Report Title:

Procurement contracts for construction; penalties/incentives

 

Description:

Provides that state procurement policy board will adopt rules concerning the inclusion of contract provisions granting incentives to complete public projects early and penalties for late completion.

 

THE SENATE

S.B. NO.

449

TWENTY-SECOND LEGISLATURE, 2003

 

STATE OF HAWAII

 


 

A BILL FOR AN ACT

 

RELATING TO PUBLIC PROCUREMENT.

 

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

SECTION 1. The purpose of this Act is to provide for incentives for early completion, and penalties for late completion, of construction of public projects under the state public procurement code.

SECTION 2. Chapter 103D-501, Hawaii Revised Statutes, is amended by amending subsection (a) to read as follows:

"(a) The policy board shall adopt rules requiring the inclusion of contract clauses providing for adjustments in prices, time of performance, or other contract provisions, as appropriate, and covering the following subjects:

(1) The unilateral right of the governmental body to order in writing:

(A) Changes in the work within the scope of the contract; and

(B) Changes in the time of performance of the contract that do not alter the scope of the contract work;

(2) Variations occurring between estimated quantities of work in a contract and actual quantities;

(3) Suspension of work ordered by the governmental body; [and]

(4) Site conditions differing from those indicated in the contract, or ordinarily encountered, except that differing site conditions clauses established by these rules need not be included in a contract:

(A) When the contract is negotiated;

(B) When the contractor provides the site or design; or

(C) When the parties have otherwise agreed with respect to the risk of differing site conditions[.]; and

(5) With respect to construction contracts, monetary penalties for late completion of the work and monetary incentives for early completion of the work. Such penalties and incentives shall be determined on a sliding scale corresponding to the difference in time between the scheduled completion date and the actual completion date."

SECTION 7. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 8. This Act shall take effect upon approval.

INTRODUCED BY:

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