STAND. COM. REP. NO. 533
RE: H.B. No. 1054
Honorable Scott K. Saiki
Speaker, House of Representatives
Thirty-First State Legislature
Regular Session of 2021
State of Hawaii
Your Committee on Government Reform, to which was referred H.B. No. 1054 entitled:
"A BILL FOR AN ACT RELATING TO PROCUREMENT,"
begs leave to report as follows:
Your Committee received testimony in support of this measure from the Department of Transportation and Airlines Committee of Hawaii. Your Committee received testimony in opposition to this measure from the Subcontractors Association of Hawaii. Your Committee received comments on this measure from the State Procurement Office.
Your Committee finds that the current cash or protest bond amount for a party initiating an administrative proceeding for review under the Hawaii Public Procurement Code is too low for public works projects. The Hawaii Public Procurement Code was established to provide fairness to the public, increase public confidence, and foster broad-based competition, fiscal responsibility, and efficiency in the procurement process. Your Committee further finds that unfounded and frivolous protests impact procuring agencies by delaying projects, which may cause funding to lapse and project costs to increase.
Your Committee has amended this measure by:
(1) Requiring the cash or protest bond amount to be:
(A) One percent of the estimated value of the contract if the contract's estimated value is less than $1,000,000; and
(B) Two percent of the estimated value of the contract if the contract's estimated value is $1,000,000 or more; and
Your Committee agrees with the concerns raised by the Subcontractors Association of Hawaii that the cash or protest bound amounts proposed by this measure, as originally drafted, were too high. The high amounts may be too large a burden to take for a contractor if that contractor finds that something has gone awry with the procurement process. Your Committee has accordingly amended the cash or protest bound amount in light of these concerns and to encourage continued conversation on this amended measure.
As affirmed by the record of votes of the members of your Committee on Government Reform that is attached to this report, your Committee is in accord with the intent and purpose of H.B. No. 1054, as amended herein, and recommends that it pass Second Reading in the form attached hereto as H.B. No. 1054, H.D. 1, and be referred to your Committee on Finance.
Respectfully submitted on behalf of the members of the Committee on Government Reform,
ANGUS L.K. McKELVEY, Chair