Report Title:

Electronic Procurement; Competitive Reverse Auction

Description:

Allows purchase of goods and services, and awarding of construction contracts, through online electronic procurement system. (SD2)

THE SENATE

S.B. NO.

1263

TWENTY-SECOND LEGISLATURE, 2003

S.D. 2

STATE OF HAWAII

 


 

A BILL FOR AN ACT

 

RELATING TO ELECTRONIC PROCUREMENT.

 

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

SECTION 1. The legislature finds that through chapter 103D, the state procurement code, it is the policy of the State to foster full and open competition to provide the State and counties the benefit of lowered costs.

The purpose of this Act is to improve procurement efficiency by utilizing the advancements in information technology in the electronic procurement area, to achieve: (1) automation of the procurement process; (2) collection of comprehensive spending data; (3) reduction in the procurement cycle time; and (4) reduction in the cost of procured goods and services.

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

"§103D- Competitive reverse auction. (a) The policy board shall adopt rules to allow bidders to participate in a competitive reverse auction through electronic bidding in which the award shall be made to the lowest responsible, responsive bidder. When the head of a purchasing agency determines that a competitive reverse auction for goods is more advantageous than other source selection methods provided by this chapter, a contract for goods may be awarded by competitive reverse auction.

(b) Notice of the invitation for competitive reverse auction shall be given in the same manner as provided in section 103D-302(c). An invitation for competitive reverse auction shall include a purchase description and all contractual terms and conditions applicable to the procurement. The invitation for competitive reverse auction shall designate opening and closing dates and times for the receipt of electronic bids. At the opening date and time, the purchasing agency shall begin accepting real time electronic bids, with all prices posted electronically on the Internet and updated on a real time basis. The invitation for competitive reverse auction shall remain open until the designated closing date and time. At any time before the designated closing date and time, a bidder may lower the price of its bid below the lowest bid electronically posted. The purchasing agency shall require that bidders register before the designated opening date and time, and agree to any terms and conditions of the competitive reverse auction.

(c) Corrections, withdrawals, or cancellations shall be permitted pursuant to section 103D-302(g). Section 103D-302(h) shall apply if all competitive reverse auction bids exceed available funds."

SECTION 3. Section 103D-104, Hawaii Revised Statutes, is amended by adding three new definitions to be appropriately inserted and to read:

""Electronic bidding" means the solicitation and receipt of offers for the procurement of goods, services, and construction by which offers may be accepted and contracts may be executed through an electronic procurement system.

"Competitive reverse auction" means a procurement process by which vendors compete to provide goods at the lowest price in an electronic real time environment.

"Real time" means actual elapsed time."

SECTION 4. Section 103D-301, Hawaii Revised Statutes, is amended to read as follows:

"[[]§103D-301[]] Methods of source selection. Unless otherwise authorized by law, all contracts shall be awarded [by competitive sealed bidding pursuant to section 103D-302, except] as provided in:

(1) Section 103D-302 (Competitive sealed bidding);

(2) Section 103D- (Competitive reverse auction);

[(1)] (3) Section 103D-303 (Competitive sealed proposals);

[(2)] (4) Section 103D-304 (Professional services procurement);

[(3)] (5) Section 103D-305 (Small purchases);

[(4)] (6) Section 103D-306 (Sole source procurement); and

[(5)] (7) Section 103D-307 (Emergency procurements)."

SECTION 5. Section 103D-305, Hawaii Revised Statutes, is amended to read as follows:

"§103D-305 Small purchases; prohibition against parceling.

(a) Procurements of less than $25,000 for goods, services, or construction shall be made in accordance with procedures set forth in rules adopted by the policy board [that are] designed to ensure administrative simplicity and as much competition as is practicable; provided: [that multiple]

(1) Multiple expenditures shall not be created at the inception of a transaction or project so as to evade the requirements of this chapter; [and provided further that procurement]

(2) Procurement requirements shall not be artificially divided or parceled so as to constitute a small purchase under this section; and

(3) Awards of $5,000 to less than $25,000 shall be posted electronically.

(b) Notwithstanding sections 103D-302 to 103D-304, procurements of $25,000 to $100,000 for goods, services, and construction may be made in accordance with subsection (a); provided that the procurement is made through electronic bidding."

SECTION 6. Section 103D-302, Hawaii Revised Statutes, is amended by amending subsection (a) to read as follows:

"(a) Contracts shall be awarded by competitive sealed bidding except as otherwise provided in section 103D-301. Awards of contracts by competitive sealed bidding may be made after single or multi-step bidding. Competitive sealed bidding does not include negotiations with bidders after the receipt and opening of bids. Award is based on the criteria set forth in the invitation for bids. Procurements of $25,000 to $100,000 may be made in accordance with section 103D-305; provided that the procurement is made through electronic bidding."

SECTION 7. Section 103D-303, Hawaii Revised Statutes, is amended by amending subsection (a) to read as follows:

"(a) Competitive sealed proposals may be utilized to procure goods, services, or construction designated in rules adopted by the procurement policy board as goods, services, or construction which are either not practicable or not advantageous to the State to procure by competitive sealed bidding. Competitive sealed proposals may also be utilized when the head of a purchasing agency determines in writing that the use of competitive sealed bidding is either not practicable or not advantageous to the State. Procurements of $25,000 to $100,000 may be made in accordance with section 103D-305; provided that the procurement is made through electronic bidding."

SECTION 8. Section 103D-304, Hawaii Revised Statutes, is amended by amending subsection (a) to read as follows:

"(a) Professional services shall be procured in accordance with sections 103D-302, 103D-303, 103D-305, 103D-306, or 103D-307, or this section. Contracts for professional services shall be awarded on the basis of demonstrated competence and qualification for the type of services required, and at fair and reasonable prices. Procurements of $25,000 to $100,000 may be made in accordance with section 103D-305; provided that the procurement is made through electronic bidding."

SECTION 9. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 10. This Act shall take effect on January 1, 2004.