STAND. COM. REP. NO. 2412

Honolulu, Hawaii

RE: S.B. No. 2620

Honorable Ronald D. Kouchi

President of the Senate

Twenty-Ninth State Legislature

Regular Session of 2018

State of Hawaii

Sir:

Your Committee on Government Operations, to which was referred S.B. No. 2620 entitled:

"A BILL FOR AN ACT RELATING TO PROCUREMENT,"

begs leave to report as follows:

The purpose and intent of this measure is to repeal the $10,000 maximum limit on a cash or protest bond that must be posted for a procurement award protest

Your Committee received testimony in support of this measure from the Department of Accounting and General Services, State Procurement Office, and one individual.

Your Committee finds that greater efficiency in the bid process for procurement contracts is necessary to eliminate government waste and increase government efficiency. Your Committee also finds that bid protests account for many of the delays in the bid process which can lead to increased expenses ultimately borne by taxpayers. Under existing law, the maximum amount that a party initiating a protest must provide in a cash or protest bond for contracts with an estimated value of $1,000,000 or more is $10,000. Your Committee finds that this cap is too low and therefore provides no deterrent for those who might unnecessarily delay a public works project by submitting a bid protest. Therefore, your Committee finds that the cap on a cash or protest bond for contracts with an estimated value of $1,000,000 or more should be removed to increase the efficiency of the bid process for procurement contracts.

As affirmed by the record of votes of the members of your Committee on Government Operations that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 2620 and recommends that it pass Second Reading and be referred to your Committee on Ways and Means.

Respectfully submitted on behalf of the members of the Committee on Government Operations,

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DONNA MERCADO KIM, Chair