STAND. COM. REP. NO.  118-14

Honolulu, Hawaii

                , 2014

RE:   H.B. No. 2047

      H.D. 1

Honorable Joseph M. Souki

Speaker, House of Representatives

Twenty-Seventh State Legislature

Regular Session of 2014

State of Hawaii

Sir:

     Your Committee on Consumer Protection and Commerce, to which was referred H.B. No. 2047 entitled:

"A BILL FOR AN ACT RELATING TO PROCUREMENT,"

begs leave to report as follows:

Prohibits governmental procurement contracts for the services of contractors, engineers, architects, surveyors, or landscape architects, from requiring the contracting entity to defend the governmental body against liability, except for claims arising out of or resulting from the negligent, reckless, or wrongful acts, errors, or omissions of the contracting entity.

The American Council of Engineering Companies of Hawaii; American Institute of Architects; Shigemura, Lau, Sakanashi, Higuchi and Associates, Inc.; Fukunaga & Associates, Inc.; The Limtiaco Consulting Group; Kennedy/Jenks Consultants; Pacific Geotechnical Engineers, Inc.; General Contractors Association of Hawaii; Brown and Caldwell; Building Industry Association of Hawaii; Gray, Hong, Nojima & Associates, Inc.; and Sam O. Hirata, Inc. testified in support of this measure.

     Your Committee has amended this measure by changing the effective date to July, 1, 2112, to encourage further discussion.

     Your Committee respectfully notes that the duty to defend clause contained in government contracts for the design and construction of public works has a direct impact on local contractors.  The clause can increase the costs of projects because of a lack of competition for public works contracts.  Your Committee further notes that the amendments made to the measure do not bar claims arising out of or resulting from the negligent, reckless, or wrongful acts, errors, or omissions of the contracting entity.

     As affirmed by the record of votes of the members of your Committee on Consumer Protection and Commerce that is attached to this report, your Committee is in accord with the intent and purpose of H.B. No. 2047, as amended herein, and recommends that it pass Second Reading in the form attached hereto as H.B. No. 2047, H.D. 1, and be referred to the Committee on Judiciary.

Respectfully submitted on behalf of the members of the Committee on Consumer Protection and Commerce,

____________________________

ANGUS L.K. McKELVEY, Chair