STAND. COM. REP. NO. 2927

Honolulu, Hawaii

RE: S.B. No. 2601

S.D. 2

Honorable Ronald D. Kouchi

President of the Senate

Twenty-Ninth State Legislature

Regular Session of 2018

State of Hawaii

Sir:

Your Committee on Ways and Means, to which was referred S.B. No. 2601, S.D. 1, entitled:

"A BILL FOR AN ACT RELATING TO PROCUREMENT,"

begs leave to report as follows:

The purpose and intent of this measure is to increase efficiency and accountability in government procurement.

Specifically, this measure:

(1) Requires that past performance be considered in bid selection of contractors in sole source procurement;

(2) Establishes procedures and factors to be considered in evaluating, considering, or reviewing past performance;

(3) Requires an evaluation of the work and performance of a contractor upon completion of a contract; and

(4) Appropriates funds to the State Procurement Office.

Your Committee received written comments in support of this measure from the State Procurement Office.

Your Committee received written comments in opposition to this measure from the Department of Accounting and General Services and the Department of Design and Construction of the City and County of Honolulu.

Your Committee received written comments on this measure from the General Contractors Association of Hawaii.

Your Committee finds that because consideration of past performance is not currently required in the procurement process, bidders with poor past performance on public contracts may be considered for new procurements, resulting in repeated inefficient and substandard performances.

Your Committee has amended this measure by:

(1) Replacing existing language establishing procedures and factors to be considered in the evaluation, consideration, or review of past performance with language recommended by the State Procurement Office that establishes evaluation factors and responsibilities for recording and maintaining contractor performance information;

(2) Establishing contract administration duties and providing that a procurement officer may delegate certain duties to a contract administrator;

(3) Requiring that past performance be considered in source selection for competitive sealed contracts that exceed the small purchase threshold;

(4) Requiring that procurement officers consider certain factors, including past performance, when making a determination of offeror responsibility;

(5) Clarifying that the appropriation to the State Procurement Office shall be used to implement the Act for executive branch departments and agencies;

(6) Changing the effective date to July 1, 2050, to facilitate further discussion on the measure; and

(7) Making technical nonsubstantive amendments for the purposes of clarity, consistency, and style.

As affirmed by the record of votes of the members of your Committee on Ways and Means that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 2601, S.D. 1, as amended herein, and recommends that it pass Third Reading in the form attached hereto as S.B. No. 2601, S.D. 2.

Respectfully submitted on behalf of the members of the Committee on Ways and Means,

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DONOVAN M. DELA CRUZ, Chair