STAND. COM. REP. NO. 2801

Honolulu, Hawaii

RE:    H.B. No. 2133

       H.D. 1

       S.D. 1

Honorable Colleen Hanabusa

President of the Senate

Twenty-Fifth State Legislature

Regular Session of 2010

State of Hawaii

Madam:

     Your Committee on Economic Development and Technology, to which was referred H.B. No. 2133, H.D. 1, entitled:

"A BILL FOR AN ACT RELATING TO PROCUREMENT,"

begs leave to report as follows:

     The purpose of this measure is to amend various provisions of the State Procurement Code by:

     (1)  Setting time limits on awards in the request for proposal process; making public contracts effective as of the notice of the award; specifying that the solicitation, offer, bid, or proposal and the award notice constitute the entire contract; and providing that a subsequent written and executed contract is not required;

     (2)  Requiring the State Procurement Office to authorize reseller agreements in multi-state contracting agreements; and

     (3)  Requiring the Procurement Policy Board to adopt rules to promote Hawaii small businesses.

     Testimony in support of this measure was submitted by Commercial Data Systems.  Testimony in opposition of this measure was submitted by the County of Hawaii Finance Department, County of Maui Department of Finance, City and County of Honolulu Department of Design and Construction, City and County of Honolulu Department of Budget and Fiscal Services, and City and County of Honolulu Department of Environmental Services.  Comments for this measure were submitted by the Department of Accounting and General Services, State Procurement Office, and General Contractors Association of Hawaii.

     Written testimony presented to the Committee may be reviewed on the Legislature's website.

     Your Committee has heard a number of concerns regarding this measure, in particular the proposed imposition of a strict forty‑five day interval for the period between a project being advertised and when the contract is executed.  Your Committee understands that the interval between a project being advertised and awarded is based on several considerations, including the size and complexity of the project, as well as the source selection method that is used, and that the forty-five day limit is not practicable in all cases.

     Your Committee has replaced the language in this measure with the language from S.B. No. 2291, S.D. 2, which was previously heard and approved by this Committee, with minor amendments proposed by the State Procurement Office.  As amended, this measure:

     (1)  Deletes the provisions that would set time limits on 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;

     (2)  In reseller agreements, requires the State Procurement Office to place orders directly with local resellers; provided they are authorized and designated by original equipment manufacturers or other national equipment or products suppliers;

     (3)  Deletes the provisions related to preferences for Hawaii small businesses;

     (4)  Deletes the severability provisions and adds savings clause provisions; and

     (5)  Makes technical amendments for the purposes of clarity and consistency.

     As affirmed by the record of votes of the members of your Committee on Economic Development and Technology that is attached to this report, your Committee is in accord with the intent and purpose of H.B. No. 2133, H.D. 1, as amended herein, and recommends that it pass Second Reading in the form attached hereto as H.B. No. 2133, H.D. 1, S.D. 1, and be referred to the Committee on Judiciary and Government Operations.

Respectfully submitted on behalf of the members of the Committee on Economic Development and Technology,

____________________________

CAROL FUKUNAGA, Chair