shall not be interpreted to absolve any person from applicable criminal penalties.

For purposes of this subsection:

"Abuse in the expenditure of public moneys" means to:

(1) Fail to spend the public moneys on the contract; or

(2) Spend public moneys on the contract for a purpose unrelated or tangentially related to the contract.

"Fraud" means providing incorrect, misleading, incomplete, or materially untrue information.

SECTION 4. When rules are required to implement new or expanded programs, services, or benefits authorized or funded by the American Recovery and Reinvestment Act of 2009, the responsible agency may issue interim rules by adoption and filing with the lieutenant governor, and by posting the interim rules on the lieutenant governor's website. Interim rules adopted pursuant to this Act shall be exempt from the requirements of chapter 91, Hawaii Revised Statutes, and shall take effect upon filing with the lieutenant governor. The interim rules shall be effective only through December 31, 2010. For any new or expanded programs, services, or benefits that have been implemented under interim rules to continue in effect beyond December 31, 2010, the responsible agency shall adopt rules in conformance with all the requirements of chapter 91, Hawaii Revised Statutes.

SECTION 5. The expenditure ceiling placed on the use of temporary assistance for needy families program funds in the Supplemental Appropriations Act of 2008, and any other expenditure limits placed on the use of temporary assistance for needy families program funds, shall be increased by $15,000,000 for the department of human services to use the funds provided under the American Recovery and Reinvestment Act of 2009; provided that of this federal fund appropriation for the department of human services, there is appropriated federal temporary assistance to needy families funds in the sum of $5,000,000 or so much thereof as may be necessary for fiscal year 2008-2009 that shall be transferred to the child care development fund.

PART II

SECTION 6. (a) There is established a legislative federal economic stimulus program oversight commission, to be comprised of eleven members, as follows:

(1) Six voting members:

(A) One member of the senate, to be appointed by the president of the senate;

(B) One member of the house of representatives to be appointed by the speaker of the house of representatives; and

(C) Four members of the public, representing citizens and local government, one each to be appointed by the president of the senate, speaker of the house of representatives, senate minority leader, and house of representatives minority leader; and

(2) Five non-voting members, one each appointed by:

(A) Each member of Hawaii's congressional delegation; and

(B) The governor.

The voting members of the commission shall elect the chairperson of the commission.

(b) Legislative staff offices as determined by the president of the senate and the speaker of the house of representatives shall provide administrative assistance to the commission.

(c) In providing oversight of the distribution of any federal economic stimulus program funds and the implementation of program expenditures, the commission may:

(1) Evaluate the coordination of federal stimulus funded programs within the State;

(2) Determine if criteria developed for setting priorities are being followed;

(3) Determine the adequacy of public notice and opportunity for public comment and input;

(4) Evaluate the transparency of the bidding and the contracting process;

(5) Evaluate the integrity of the distribution and expenditure of federal stimulus funded programs;

(6) Determine the extent to which duplication and waste is prevented; and

(7) Undertake any other tasks or efforts to ensure the integrity and fairness of the distribution and expenditure of all funds and implementation of all programs.

(d) Executive branch agencies shall provide information on the receipt and expenditure of federal economic stimulus program funds upon request of the commission.

(e) The commission may request specific audit services from the state auditor.

(f) For the purposes of this section, "commission" means the legislative federal economic stimulus program oversight commission.

PART III

SECTION 7. This Act shall take effect on June 29, 2009, and shall be repealed on June 30, 2012.

THE SENATE	S.B. NO.	21
TWENTY-FIFTH LEGISLATURE, 2009		S.D. 1
STATE OF HAWAII		H.D. 1