SB21 SD1.DOC

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, rulemaking, and employment 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. (a) 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, including chapter 103D and chapter 103F, Hawaii Revised Statutes, contracts 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, shall be subject to the following requirements:

(1) Procurements of less than $150,000 for goods and services or health and human services, and procurements of less than $250,000 for construction, shall be 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 but not limited to 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; and

(2) 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, may issue a request for interest to select a contractor or contractors. The request for interest shall include but not be limited to the following:

(A) Identification and purpose of the federal funding;

(B) Target population or clients to be served;

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

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

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

(b) 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.

(c) 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.

(d) 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.

(e) 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. The procedures and remedies provided for in this Act shall be the exclusive means available to resolve the concerns of persons aggrieved in connection with the award of a contract under this subsection.

(f) The fact that a protest or a request for reconsideration is filed shall not stay the award of any contract made under this Act.

(g) 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, or both, shall be subject to debarment or suspension under section 103D-702, Hawaii Revised Statutes, if the contract or procurement is subject to chapter 103, 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 3. Sections 103-8.5, 103-53(a), and 103-55, Hawaii Revised Statutes, shall not apply to contracts 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 required to access the federal funding in the American Recovery and Reinvestment Act of 2009; provided that tax clearances from the director of taxation and the Internal Revenue Service shall be received prior to final payment certifying that all tax returns due have been filed, and all taxes, interest, and penalties levied against the contractor or accrued under title 14 of the Hawaii Revised Statutes, that are administered by the department of taxation and under the Internal Revenue Code have been paid.

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 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 raised or waived to the extent necessary for the department of human services to utilize the funds provided under the American Recovery and Reinvestment Act of 2009, up to the amount actually provided to the State in fiscal year 2009.

SECTION 6. This Act shall take effect upon its approval and shall be repealed on June 30, 2009.

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