HOUSE OF REPRESENTATIVES

H.B. NO.

882

THIRTY-FIRST LEGISLATURE, 2021

H.D. 1

STATE OF HAWAII

S.D. 2

 

 

 

 

 

A BILL FOR AN ACT

 

 

RELATING TO PROCUREMENT.

 

 

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

 


PART I

SECTION 1. Chapter 103F, Hawaii Revised Statutes, is amended by adding a new section to part IV to be appropriately designated and to read as follows:

"103F-   Fair and reasonable pricing policy; cost or pricing data. (a) For each contracting action under this chapter, including any change orders or contract modifications that increase the original contract amount, the purchasing agency shall make a written determination that the amount of the contracting action is fair and reasonable.

(b) In determining whether the amount of the contracting action is fair and reasonable, the purchasing agency shall obtain the data necessary to perform a cost or price analysis to determine that the amount of the contracting action is a fair and reasonable price."

SECTION 2. Section 103D-201, Hawaii Revised Statutes, is amended by amending subsection (b) to read as follows:

"(b) The policy board shall consist of [seven] six members. Notwithstanding the limitations of section 78-4, the members of the board shall include:

(1) The comptroller;

(2) A county employee with significant high-level procurement experience; and

(3) [Five] Four persons who shall not otherwise be full-time employees of the State or any county; provided that at least one member shall be a [certified] professional in the field of procurement, at least one member shall have significant high-level, federal procurement experience, at least one member shall have significant experience in the field of procurement relating to construction, and at least [two members shall have significant experience in the field of health and human services.] one member shall represent the Hawaii Alliance of Nonprofit Organizations; Protecting Hawaii's Ohana, Children, Under-Served, Elderly, and Disabled; or a similar organization.

Each appointed member shall have demonstrated sufficient business or professional experience to discharge the functions of the policy board. The initial and subsequent members of the policy board, other than the comptroller, shall be appointed by the governor [from a list of three individuals for each vacant position, submitted by a nominating committee composed of four individuals chosen as follows: two persons appointed by the governor; one person appointed by the president of the senate; and one person appointed by the speaker of the house]. Except as provided in this section, the selection and terms of the policy board members shall be subject to the requirements of section 26-34. No member of the policy board shall act concurrently as a chief procurement officer. The members of the policy board shall devote such time to their duties as may be necessary for the proper discharge thereof."

SECTION 3. Section 103F-404, Hawaii Revised Statutes, is amended to read as follows:

"[[]103F-404[]] Treatment purchase of services. (a) Treatment services may be purchased in accordance with this section if [either or both of] the following circumstances are applicable:

[(1) Such services may become necessary from time to time, but cannot be anticipated accurately on an annual or biennial basis; and

(2) When deferring treatment until solicitation, provider selection, and contract formation can be completed, the problem needing treatment would be rendered worse than at the time of diagnosis or assessment.

Contracts for treatment services shall be awarded on the basis of demonstrated competence and qualification for the type of service required, and at fair and reasonable prices.

(b) At a minimum, before the beginning of each fiscal year, the administrator shall publish a notice describing the types of treatment services that may be needed throughout the year on a periodic basis and inviting providers engaged in providing these treatment services to submit current statements of qualification and expressions of interest to the office. The chief procurement officer may specify a uniform format for statements of qualifications.]

(1) The need for treatment services is unanticipated and arises from time to time;

(2) The required services are for a one-time purchase for not more than $100,000 and no longer than one year;

(3) The services are industry standard services and are generally accepted practices by the industry or profession; and

(4) The award of a contract is based on demonstrated competence and qualification for the type of service required and at fair and reasonable prices.

(b) The head of the purchasing agency, or a designee, shall, at a minimum, publish a notice describing the types of treatment services that may be needed throughout the fiscal year on an as-needed basis and invite providers engaged in providing these treatment services to submit current statements of qualification and expressions of interest to the purchasing agency. Providers may amend these statements by filing an amended or new statement prior to the date designated for submission.

(c) The [administrator] head of the purchasing agency shall form an initial review committee for each profession, consisting of a minimum of three employees from a state agency or agencies with sufficient education, training, and licenses or credentials to evaluate the statements of qualifications which the [administrator] head of the purchasing agency receives in response to the notice published pursuant to subsection (b). The committee shall review and evaluate the submissions and other pertinent information, including references and reports, and prepare a list of qualified providers to provide treatment services during the fiscal year. Providers included on the list of qualified treatment providers may amend their statements of qualifications as necessary or appropriate. Providers shall immediately inform the [administrator] head of the purchasing agency of any changes in information furnished [which] that would disqualify the provider from being considered for a contract award.

(d) When the need to purchase treatment services arises, the head of a purchasing agency shall select the provider most qualified to provide the needed treatment from the list of qualified providers.

(e) The head of the purchasing agency, or a designee, shall negotiate a contract, including a rate of compensation [which] that is fair and reasonable, established in writing, and based upon the estimated value, scope, nature, and complexity of the treatment services to be rendered, or use the rate established by the [administrator,] head of the purchasing agency, if any. If negotiations fail, upon written notice of an impasse to the provider selected under subsection (d), the head of the purchasing agency shall choose another provider from the list of qualified providers, and conduct further negotiations. Negotiations shall be conducted confidentially.

(f) Contracts for treatment services in excess of $100,000 or that last for more than one year shall [be procured using section 103F-402, competitive purchase of services, unless a waiver of this subsection is approved by the chief procurement officer.] utilize an applicable method of procurement."

SECTION 4. Section 103F-405, Hawaii Revised Statutes, is amended to read as follows:

"[[]103F-405[]] Small purchases. Purchases of health and human services of less than [$25,000] $100,000 are small purchases, and shall be made in accordance with [section 103D-305 and] rules adopted by the policy board to implement [that] this section."

SECTION 5. Section 103F-202, Hawaii Revised Statutes, is repealed.

["[103F-202] Community council. (a) There is established a community council on purchase of health and human services. The community council shall be comprised of no more than nine voting members, and one non-voting, ex-officio member of the interagency committee on purchase of health or human services designated by the majority of the members of the committee. There shall be a member from each county, except the county of Kalawao, and up to five members interested in health, human services, employment, or the provision of services to children and youth.

(b) Voting members shall be appointed by the governor and serve for four years. Each voting member shall serve until the member's successor is appointed. Section 26-34 shall apply insofar as it relates to the number of terms and consecutive number of years a member may serve on the council.

(c) Members shall serve without compensation, but shall be reimbursed for actual expenses, including travel expenses, necessary for the performance of their duties.

(d) The community council shall advise the administrator about or assist the administrator in:

(1) Market or business conditions facing providers;

(2) Securing input from providers to facilitate agency decision-making to assess needs, plan, budget, and purchase health and human services;

(3) Facilitating provider participation in the process used by state agencies to plan for and purchase health and human services;

(4) Establishing schedules for planning and purchasing health and human services in relation to the annual and biennial budget cycles;

(5) Developing criteria to evaluate proposals to provide health and human services, and for restrictive purchases under section 103F-403; and

(6) The needs of purchasing agencies and providers for education and training to improve planning for or purchasing of health and human services."]

PART II

SECTION 6. The legislature finds that under the State's procurement code, an aggrieved party, that submitted a bid for a state project that was not awarded the bid, may protest the bid award. The legislature further finds that procurement protest review can be lengthy, causing project delays, thereby increasing project costs that are borne by taxpayers. Thus, it is imperative that the review process for protests be completed in a timely manner to reduce the cost of state projects. Establishing a deadline for bid protests to be reviewed and resolved would expedite the protest review process and reduce the cost associated with state-awarded projects.

The purpose of this part is to create time limits to resolve protests to the awards of major construction projects to prevent costly delays and major negative impacts on future state infrastructure enhancements.

SECTION 7. Section 103D-701, Hawaii Revised Statutes, is amended by amending subsection (c) to read as follows:

"(c) The chief procurement officer or a designee shall resolve any protest as expeditiously as possible. If the protest is not resolved by mutual agreement, the chief procurement officer or a designee shall [promptly] issue a written decision [in writing] to uphold or deny the protest. The decision shall:

(1) State the reasons for the action taken; and

(2) Inform the protestor of the protestor's right to an administrative proceeding as provided in this part, if applicable.

If the protest of a construction project valued at or over $3,000,000 that is awarded pursuant to section 103D-302 or 103D‑303 is not resolved by mutual agreement, the chief procurement officer or a designee shall issue a written decision to uphold or deny the protest within seventy-five calendar days of receipt of the protest; unless extenuating circumstances require additional time, which shall not exceed an additional forty-five calendar days."

PART III

SECTION 8. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 9. This Act shall take effect on July 1, 2112.


 


 

Report Title:

Procurement; Purchase of Health and Human Services; Procurement Policy Board; Treatment Services; Community Council

 

Description:

Requires purchasing agencies to make a written determination that the amount of a contracting action for purchases of health and human services is fair and reasonable. Amends the selection process and composition of the procurement policy board. Amends the circumstances for when treatment services may be purchased and the procedure to purchase such services. Increases the small purchase threshold. Repeals the establishment of the community council on purchase of health and human services. Requires the chief procurement officer to expeditiously resolve any protest. Creates time limits to resolve protests to the awards of major construction projects valued at or above three million dollars. Effective 7/1/2112. (SD2)

 

 

 

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