HOUSE OF REPRESENTATIVES
THIRTIETH LEGISLATURE, 2019
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, increase accountability with performance on state contracts, and 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 part is to:
(1) Require that past performance be considered in future bid selection of contractors for sole source contracts and any competitive sealed bid or proposal contracts that exceeds the small purchase threshold; and
(2) Require procurement officers to consider specific factors, including past performance, when making a determination of offeror responsibility.
SECTION 2. 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, such as discounts, transportation costs, and total or life cycle costs. Past performance shall be evaluated in all bids expected to meet or exceed the small purchase threshold. 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 3. Section 103D-303, Hawaii Revised Statutes, is amended by amending subsection (e) to read as follows:
"(e) The request for proposals shall state the relative importance of price and other evaluation factors. Past performance shall be evaluated in all solicitations expected to meet or exceed the small purchase threshold."
SECTION 4. 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 5. Section 103D-310, Hawaii Revised Statutes, is amended to read as follows:
"§103D-310 Responsibility of offerors. (a) Purchases shall be made from, and contracts shall be awarded to, responsible prospective offerors only.
(a)] (b) Unless the policy board, by rules, specifies
otherwise, before submitting an offer, a prospective offeror, not less than ten
calendar days prior to the day designated for opening offers, shall give
written notice of the intention to submit an offer to the procurement officer
responsible for that particular procurement.
(b)] (c) Whether or not an intention to bid is
required, the procurement officer shall determine whether the prospective
offeror has the financial ability, past performance, resources, skills,
capability, and business integrity necessary to perform the work. For this purpose, the officer, in the
officer's discretion, may 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] the 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.
(c)] (d) All offerors, upon award of contract, shall
comply with all laws governing entities doing business in the State, including
chapters 237, 383, 386, 392, and 393.
Offerors shall produce documents to the procuring officer to demonstrate
compliance with this subsection. Any
offeror making a false affirmation or certification under this subsection shall
be suspended from further offerings or awards pursuant to section
103D-702. The procuring officer shall
verify compliance with this subsection for all contracts awarded pursuant to
sections 103D-302, 103D-303, 103D-304, and 103D-306, and for contracts and
procurements of $2,500 or more awarded pursuant to section 103D-305; provided
that the attorney general may waive the requirements of this subsection for
contracts for legal services if the attorney general certifies in writing that
comparable legal services are not available in this State.
(d)] (e) Information furnished by an offeror pursuant
to this section shall not be disclosed to any person except to law enforcement
agencies as provided by chapter 92F."
SECTION 6. Section 103D-709, Hawaii Revised Statutes, is amended by amending subsection (c) to read as follows:
Only parties to the protest made and decided pursuant to sections
103D-701, 103D-709(a), [
103D-310(b),] 103D-310(c), and
103D-702(g) may initiate a proceeding under this section. The party initiating the proceeding shall
have the burden of proof, including the burden of producing evidence as well as
the burden of persuasion. The degree or
quantum of proof shall be a preponderance of the evidence. All parties to the proceeding shall be
afforded an opportunity to present oral or documentary evidence, conduct
cross-examination as may be required, and present argument on all issues
involved. Fact finding under
section 91-10 shall apply."
SECTION 7. The purpose of this part is to form an initial procurement working group.
SECTION 8. (a) There is established the initial procurement working group, which shall be made up of procurement representatives from the state and county. The working group shall:
(1) Identify issues relating to existing procurement methods and collect data to determine the magnitude of the problem;
(2) Document existing practices and processes, including but not limited to procurement methods; preparation of solicitation documents; evaluation and basis of award, including the consideration of past performance when deemed appropriate; post award contract administration; suspension; and debarment;
(3) Identify lessons learned from case studies of projects identified as having bad contractors or subcontractors;
(4) Identify shortfalls, needs, gaps, or challenges in laws and rules, processes, knowledge, and resources;
(5) Find potential methods or mechanisms available to address the problems identified, including but not limited to the use of a past performance database, by:
(A) Examining the pros and cons of each potential method or mechanism;
(B) Determining the most promising methods or mechanisms to determine requirements for implementation, including but not limited to time, costs, and resources;
(C) Obtaining industry feedback; and
(D) Prioritizing for purposes of recommendations; and
(6) Recommend specific objective criteria to be used to evaluate the past performance of bidders in a competitive sealed bid procurement.
(b) The initial procurement working group shall consist of the following members or their designees:
(1) State procurement administrator, who shall serve as chair;
(3) Attorney General;
(4) Chief information officer;
(5) University of Hawaii chief procurement officer;
(6) Department of education chief procurement officer;
(7) Director of transportation;
(8) County of Hawaii chief procurement officer;
(9) County of Maui chief procurement officer;
(10) County of Kauai chief procurement officer; and
(11) City and county of Honolulu chief procurement officer.
(c) The initial procurement working group shall submit a report of its findings and recommendations, including any proposed legislation, to the legislature no later than November 1, 2020; provided that the working group shall bring together leaders and organizations from the construction and information technology industry to review and discuss any gaps or problems with the proposed recommendations prior to finalization of the working group's recommendations to the legislature.
SECTION 9. There is appropriated out of the general revenues of the State of Hawaii the sum of $250,000 or so much thereof as may be necessary for fiscal year 2019-2020 and the same sum or so much thereof as may be necessary for fiscal year 2020-2021 for the purposes of implementing this Act; provided that the sums shall be allocated as follows:
(1) $50,000 to develop and create a statewide past performance database; and
(2) $200,000 for the outsourcing of two full-time equivalent (2.0 FTE) positions to assist with developing rules, including facilitating community and government meetings, and benchmarking analysis in determining the most fair, objective, and descriptive procedures for the State.
The sums 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 on January 1, 2050.
Procurement; Past Performance; Appropriation; Working Group; Database
Requires procurement officers to complete past performance evaluations of contractors. Requires past performance to be considered in all sole source procurement and any competitive contracts that exceeds the small purchase threshold. Establishes an initial procurement working group that will evaluate and make recommendations to the legislature about the effectiveness of existing procurement methods. Requires the development and implementation of a statewide past performance database. Appropriates funds. Effective 1/1/2050. (SD1)
The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.