HOUSE OF REPRESENTATIVES	H.B. NO.	2133
TWENTY-FIFTH LEGISLATURE, 2010		H.D. 1
STATE OF HAWAII

A BILL FOR AN ACT

RELATING TO PROCUREMENT.

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

Part I

     SECTION 1.  Chapter 103D, Hawaii Revised Statutes, is amended by adding a new section to part III to be appropriately designated and to read as follows:

     "§103D-   Contract awards; contract formation. Notwithstanding any other law to the contrary, in any contract to be awarded under section 103D-302, 103D-303, 103D-304, 103D-305, 103D-306, or 103D-307:

(1) The award shall be made within forty-five days of the initial request for proposals but in no case later than fifteen days after the deadline for proposals;

(2) A contract shall be deemed effective ten days after the notice of the award;

(3) The solicitation, offer, bid, or proposal and the notice of award shall constitute the entire contract and agreement between the governmental body and the contractor; and

(4) A subsequent written and executed contract document shall not be required."

Part II

     SECTION 2.  The legislature finds that the Western States Contracting Alliance (WSCA) was formed in October 1993, by state purchasing directors from fifteen western states.  The primary purpose of creating WSCA was to establish the means by which participating states may join together in cooperative multi-state contracting to achieve cost-effective and efficient acquisition of quality products and services.  WSCA uses a cooperative, competitive model to capture the best pricing possible for the volume of purchases being made.  However, once a brand determination has been made, and WSCA has been chosen as the contracting vehicle, there is no incentive for the chosen manufacturer to offer any additional discounts below the pre-negotiated WSCA price.

     The legislature further finds that WSCA does allow for the extension of this competitive environment at the individual order level by allowing each contract holder to designate multiple resellers (servicing subcontractors) to quote and sell products under their respective WSCA contract within any particular participating state.  The use of reseller agents expands the discounting possibilities by pitting two or more resellers against each other in a competitive environment; in most cases ensuring additional discounts are offered by the resellers to secure the task order award.  Additionally, as these selected reseller agents are usually local firms, WSCA customers receive better service than if working directly with a manufacturer that has little or no local presence.  The majority of states with WSCA agreements use reseller agents.

     In the past, Hawaii used reseller agents, but currently the state procurement office does not allow reseller agents to participate under the WSCA contracts.  This change has a greater impact on the Hawaii economy than probably any other region, particularly Hawaii's small business community.  The use of reseller agents will benefit Hawaii's economy with reduced acquisition costs through increased task orders, reduced shipping charges for deliveries from local resellers, increased hiring of local sales support, and increased tax revenue for Hawaii.

     The purpose of this part is to implement recommendations of the technology caucus work group by requiring the state procurement office to authorize reseller agreements in multi‑state contracting agreements.

     SECTION 3.  Chapter 103D, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:

     "§103D-   Reseller agreements. The state procurement office shall authorize reseller agreements as part of any multi-state contracting agreement."

Part III

     SECTION 4.  Section 103D-906, Hawaii Revised Statutes, is amended to read as follows:

     "[[]§103D-906[]]  Preference for Hawaii small businesses[; set-asides; use as subcontractors]. (a)  The policy board shall adopt rules to promote the growth and development of Hawaii small businesses that shall include[:

(1) Set-asides for small businesses in appropriate classifications of requirements suitable to performance by small businesses; and

(2) Criteria designed to encourage the use of small businesses as subcontractors on large contracts.]

a five per cent price preference.

(b)  As used in this section "Hawaii small business" means a small business as defined in section 103D-901, having:

(1) Its principal place of business or ancillary headquarters located within the state; and

(2) Not less than thirty-five per cent of its employees residing within the state."

Part IV

     SECTION 5.  If any provision of this Act, or the application thereof to any person or circumstance is held invalid, the invalidity does not affect other provisions or applications of the Act, which can be given effect without the invalid provision or application, and to this end the provisions of this Act are severable.

     SECTION 6.  Statutory material to be repealed is bracketed and stricken.  New statutory material is underscored.

     SECTION 7.  This Act shall take effect upon its approval.

Report Title:

Procurement

Description:

Amends the Hawaii public procurement code to set time limits or awards in the request for proposal process, make public contracts effective as of the notice of the award, specify that the solicitation, offer, bid, or proposal and the award notice constitute the entire contract, and provide that a subsequent written and executed contract is not required.  Requires the State Procurement Office to authorize reseller agreements in multi-state contracting agreements.  Requires the Procurement Policy Board to adopt rules to promote Hawaii businesses.  (HB2133 HD1)

The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.