STAND. COM. REP. NO. 1937

Honolulu, Hawaii

RE: H.C.R. No. 59

Honorable Ronald D. Kouchi

President of the Senate

Thirty-Third State Legislature

Regular Session of 2025

State of Hawaii

Sir:

Your Committee on Government Operations, to which was referred H.C.R. No. 59 entitled:

"HOUSE CONCURRENT RESOLUTION REQUESTING THE DEPARTMENT OF ACCOUNTING AND GENERAL SERVICES TO STUDY THE FEASIBILITY OF LIMITING THE COSTS OF PROJECT AND CONSTRUCTION MANAGEMENT IN EACH STATE CONSTRUCTION PROJECT TO TEN PERCENT OF THE TOTAL COST OF THE PROJECT,"

begs leave to report as follows:

The purpose and intent of this measure is to request the Department of Accounting and General Services to study the feasibility of limiting the costs of project and construction management in each state construction project to ten percent of the total cost of the project.

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

Your Committee finds that the State expends more than $1 billion annually on capital improvement projects, a large portion of which is allocated to exceptionally high construction costs due to the high price of labor, fuel, and transporting goods to the islands. Your Committee further finds that already high construction costs have been inflated by significant hikes in the costs of project and construction management in recent years. These costs, which traditionally accounted for seven to eleven percent of a project, have risen to as high as fifteen percent of a project's cost in the last decade. Therefore, this measure will facilitate more efficient use of state funds by requesting the Department of Accounting and General Services to conduct a feasibility study on limiting project and construction management costs to ten percent of the total cost of a state construction project.

As affirmed by the record of votes of the members of your Committee on Government Operations that is attached to this report, your Committee concurs with the intent and purpose of H.C.R. No. 59, and recommends its adoption.

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

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ANGUS L.K. MCKELVEY, Chair