HOUSE OF REPRESENTATIVES

H.C.R. NO.

173

TWENTY-FIRST LEGISLATURE, 2002

H.D. 1

STATE OF HAWAII

 
   


HOUSE CONCURRENT

RESOLUTION

 

REQUESTING THE AUDITOR TO review PRIVATIZATION CONTRACTS entered into BY CERTAIN STATE AND COUNTY AGENCIES.

 

 

WHEREAS, the Legislature enacted Act 90, Session Laws of Hawaii 2001, in part to enable the Governor and the executives of other state and county agencies to utilize privatization as a management tool to provide government services more efficiently to Hawaii residents; and

WHEREAS, the Legislature believed that providing public sector management with privatization and other management tools to choose from, including managed competition and experimental modernization projects, afforded management a wider array of options to achieve its goal of government efficiency; and

WHEREAS, Act 90 was also enacted to address and resolve uncertainty generated by the Hawaii Supreme Court's decision in Konno v. County of Hawaii, 85 Haw. 61 (1997), regarding the government's ability to rely upon the private sector for services government needs or is required to provide; and

WHEREAS, accordingly, part II of Act 90 allowed certain state and county officials in whom procurement authority is vested by law to enter into contracts financed by public funds with private entities to obtain services from those entities, "when there is reasonable basis to believe that the service of equivalent or better quality than that which could be provided by a government agency can be provided at lower cost"; and

WHEREAS, nevertheless, a number of concerns have been raised that under certain privatization contracts entered into by various state and county agencies with private sector entities pursuant to Act 90, the private contractors have not been providing services of "equivalent or better quality" than the public agency could have provided at a lower cost; and

WHEREAS, there is a need for the Auditor to review these privatization contracts to ensure that the State and counties are obtaining services of equivalent or better quality than that which was previously provided by state and county employees; now, therefore,

BE IT RESOLVED by the House of Representatives of the Twenty-first Legislature of the State of Hawaii, Regular Session of 2002, the Senate concurring, that the Auditor is requested to review privatization contracts entered into by certain state and county agencies; and

BE IT FURTHER RESOLVED that, in particular, the Auditor is requested to review privatization contracts entered into by the following state and county agencies since the enactment of Act 90, Session Laws of Hawaii 2001:

(1) The Department of Human Services relating to case managers;

(2) The Department of Health;

(3) The Department of Transportation;

(4) The Department of Public Safety;

(5) The Division of Boating and Ocean Recreation in the Department of Land and Natural Resources;

(6) The University of Hawaii's former School of Public Health, and the new Office of Public Health Studies, Department of Public Health Sciences and Epidemiology, John A. Burns School of Medicine; and

(7) The City and County of Honolulu Department of Environmental Services relating to wastewater services;

and

BE IT FURTHER RESOLVED that the Auditor is requested to include a review of the following:

(1) The contract requirements and how well or poorly the contractor has fulfilled those requirements;

(2) If the contractor has failed to perform the contract in accordance with the terms of the contract, the reasons for that failure;

(3) A determination as to whether the contractor, in performing the contract, has provided services "of equivalent or better quality" than that which could have been provided by a government agency at lower cost;

(4) Whether the contracts in question have been subject to review by a contract monitor, and, if so, the opinion of the monitor regarding contract quality and cost;

(5) Whether the contracted-for service is appropriate for continued privatization; and

(6) An evaluation of the contract's total costs, both direct and indirect;

and

BE IT FURTHER RESOLVED that the Auditor is requested to consult with the following private entities in conducting its review:

(1) Ka A`o Hai O Ka Manao;

(2) Ala Wai Marina Board;

(3) Hawaii Government Employees Association, AFSCME Local 152 AFL-CIO;

(4) United Public Workers, Local 646;

(5) International Longshoremen's and Warehousemen's Union, Local 142;

(6) Teamsters Local 5;

(7) Teamsters Local 996;

(8) Kapiolani Medical Center; and

(9) Convalescent Center of Honolulu;

and

BE IT FURTHER RESOLVED that the Auditor is requested to review legislation enacted by various state and local governments to reduce the risks of contracting out for services; and

BE IT FURTHER RESOLVED that the Auditor is requested to report findings and recommendations, including any proposed implementing legislation, to the Legislature no later than twenty days before the convening of the Regular Session of 2003; and

BE IT FURTHER RESOLVED that certified copies of this Concurrent Resolution be transmitted to the Auditor; the Director of Human Services; the Director of Public Safety; the Chairperson of the Board of Land and Natural Resources; the Administrator of the Division of Boating and Ocean Recreation; the President and Chairperson of the Board of Regents of the University of Hawaii; the Dean of the John A. Burns School of Medicine; the City and County of Honolulu Director of Environmental Services; and the President or Executive Director of Ka A`o Hai O Ka Manao; Ala Wai Marina Board; the Hawaii Government Employees Association, AFSCME Local 152 AFL-CIO; United Public Workers, Local 646; the International Longshoremen's and Warehousemen's Union, Local 142; Teamsters Local 5; Teamsters Local 996; Kapiolani Medical Center; and the Convalescent Center of Honolulu.

 

 

 

 

Report Title:

Auditor; Review of Privatization Contracts