H.B. NO.














relating to procurement.





SECTION 1. Chapter 103D, part V, Hawaii Revised Statutes, is amended as follows:

1. By amending its title to read:


2. By adding two new sections to read:

"103D-    Contract administration office functions. (a) The contract administrator shall perform contract administration functions in accordance with this chapter, associated administrative rules adopted by the procurement policy board, the contract terms, and, unless otherwise agreed to in an interagency agreement, the applicable rules of the procuring agency.

(b) The procurement officer may delegate the following contract administration functions to a contract administrator:

(1) Prepare evaluations of contractor performance;

(2) Review the contractor's compensation structure;

(3) Review the contractor's insurance plans;

(4) Conduct post-award orientation conferences;

(5) Determine the allowability of costs suspended or disapproved as required, direct the suspension or disapproval of costs when there is reason to believe costs should be suspended or disapproved, and approve final payment;

(6) Issue notices of intent to disallow or not recognize costs;

(7) Attempt to resolve issues in controversy;

(8) Determine the contractor's compliance with cost accounting standards and disclosure statements, if applicable;

(9) Negotiate price adjustments and execute supplemental agreements;

(10) Ensure timely notification by the contractor of any anticipated overrun or underrun of the estimated cost under cost-reimbursement contracts;

(11) Monitor the contractor's financial condition and advise the procurement officer, when it jeopardizes contract performance;

(12) Issue work requests under maintenance, overhaul, and modification contracts;

(13) Negotiate and assist the procurement officer in executing contractual documents for settlement of partial and complete contract terminations for convenience;

(14) Negotiate and assist the procurement officer in executing contractual documents settling cancellation charges under multiyear contracts;

(15) Process and execute novation and change of name agreements;

(16) Perform property administration;

(17) Perform necessary screening, redistribution, and disposal of contractor inventory;

(18) Perform production support, surveillance, and status reporting, including timely reporting of potential and actual slippages in contract delivery schedules;

(19) Monitor contractor industrial labor relations matters under the contract; apprise the procurement officer and, if designated by the agency, the cognizant labor relations advisor, of actual or potential labor disputes; and coordinate the removal of urgently required material from the strikebound contractor's plant upon instruction from, and authorization of, the procurement officer;

(20) Ensure contractor compliance with contractual quality assurance requirements;

(21) Ensure contractor compliance with contractual safety requirements;

(22) Perform engineering surveillance to assess compliance with contractual terms for schedule, cost, and technical performance in the areas of design, development, and production;

(23) Evaluate for adequacy and perform surveillance of contractor engineering efforts and management systems that relate to design, development, production, engineering changes, subcontractors, tests, management of engineering resources, reliability and maintainability, data control systems, configuration management, and independent research and development;

(24) Review and evaluate for technical adequacy the contractor's logistics support, maintenance, and modification programs;

(25) Report to the procurement office any inadequacies noted in specifications;

(26) Perform analyses of contractor cost proposals;

(27) Review, analyze, and submit comments and recommendations to the procurement officer regarding engineering and design studies proposed by a contractor, as required;

(28) Review and submit comments to the procurement officer regarding engineering change proposals for proper classification, and, when required for need, technical adequacy of design, producibility, and impact on quality, reliability, schedule, and cost;

(29) Assist in evaluating and make recommendations for acceptance or rejection of waivers and deviations;

(30) Approve the placement of subcontracts;

(31) Review, evaluate, and approve small business master subcontracting plans, if applicable;

(32) Assign and perform supporting contract administration;

(33) Ensure timely submission of required reports;

(34) Issue administrative changes, correcting errors or omissions in typing, contractor address, facility or activity code, remittance address, computations that do not require additional contract funds, and other similar changes;

(35) Obtain contractor proposals for any contract price adjustments resulting from amended shipping instructions and review all amended shipping instructions on a periodic, consolidated basis to ensure that adjustments are timely made;

(36) Accomplish administrative closeout procedures;

(37) Support the program, product, and project offices regarding program reviews, program status, program performance, and actual or anticipated program problems; and

(38) Monitor the contractor's environmental practices for adverse impact on contract performance or contract cost, and for compliance with environmental requirements specified in the contract.

(c) Any additional contract administration functions not specified in subsection (b), or not otherwise delegated, shall remain the responsibility of the head of the purchasing agency.

103D-    Contract administration. (a) The policy board shall adopt rules for the administration of contracts, which shall include:

(1) Functions the procurement officer may delegate to the contract administrator;

(2) Oversight responsibilities and inherently governmental duties; and

(3) Contractor performance evaluation procedures and contract performance information."

SECTION 2. The state procurement office shall submit a progress report on the implementation of this Act, including any proposed legislation, to the legislature no later than twenty days prior to the convening of the regular session of 2022.

SECTION 3. New statutory material is underscored.

SECTION 4. This Act shall take effect on July 1, 2021.






Report Title:

Contract Administration Office; Functions; Procurement



Establishes the functions of the contract administration office. Requires the procurement policy board to adopt rules for the administration of contracts. Requires the state procurement office to submit a progress report to the legislature.




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