Honolulu, Hawaii
                                                     , 1999

                                   RE:  S.B. No. 797
                                        S.D. 1

Honorable Norman Mizuguchi
President of the Senate
Twentieth State Legislature
Regular Session of 1999
State of Hawaii


     Your Committee on Government Operations and Housing, to
which was referred S.B. No. 797 entitled: 


begs leave to report as follows:

     The purpose of this measure is to impose a dollar limit on
nonbid contract awards to the same entity within a five year
period and require the chief procurement officer to maintain
records of competitive sealed proposals and small purchase

     Testimony in opposition to this measure was received from
the State Procurement Office, the Department of Transportation,
ADI Design Group Inc., American Institute of Architects Hawaii
State Council, Pacific Geotechnical Engineers, Inc., PBR Hawaii,
R.M. Towill Corporation, SSFM Engineers, Inc., and five

     Your Committee finds that currently, nonbid contract awards
are being awarded to a limited number of contractors.  Your
Committee finds that this measure is an attempt to lessen the
politics and favoritism that may occur in the nonbid contract
procurement process.

     Your Committee finds that in order to stimulate business and
expand employment opportunities, more public contracts should be
awarded to a variety of contractors.

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                                   STAND. COM. REP. NO. 391
                                   Page 2

     Your Committee amended this measure to impose a numerical
limit only to competitive sealed proposals and professional
services contracts that can be awarded to a contractor within a
five year period.  Your Committee also amended this measure to
allow for an exception to the numerical limit if all eligible
contractors have received at least one contract award within the
five year period.

     As affirmed by the record of votes of the members of your
Committee on Government Operations and Housing that is attached
to this report, your Committee is in accord with the intent and
purpose of S.B. No. 797, as amended herein, and recommends that
it pass Second Reading in the form attached hereto as S.B.
No. 797, S.D. 1, and be referred to the Committee on Ways and

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

                                   ROD TAM, Chair

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