THE SENATE

S.B. NO.

2601

TWENTY-NINTH LEGISLATURE, 2018

S.D. 1

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 legislature finds that the procurement process is in need of clear legislative direction to award state contracts to responsible bidders or offerors through the state procurement process, to increase accountability with performance on state contracts, and to more efficiently utilize taxpayer dollars.  Some state contracts may currently be awarded to the lowest bidder through the invitation for bid process without regard to poor past performance.  Such bidders may be considered qualified despite poor performance on state, federal, or private contracts in the past, which may result in repeated inefficiencies and substandard work.

     The purpose of this Act is to:

     (1)  Establish factors to be included in any evaluation, consideration, or review of past performance required under part II of chapter 103D, Hawaii Revised Statutes, and ratings standards for those factors;

     (2)  Require past performance to be considered in future bid selection of a contractor; and

     (3)  Require departments to consider available assessments of previous performance on relevant and recent government and private contracts when making contract awards.

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

     "§103D-    Evaluation, consideration, or review of past performance.  (a)  Any evaluation, consideration, or review of past performance required under this part shall include a clear, non-technical description of the principal purpose of the contract or order subject to the evaluation, reflect how the contractor performed, include clear relevant information that accurately depicts the contractor's performance, and be based on objective facts supported by program and contract or order performance data.  The evaluations or reviews shall be tailored to the contract type, size, content, and complexity of the contractual requirements.

     (b)  Each evaluation, consideration, or review of past performance pursuant to subsection (a) shall be based on but not necessarily limited to the following applicable factors:

     (1)  Quality of the product or service supplied;

     (2)  Efforts to control cost;

     (3)  Timeliness and compliance with schedules;

     (4)  Conduct of management or business relations;

     (5)  Performance in small business subcontracting; and

     (6)  Other factors, including but not limited to late or nonpayment to subcontractors, human trafficking violations, tax delinquency, failure to report in accordance with contract terms and conditions, defective cost or pricing data, terminations, and suspension and debarments;

provided that each factor may contain sub-factors.

     (c)  Each factor or sub-factor under subsection (b) used in an evaluation, consideration, or review of past performance shall be evaluated and a supporting narrative provided.  Each evaluation factor or sub-factor under subsection (b) shall be rated in accordance with a five scale rating system as exceptional, very good, satisfactory, marginal, or unsatisfactory.

     (d)  For purposes of this section:

     "Exceptional" means performance meets contractual requirements and exceeds many to the government's benefit.  The contractual performance of the factor or sub-factor being evaluated was accomplished with few minor problems for which corrective actions taken by the contractor were highly effective.

     "Marginal" means performance does not meet some contractual requirements.  The contractual performance of the factor or sub-factor being evaluated reflects a serious problem for which the contractor has not yet identified corrective actions.  The contractor's proposed actions appear only marginally effective or were not fully implemented.

     "Satisfactory" means performance meets contractual requirements.  The contractual performance of the factor or sub-factor contains some minor problems for which corrective actions taken by the contractor appear or were satisfactory.

     "Unsatisfactory" means performance does not meet most contractual requirements and recovery is not likely in a timely manner.  The contractual performance of the factor or sub-factor contains a serious problem for which the contractor's corrective actions appear or were ineffective.

     "Very good" means performance meets contractual requirements and exceeds some to the government's benefit.  The contractual performance of the factor or sub-factor being evaluated was accomplished with some minor problems for which corrective actions taken by the contractor were effective."

     SECTION 3.  Section 103D-104, Hawaii Revised Statutes, is amended as follows by amending the definition of "responsible bidder or offeror" to read:

     ""Responsible bidder or offeror" means a person who has the capability in all respects to perform fully the contract requirements, and the integrity and reliability [which] that will assure good faith performance[.], pursuant to the responsibility determination standards adopted by the policy board."

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

     "(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[,] as possible, such as discounts, transportation costs, [and] total or life cycle costs[.], and the bidder's past performance on state, federal, or private contracts of similar scope for public agencies.  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-303, Hawaii Revised Statutes, is amended by amending subsection (g) to read as follows:

     "(g)  Award shall be made to the responsible offeror whose proposal is determined in writing to be the most advantageous, taking into consideration price and the evaluation factors set forth in the request for proposals[.], which shall include the offeror's past performance on state, federal, or private contracts of similar scope for public agencies.  No [other factors or] criteria [shall] may be used in the evaluation[.] that are not set forth in the request for proposals.  The contract file shall contain the basis on which the award is made."

     SECTION 6.  Section 103D-306, Hawaii Revised Statutes, is amended by amending subsection (a) to read as follows:

     "(a)  A contract may be awarded for goods, services, or construction without competition when the head of a purchasing agency determines in writing that there is only one source for the required good, service, or construction, the determination is reviewed and approved by the chief procurement officer, the written determination is posted in the manner described in rules adopted by the policy board, a review of past performance has been conducted, and no objection is outstanding.  The written determination, any objection, past performance evaluations relied upon, and a written summary of the disposition of any objection shall be included in the contract file."

     SECTION 7.  Section 103D-310, Hawaii Revised Statutes, is amended by amending subsection (b) to read as follows:

     "(b)  Whether or not an intention to bid is required, the procurement officer shall [determine] make a responsibility determination for any awardee, pursuant to rules adopted by the policy board, including whether the prospective offeror has the financial ability, resources, skills, capability, and business integrity necessary to perform the work.  For [this] the purpose[, the] of making a responsibility determination, the procurement officer shall possess or obtain available information sufficient to be satisfied that a prospective offeror meets the applicable standards set forth by the policy board.  The procurement officer shall consider past performance of the offeror as it applies to a responsibility determination for the current solicitation.  The officer, in the officer's discretion, may also require any prospective offeror to submit answers, under oath, to questions contained in a standard form of questionnaire to be prepared by the policy board.  Whenever it appears from answers to the questionnaire or otherwise, that the prospective offeror is not fully qualified and able to perform the intended work, a written determination of nonresponsibility of an offeror shall be made by the head of the purchasing agency, in accordance with rules adopted by the policy board.  The unreasonable failure of an offeror to promptly supply information in connection with an inquiry with respect to responsibility may be grounds for a determination of nonresponsibility with respect to such offeror.  The decision of the head of the purchasing agency shall be final unless the offeror applies for administrative review pursuant to section 103D-709."

     SECTION 8.  Section 103D-320, Hawaii Revised Statutes, is amended to read as follows:

     "[[]§103D-320[]]  Retention of procurement records[.]; evaluations.  All procurement records shall be retained and disposed of in accordance with chapter 94 and records retention guidelines and schedules approved by the comptroller[.]; provided that upon completion of a procurement contract, the department that issued the request for proposals shall evaluate the work and performance of the respective contractors and maintain the evaluations in the department's files."

     SECTION 9.  There is appropriated out of the general revenues of the State of Hawaii the sum of $           or so much thereof as may be necessary for fiscal year 2018-2019 for the purposes of implementing this Act.

     The sum appropriated shall be expended by the state procurement office for the purposes of this Act.

     SECTION 10.  This Act does not affect rights and duties that matured, penalties that were incurred, and proceedings that were begun before its effective date.

     SECTION 11.  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 the Act that can be given effect without the invalid provision or application, and to this end the provisions of this Act are severable.

     SECTION 12.  Statutory material to be repealed is bracketed and stricken.  New statutory material is underscored.

     SECTION 13.  This Act shall take effect upon its approval; provided that section 9 shall take effect on July 1, 2018.

 


 


 

Report Title:

Procurement; Past Performance; Criteria; Sole Source; Evaluation; Appropriation

 

Description:

Requires past performance to be factored into future bid selection of a contractor.  Establishes factors to be included in any evaluation, consideration, or review of past performance required pursuant to part II of chapter 103D, Hawaii Revised Statutes, and ratings standards for those factors.  Requires past performance to be considered in sole source procurement.  Requires that upon completion of a procurement contract, the department that issued the request for proposal shall evaluate the work and performance of the respective contractors and maintain the evaluations in the department's files.  Appropriates funds.  (SD1)

 

 

 

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