STAND. COM. REP. NO. 2455

Honolulu, Hawaii

RE: S.B. No. 3039

S.D. 1

Honorable Ronald D. Kouchi

President of the Senate

Thirty-First State Legislature

Regular Session of 2022

State of Hawaii

Sir:

Your Committees on Government Operations and Human Services, to which was referred S.B. No. 3039 entitled:

"A BILL FOR AN ACT RELATING TO PURCHASES OF HEALTH AND HUMAN SERVICES,"

beg leave to report as follows:

The purpose and intent of this measure is to amend the procurement laws relating to purchases of health and human services to promote procurement efficiency, program success, and government accountability by:

(1) Requiring fair and reasonable costs or prices by requiring an agency purchasing health and human services to analyze a proposed cost or price and to document the agency's determination that such cost or price is fair and reasonable;

(2) Increasing the small purchase threshold for health and human services and authorizing the Procurement Policy Board to adopt administrative rules to provide an expedited method for purchasing agencies to competitively procure health and human services small purchases;

(3) Increasing efficiency of short-term treatment purchase of services; and

(4) Abolishing the Community Council on Purchase of Health and Human Services.

Your Committees received testimony in support of this measure from the State Procurement Office and Department of Human Services. Your Committees received testimony in opposition to this measure from the Hawaii Substance Abuse Coalition. Your Committees received comments on this measure from the Hawai‘i Alliance of Nonprofit Organizations.

Your Committees find that existing law governing the public procurement of health and human services is inefficient and costly. The procurement of health and human services can take several months to complete, if not longer, and is subject to further delay in the event of protests. Your Committees further find that the public procurement of health and human services often involves urgent needs and specialized services.

Accordingly, your Committees find that this measure will streamline the procurement process for health and human services by reducing inefficiencies and expanding the small purchase exemption threshold. This will expedite the procurement of urgently needed health and human services and reduce the administrative costs of procuring these services, while ensuring that transparency and accountability measures remain in effect.

Your Committees have amended this measure by:

(1) Inserting an effective date of July 1, 2050, to encourage further discussion; and

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

As affirmed by the records of votes of the members of your Committees on Government Operations and Human Services that are attached to this report, your Committees are in accord with the intent and purpose of S.B. No. 3039, as amended herein, and recommend that it pass Second Reading in the form attached hereto as S.B. No. 3039, S.D. 1, and be referred to your Committees on Ways and Means and Judiciary.

Respectfully submitted on behalf of the members of the Committees on Government Operations and Human Services,

________________________________ JOY A. SAN BUENAVENTURA, Chair

________________________________ SHARON MORIWAKI, Chair