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HOUSE OF REPRESENTATIVES

H.B. NO.

1103

TWENTY-SECOND LEGISLATURE, 2003

 

STATE OF HAWAII

 


 

A BILL FOR AN ACT

 

RELATING TO PROCUREMENT

 

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

SECTION 1. The purpose of this Act is to establish procurement policies and procedures that:

(a) Promote public confidence in the integrity of the procurement process;

(b) Increase openness in the evaluation of proposals and other non-sealed bid procurements;

(c) Enhance procurement education in the Pacific by creating a Hawaii Procurement Institute;

(d) Establish preferences to enhance competition on government contracts by expanding the pool of available vendors and contractors;

(e) Refine existing preferences to promote training and employment opportunities of disabled persons; and

(f) Make technical corrections to sealed bid provisions of Chapter 103D.

SECTION 2. Part X of Chapter 103D, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:

"103D- Preference for small businesses; set-asides and utilization as subcontractors. The policy board shall adopt rules to promote the growth and development of small businesses and consider for inclusion provisions (a) to provide set-asides to small business in appropriate classifications of requirements susceptible to performance by small businesses; and (b) to impose mandatory evaluation criteria designed to encourage the use of small businesses as subcontractors on large contracts not susceptible to performance by small businesses."

SECTION 3. Section 103D-206, Hawaii Revised Statutes, is amended to read as follows:

"103D-206 Additional duties of the administrator of the procurement office. In addition to the duties referred to in section 103D-205, the administrator shall:

(1) Perform periodic review of the procurement practices of all governmental bodies;

(2) Assist, advise, and guide governmental bodies in matters relating to procurement;

(3) Develop and administer a statewide procurement orientation and training program;

(4) Develop, distribute, and maintain a procurement manual for all state procurement officials; [and]

(5) Develop, distribute, and maintain a procurement guide for vendors wishing to do business with the State and its counties[.]; and

(6) Establish and maintain a Hawaii Procurement Institute, in cooperation with the William S. Richardson School of Law and other public and private entities and/or persons, to promote and develop a professional acquisition workforce and to improve and enhance the State of Hawaii's contractor industrial base through education and training. The Hawaii Procurement Institute may:

(A) Conduct and participate in procurement education and training for entry level and higher qualified State of Hawaii employees and others, including persons not employed by the State of Hawaii;

(B) Conduct and promote research, conferences, and studies to improve the procurement process, laws, policies, methods, regulations, procedures, and forms relating to State and Local Government procurement;

(C) Report on and make recommendations regarding goals, guidelines, innovations, and evaluation of State and Local Government Procurement initiatives; and

(D) Establish and maintain a procurement library within the State of Hawaii."

SECTION 4. Section 103D-302, Hawaii Revised Statutes, is amended by amending subsections (b) and (f) to read as follows:

"(b) An invitation for bids shall be issued, and shall include a purchase description and all contractual terms and conditions applicable to the procurement. [If the invitation for bids is for construction, it shall specify that all bids include the name of each person or firm to be engaged by the bidder as a joint contractor or subcontractor in the performance of the contract and the nature and scope of the work to be performed by each. Construction bids that do not comply with this requirement may be accepted if acceptance is in the best interest of the State and the value of the work to be performed by the joint contractor or subcontractor is equal to or less than one per cent of the total bid amount.]

(f) Bids shall be evaluated based on the requirements set forth in the invitation for bids.  These requirements may include criteria to determine acceptability such as inspection, testing, quality, workmanship, delivery, and suitability for a particular purpose. Those criteria that will affect the bid price and be considered in evaluation for award shall be objectively measurable, such as discounts, transportation costs, and total or life cycle costs. For purposes of evaluating responsibility, invitations for bids for construction shall specify that all bids include the name of each person or firm to be engaged by the bidder as a subcontractor in the performance of the contract and the nature and scope of the work to be performed by each. Construction bidders that fail to comply with this requirement may be found not responsible under rules adopted by the policy board. The invitation for bids shall set forth the evaluation criteria to be used. No criteria may be used in bid evaluation that are not set forth in the invitation for bids."

SECTION 5. Section 103D-304, Hawaii Revised Statutes, is amended by amending subsections (b) through (g) as follows:

"(b) At a minimum, before the beginning of each fiscal year, the head of each purchasing agency shall publish a notice inviting persons engaged in providing professional services which the agency anticipates needing in the next fiscal year, to submit current statements of qualifications and expressions of interest to the agency. Additional notices [may] shall be given if:

(1) The response to the initial notice is inadequate;

(2) The response to the initial notice does not result in adequate representation of available sources; [or]

(3) [Previously unanticipated] New needs for professional services arise[.]; or

(4) Rules adopted by the policy board so specify.

The chief procurement officer may specify a uniform format for statements of qualifications. Persons may amend these statements by filing a new statement prior to the date designated for submission.

(c) The head of the purchasing agency shall designate a review committee consisting of a minimum of three [employees from the agency or from another governmental body,] persons with sufficient education, training, and licenses or credentials for each type of professional service which may be required.

(1) In designating the members of the review committee, the head of the purchasing agency shall ensure the impartiality and independence of committee members.

(2) The names of the members of the review committee established under this action shall be placed in the contract file.

(3) The committee shall review and evaluate all submissions and other pertinent information, including references and reports, and prepare a list of qualified persons to provide these services.

(4) Persons included on the list of qualified persons may amend their statements of qualifications as necessary or appropriate. Persons shall immediately inform the head of the purchasing agency of any change in information furnished which would disqualify the person from being considered for a contract award.

(d) Whenever during the course of the fiscal year the agency needs a particular professional service, the head of the purchasing agency shall designate a [screening] selection committee to evaluate the statements of qualification and performance data of those persons on the list prepared pursuant to subsection (c) along with any other pertinent information, including references and reports.

(1) The [screening] selection committee shall be comprised of a minimum of three [employees of the purchasing agency] persons with sufficient education, training, and licenses or credentials in the area of the services required.

(2) In designating the members of the selection committee, the head of the purchasing agency shall ensure the impartiality and independence of committee members. [If the purchasing agency and using agency are different, the committee shall include at least one qualified employee from the using agency. When the committee includes an employee from the using agency, the employee shall be appointed by the head of the using agency. If qualified employees are not available from these agencies, the officers may designate employees of other governmental bodies.]

(3) The names of the members of a selection committee established under this section shall be placed in the contract file.

(e) The [primary] selection criteria employed [by the screening committee] in descending order of importance shall [include but not] be [limited to]:

(1) Experience and professional qualifications [of the staff to be assigned] relevant to the project[;] type;

(2) Past performance on projects of similar scope for public agencies or private industry[; and], including responses and corrective actions to notices of deficiencies;

(3) Capacity to accomplish the work in the required time[.]; and

(4) Any additional criteria determined in writing by the selection committee to be relevant to the purchasing agency's needs or necessary and appropriate to ensure full, open, and fair competition for professional services contracts.

(f) The [screening] selection committee shall evaluate the submissions of persons on the list prepared pursuant to subsection (c) and any other pertinent information which may be available to the agency, against the selection criteria. The committee may conduct confidential discussions with any person who is included on the list prepared pursuant to subsection (c) regarding the services which are required and the services they are able to provide. In conducting discussions, there shall be no disclosure of any information derived from [proposals submitted by competing offerors. The committee shall provide the head of the purchasing agency with the names of a minimum of three persons who the committee concludes are the most qualified to provide the services required, with a summary of each of their qualifications.] the competing professional service offerors.

(g) The selection committee shall rank a minimum of three persons based on the selection criteria and send the ranking to the head of the purchasing agency. The contract file shall contain a copy of [the criteria established for the selection and] the [committee's] summary of qualifications for the ranking of each of the persons provided to the head of the purchasing agency [by the committee.] for contract negotiations.

[(e) The head of the purchasing agency shall evaluate the summary of qualifications for each of the persons provided by the screening committee and may conduct additional discussions with any of them. The head of the purchasing agency shall then rank the persons based on the selection criteria.]

(h) The head of the purchasing agency or designee shall negotiate a contract with the first ranked person, including a rate of compensation which is fair and reasonable, established in writing, and based upon the estimated value, scope, complexity, and nature of the services to be rendered. If a satisfactory contract cannot be negotiated with the first ranked person, negotiations with that person shall be formally terminated and negotiations with the second ranked person on the list shall commence. Failing accord with the second ranked person, negotiations with the next ranked person on the list shall commence. If a contract at a fair and reasonable price cannot be negotiated, the [screening] selection committee may be asked to submit a minimum of three additional persons for the head of the purchasing agency to [rank, and] resume negotiations in the same manner provided in this subsection. Negotiations shall be conducted confidentially.

[(f)] (i) Contracts awarded under this section in excess of the limits in section 103D-305 shall be posted electronically within seven days of the contract award by the chief procurement officer or designee and shall remain posted for at least one year. Information to be posted shall include[:], but not be limited to:

(1) The names of the [top five] persons submitted under subsection [(d) or, if the list submitted under subsection (d) is less than five, all of the persons submitted] (g);

(2) The name of the person or organization receiving the award;

(3) The dollar amount of the contract;

(4) The name of the head of the purchasing agency or designee [head] making the selection; and

(5) Any relationship of the principals to the official making the award.

[g] (j) Contracts for professional services of less than [$25,000] the limits in section 103D-305 may be negotiated by the head of the purchasing agency, with at least any two persons [who appear] on the list of qualified persons established pursuant to subsection (c). [Negotiations shall be conducted in the manner set forth in subsection (e), but without establishing any order of preference.]"

SECTION 6. Section 103D-701, Hawaii Revised Statutes, is amended by amending subsection (a) to read as follows:

(a) Any actual or prospective bidder, offeror, or contractor who is aggrieved in connection with the solicitation or award of a contract may protest to the chief procurement officer or a designee as specified in the solicitation.

(1) A protest shall be submitted in writing within five working days after the aggrieved person knows or should have known of the facts giving rise thereto; provided that a protest of an award or proposed award shall in any event be submitted in writing within five working days after the posting of award of the contract either under section 103D-302 or 103D-303, as applicable; provided further that no protest based upon the content of the solicitation shall be considered unless it is submitted in writing prior to the date set for the receipt of offers.

(2) In cases of awards made under the procedures of sections 103D-303 or 103D-304, unsuccessful offerors and non-selected professional service providers may submit a written request for debriefing to the chief procurement officer or designee within three working days after the posting of the award of the contract. Thereafter, the head of the purchasing agency shall provide the requestor a prompt debriefing in accordance with rules adopted by the policy board. Any protest by the requestor following debriefing shall be submitted in writing within three working days after the date of the debriefing.

SECTION 7. Sections 103D-1010, Hawaii Revised Statutes, is amended to read as follows:

"103D-1010. Purchases from qualified community rehabilitation programs. (a) Any governmental body, without advertising or calling for bids, may purchase goods, [or] services, or construction if such construction is valued at less than $500,000, provided by qualified community rehabilitation programs serving persons with disabilities that have indicated an interest in supplying the goods, [or] services, or construction, and on an equitable basis may apportion the business among the interested programs; provided that the goods, [and] services, and construction meet the specifications and needs of the purchasing agency and are purchased at a fair market price as determined by the [appropriate public] purchasing agency. [; and provided further that the programs comply with the following:]

(b) In making any purchase under this section, the purchasing agency must affirmatively determine that the program providing the goods, services, or construction:

(1) Meets all of the requirements of a qualified community rehabilitation program under section 103D-1001; and

(2) Maintains a disabled to non-disabled employee ratio equal to or in excess of three-to-one for work hours of direct labor at all times on the work contracted. 

[(b)] (c) The purchasing agency shall:

(1) Receive and review proposals submitted by qualified community rehabilitation programs to provide goods, [or] services, or construction, and determine if they are suitable for purchase by the agency;

(2) Negotiate the conditions and terms for the purchase, including the price of the offer, between the agency and the qualified community rehabilitation program; provided that the price of the offer shall not exceed the fair market price and there is assurance that the qualified community rehabilitation program proposal is in compliance with all administrative rules related to purchasing; and 

(3) Ensure that any goods, [or] service, or construction, purchased from a qualified community rehabilitation program shall not be placed on the Hawaii products list under section 103D-1002."

SECTION 8. Section 103D-1011, Hawaii Revised Statutes, is amended to read as follows:

"103D-1011 Qualified community rehabilitation program; proposals[ to provide goods and services]. Under this part, a [A] qualified community rehabilitation program shall be allowed [to sell only] a preference on any contracts for goods or services[, also to include building custodial and grounds maintenance services, to a governmental body]. In addition, a qualified community rehabilitation program shall be allowed a preference on contracts for construction of public works, if the cost of the project is less than $500,000. A community rehabilitation program seeking a preference shall submit a proposal [shall be submitted] to the purchasing agency containing the following information:

(1) A description of the goods, [or] service, or construction;

(2) The price of the goods, [or] service, or construction; and

(3) Documents and information necessary to qualify as a qualified community rehabilitation program under section 103D-1001."

SECTION 9. If any provision of this Act, or the application thereof to any person or circumstance is held invalid, the invalidity does not affect other provisions or applications of this Act which can be given effect without the invalid provision or application, and to that extent the provisions of this Act are severable.

SECTION 10. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 11. This Act shall take effect on July 1, 2003.

INTRODUCED BY:

_____________________________

BY REQUEST