REPORT TITLE:
Procurement


DESCRIPTION:
Prohibits the State from contracting with foreign entities that
have been convicted of, or pleaded nolo contendere to, any crime
involving an act of fraud or dishonesty, including bribery or bid
rigging, in any jurisdiction of the United States.  Voids such
contracts based on the foreign person's misrepresentation.

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                            1672        
HOUSE OF REPRESENTATIVES                H.B. NO.           
TWENTIETH LEGISLATURE, 1999                                
STATE OF HAWAII                                            
                                                             
________________________________________________________________
________________________________________________________________


                   A  BILL  FOR  AN  ACT

RELATING TO PROCUREMENT. 


BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

 1      SECTION 1.  The legislature finds that the State and
 
 2 counties should not enter into contracts with foreign
 
 3 corporations, individuals, partnerships, or other foreign
 
 4 entities that have a record of bribery, bid rigging, or other
 
 5 crimes evidencing fraud, dishonesty, or corruption.  While as a
 
 6 practical matter it may be difficult to ascertain whether a
 
 7 foreign entity has been convicted of any of these crimes, this
 
 8 Act voids any such contract for goods or services entered into
 
 9 between the foreign person and a governmental body of the State
 
10 or a county where the foreign person has wilfully misrepresented
 
11 or omitted a material fact regarding such a crime in a request
 
12 for proposals or invitation for bids.
 
13      SECTION 2.  Chapter 103D, Hawaii Revised Statutes, is
 
14 amended by adding a new section to be appropriately designated
 
15 and to read as follows:
 
16      "103D-    Contracts with foreign persons.  (a)
 
17 Notwithstanding any law to the contrary, no governmental body
 
18 shall enter into a contract for the procurement or disposal of
 
19 goods or services, including professional services or
 
20 construction, with any foreign person, where that foreign person,
 

 
Page 2                                         1672        
                                     H.B. NO.           
                                                        
                                                        

 
 1 or the director, officer, responsible managing employee, or other
 
 2 controlling person of that foreign person has:
 
 3      (1)  Been convicted of, or pleaded nolo contendere to, any
 
 4           crime involving an act of fraud or dishonesty,
 
 5           including but not limited to bribery or bid rigging, in
 
 6           any jurisdiction of the United States or its
 
 7           territories or possessions; or
 
 8      (2)  Wilfully made or caused to be made in any response to a
 
 9           request for proposals or an invitation for bids any
 
10           statement which, at the time and in the light of the
 
11           circumstances under which it was made, was false or
 
12           misleading with respect to any material fact regarding
 
13           a crime specified under paragraph (1), or has wilfully
 
14           omitted to state in the response to the request for
 
15           proposals or invitation for bids any material fact
 
16           regarding a crime specified under paragraph (1).
 
17      (b)  Any contract entered into between a governmental body
 
18 and a foreign person in violation of subsection (a) shall be
 
19 deemed to be void as against public policy from its inception.
 
20 In any action for damages arising out of a contract deemed to be
 
21 void under this subsection, the court shall award all attorney's
 
22 fees and court costs to the governmental body as appropriate.
 

 
 
 
Page 3                                         1672        
                                     H.B. NO.           
                                                        
                                                        

 
 1      (c)  As used in this section, "foreign person" has the same
 
 2 meaning as defined in section 241-3.5(8)."
 
 3      SECTION 3.  Any existing contracts, agreements, or other
 
 4 arrangements containing provisions that are not in compliance
 
 5 with this Act shall be void on the effective date of this Act as
 
 6 to those provisions, except as to any provisions that may be
 
 7 required to be extended beyond that date in order to comply with
 
 8 any applicable federal laws or orders.  Nothing in this section
 
 9 shall preclude payment to any contractor or licensee for services
 
10 actually and properly performed under the contract prior to the
 
11 date of its becoming void.
 
12      SECTION 4.  It is the intent of this Act not to jeopardize
 
13 the receipt of any federal aid nor to impair the obligation of
 
14 the State or any agency thereof to the holders of any bond issued
 
15 by the State or by any such agency, and to the extent, and only
 
16 to the extent, necessary to effectuate this intent, the governor
 
17 may modify the strict provisions of this Act, but shall promptly
 
18 report any such modification with reasons therefor to the
 
19 legislature at its next session thereafter for review by the
 
20 legislature.
 
21      SECTION 5.  New statutory material is underscored.
 
22      SECTION 6.  This Act shall take effect on July 1, 1999.
 
23 
 
24                           INTRODUCED BY:  _______________________