H.B. NO.



H.D. 2


S.D. 2















     SECTION 1.  The legislature finds that in this period of high economic turmoil, procedural changes are necessary to enable the State to achieve a quick recovery and to provide effective economic stimulation.  The legislature further finds that Hawaii's public procurement process is inefficient and antiquated.  Procedures require protracted periods of time between each procurement step.  Currently, the awarding of a contract is subject to prolonged review, thereby preventing government projects from proceeding in a timely manner.

     Senate Concurrent Resolution No. 132, S.D. 1, Regular Session of 2009, established a task force to determine the economic contributions of the construction industry in Hawaii.  As directed in the concurrent resolution, the task force has developed a series of proposals for state actions to preserve and create new jobs in the local construction industry.  The intent of this Act is to implement one of the task force's proposals.

     Accordingly, the purpose of this Act is to amend chapter 103D, Hawaii Revised Statutes, to require certain state and county agencies to award public contracts on bid proposals within thirty days of the bid opening date.  In doing so, however, it is also the purpose of this Act to strike a balance between expedited procedures and necessary accountability and transparency.

     SECTION 2.  Section 103D-102, Hawaii Revised Statutes, is amended to read as follows:

     "§103D-102  Application of this chapter.  (a)  This chapter shall apply to all procurement contracts made by governmental bodies whether the consideration for the contract is cash, revenues, realizations, receipts, or earnings, any of which the State receives or is owed; in-kind benefits; or forbearance; provided that nothing in this chapter or rules adopted hereunder shall prevent any governmental body from complying with the terms and conditions of any other grant, gift, bequest, or cooperative agreement.

     (b)  Notwithstanding subsection (a), this chapter shall not apply to contracts by governmental bodies:

     (1)  Solicited or entered into before July 1, 1994, unless the parties agree to its application to a contract solicited or entered into prior to July 1, 1994;

     (2)  To disburse funds, irrespective of their source:

         (A)  For grants or subsidies as those terms are defined in section 42F-101, made by the State in accordance with standards provided by law as required by article VII, section 4, of the State Constitution; or by the counties pursuant to their respective charters or ordinances;

         (B)  To make payments to or on behalf of public officers and employees for salaries, fringe benefits, professional fees, or reimbursements;

         (C)  To satisfy obligations that the State is required to pay by law, including paying fees, permanent settlements, subsidies, or other claims, making refunds, and returning funds held by the State as trustee, custodian, or bailee;

         (D)  For entitlement programs, including public assistance, unemployment, and workers' compensation programs, established by state or federal law;

         (E)  For dues and fees of organizations of which the State or its officers and employees are members, including the National Association of Governors, the National Association of State and County Governments, and the Multi-State Tax Commission;

         (F)  For deposit, investment, or safekeeping, including expenses related to their deposit, investment, or safekeeping;

         (G)  To governmental bodies of the State;

         (H)  As loans, under loan programs administered by a governmental body; and

         (I)  For contracts awarded in accordance with chapter 103F;

     (3)  To procure goods, services, or construction from a governmental body other than the University of Hawaii bookstores, from the federal government, or from another state or its political subdivision;

     (4)  To procure the following goods or services [which] that are available from multiple sources but for which procurement by competitive means is either not practicable or not advantageous to the State:

         (A)  Services of expert witnesses for potential and actual litigation of legal matters involving the State, its agencies, and its officers and employees, including administrative quasi-judicial proceedings;

         (B)  Works of art for museum or public display;

         (C)  Research and reference materials including books, maps, periodicals, and pamphlets, which are published in print, video, audio, magnetic, or electronic form;

         (D)  Meats and foodstuffs for the Kalaupapa settlement;

         (E)  Opponents for athletic contests;

         (F)  Utility services whose rates or prices are fixed by regulatory processes or agencies;

         (G)  Performances, including entertainment, speeches, and cultural and artistic presentations;

         (H)  Goods and services for commercial resale by the State;

         (I)  Services of printers, rating agencies, support facilities, fiscal and paying agents, and registrars for the issuance and sale of the State's or counties' bonds;

         (J)  Services of attorneys employed or retained to advise, represent, or provide any other legal service to the State or any of its agencies, on matters arising under laws of another state or foreign country, or in an action brought in another state, federal, or foreign jurisdiction, when substantially all legal services are expected to be performed outside this State;

         (K)  Financing agreements under chapter 37D; and

         (L)  Any other goods or services which the policy board determines by rules or the chief procurement officer determines in writing is available from multiple sources but for which procurement by competitive means is either not practicable or not advantageous to the State;

     (5)  [Which] That are specific procurements expressly exempt from any or all of the requirements of this chapter by:

         (A)  References in state or federal law to provisions of this chapter or a section of this chapter, or references to a particular requirement of this chapter; and

         (B)  Trade agreements, including the Uruguay Round General Agreement on Tariffs and Trade (GATT) [which] that require certain non-construction and non-software development procurements by the comptroller to be conducted in accordance with its terms; and

     (6)  With a bidder or offeror who is a United States General Services Administration-approved sole source vendor, who shall be exempt from complying with section 103D-302, 103D-303, or 103D-304, as applicable, in any procurement funded by state and federal matching funds, if the bidder or offeror was responsible for obtaining and was the recipient of the federal funds.

     (c)  Notwithstanding subsection (a), this chapter shall not apply to contracts made by any regional system board of the Hawaii health systems corporation.

     (d)  Governmental bodies making procurements which are exempt from this chapter are nevertheless encouraged to adopt and use provisions of this chapter and its implementing rules as appropriate; provided that the use of one or more provisions shall not constitute a waiver of the exemption conferred and subject the procurement or the governmental body to any other provision of this chapter.

     (e)  Notwithstanding any other statute or administrative rule relating to procurement, contracts for projects of the state departments of Hawaiian home lands and transportation, county boards of water supply, and county departments of housing, planning and permitting, and transportation shall be awarded within thirty days of the bid opening date; provided that:

     (1)  The limitation shall not apply if the lowest responsible bid exceeds available funding;

     (2)  An extension, not exceeding      business days, shall be permitted if the extension will provide the opportunity for further negotiations with the lowest responsible bidder relating to considerations that could result in benefits to the public; and

     (3)  Contracts for design professional services furnished by licensees under chapter 464 shall be awarded within forty-five days of the bid opening date."


     SECTION 3.  Chapter 103D, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:

     "§103D‑    Gifts to the State not procurement contract.  For purposes of this chapter, a gift to the State shall not be deemed or to constitute a procurement contract and shall not require a procurement contract in order to be accepted by the State as a gift.

     For purposes of this section, "gift" refers to donations of material, labor, equipment, or other appropriate objects of donation."


     SECTION 4.  Statutory material to be repealed is bracketed and stricken.  New statutory material is underscored.

     SECTION 5.  This Act shall take effect on July 1, 2050; provided that this Act shall be repealed on July 1, 2012; and provided further that, on July 1, 2012, section 103D-102, Hawaii Revised Statutes, shall be reenacted in the form in which it read prior to the effective date of Act 175, Session Laws of Hawaii 2009.




Report Title:

Construction Task Force; Procurement; Thirty Days



Requires contracts awarded to projects of the departments of Hawaiian home lands and transportation; county boards of water supply; and county departments of housing, planning and permitting, and transportation to be awarded within 30 days of the bid opening date, subject to sufficient available funding and possible further negotiations to benefit the public.  Requires contracts by these agencies for design professional services to be awarded within 45 days of the bid opening date.  Specifies that gifts made to the State shall not constitute or require a procurement contract.  Sunsets on July 1, 2012.  Effective July 1, 2050.  (SD2)




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