Bill Text: HI HB1671 | 2012 | Regular Session | Amended
Bill Title: Procurement Code; Protest; Administrative Proceedings
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Vetoed) 2012-07-10 - (S) Vetoed on 07-10-12 - Returned from the Governor without approval (Gov. Msg. No. 1391). [HB1671 Detail]
Download: Hawaii-2012-HB1671-Amended.html
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HOUSE OF REPRESENTATIVES |
H.B. NO. |
1671 |
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TWENTY-SIXTH LEGISLATURE, 2012 |
H.D. 2 |
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STATE OF HAWAII |
S.D. 1 |
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A BILL FOR AN ACT
RELATING TO PROCUREMENT.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:
SECTION 1. Chapter 103D, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:
"§103D- Procurement statistics. The state procurement office shall keep statistics on solicitations and awards protested under section 103D-701 for the purpose of improving procurement procedures. The statistics shall include information on protests involving inadvertent errors and amounts forfeited from procurement protests."
SECTION 2. Section 103D-203, Hawaii Revised Statutes, is amended to read as follows:
"§103D-203 Chief procurement officers. (a) The chief procurement officer for each of the following state entities shall be:
(1) The judiciary--the administrative director of the courts;
(2) The senate--the president of the senate;
(3) The house of representatives--the speaker of the house of representatives;
(4) The office of Hawaiian affairs--the chairperson of the board;
(5) The University of Hawaii--the president of the University of Hawaii;
(6) The department of education, excluding the Hawaii public library system--the superintendent of education;
(7) The Hawaii health systems corporation--the chief executive officer of the Hawaii health systems corporation; and
(8) The remaining departments of the executive branch of the State and all governmental bodies administratively attached to them--the administrator of the state procurement office of the department of accounting and general services.
(b) The chief procurement officers for each of the several counties shall be:
(1) The executive branch--the respective finance directors of the several counties, except as provided in paragraphs (3), (4), and (5);
(2) The legislative branch--the respective chairpersons of the councils of the several counties;
(3) The Honolulu, Kauai, and Maui boards or departments of water supply--the managers and chief engineers of the respective boards or departments of water supply as designated by county charter;
(4) The Hawaii board of water supply--the manager of the board of water supply as designated by county charter; and
(5) The semi-autonomous public transit agency--the director of the agency as designated by county charter;
provided that the chief procurement officers designated under paragraphs (1), (2), (3), (4), and (5) shall not exercise their powers or duties over contracting in a manner contrary to the respective county's charter, ordinances, or rules adopted in accordance with chapter 91.
(c) As used in this chapter:
"Chief procurement officer" refers solely to the positions enumerated under subsections (a) and (b), as applicable.
"Procurement officer" refers to all positions that have authority for procurement.
[(c)] (d) For purposes of
applying this chapter to the judiciary, houses of the legislature, office of
Hawaiian affairs, University of Hawaii, department of education, remaining
departments of the executive branch and all governmental bodies
administratively attached to them, and the several counties, unless otherwise
expressly provided, "State" shall mean "judiciary", "state
senate", "state house of representatives", "office of
Hawaiian affairs", "University of Hawaii", "department of
education", "executive branch", "county", "board
of water supply" or "department of water supply", and
"semi-autonomous public transit agency", respectively."
SECTION 3. Section 103D-701, Hawaii Revised Statutes, is amended as follows:
1. By amending subsections (a), (b), and (c) to read:
"(a) Any actual or prospective bidder,
offeror, or contractor who is aggrieved in connection with the solicitation or
award of a contract may protest to the [chief] procurement officer [or
a designee] as specified in the solicitation. Except as provided in
sections 103D-303 and 103D-304, a protest shall be submitted in writing within
five working days after the aggrieved person knows or should have known of the
facts giving rise thereto; provided that a protest of an award or proposed
award shall in any event be submitted in writing within five working days after
the posting of award of the contract under section 103D-302 or 103D-303, if no
request for debriefing has been made, as applicable; provided further that no
protest based upon the content of the solicitation shall be considered unless
it is submitted in writing prior to the date set for the receipt of offers.
(b) The [chief] procurement officer [or
a designee], prior to the commencement of an administrative proceeding
under section 103D-709 or an action in court pursuant to section 103D-710, may
settle and resolve a protest concerning the solicitation or award of a
contract[.] within ten working days after receipt of the protest,
unless a longer period is determined necessary. This authority shall be
exercised in accordance with rules adopted by the policy board.
(c) If the protest is not resolved by mutual
agreement, the [chief] procurement officer [or a designee] shall [promptly]
issue a decision in writing to uphold or deny the protest[.] no later
than twenty working days after receipt of the protest, unless
a longer period is determined necessary. 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.
In addition, a record of the protest shall be compiled and include evidence received or considered, including oral testimony, exhibits, and a statement of the matters officially noticed, and proposed findings of fact, as applicable."
2. By amending subsection (f) to read:
"(f) In the event of a timely protest under
subsection (a), no further action shall be taken on the solicitation or the
award of the contract until the [chief] procurement officer makes a
written determination that the award of the contract without delay is necessary
to protect substantial interests of the State. A decision under this
subsection shall be final, conclusive, and not subject to appeal."
SECTION 4. Section 103D-709, Hawaii Revised Statutes, is amended to read as follows:
"§103D-709
Administrative proceedings for review. (a) The several hearings officers
appointed by the director of [the department of] commerce and consumer
affairs pursuant to section 26-9(f) shall have jurisdiction to [review]:
(1) Review and determine de novo, any
request from any bidder, offeror, contractor, or person aggrieved under
section 103D-106, or governmental body aggrieved by a determination of the [chief]
procurement officer[, head of a purchasing agency, or a designee of either
officer] under section 103D-310[, 103D-701,] or 103D-702[.];
and
(2) Review and determine, as provided in subsection (c), any protest submitted under section 103D-701 from any bidder, offeror, contractor, person, or governmental body aggrieved by a determination of the procurement officer.
(b) Hearings to
review and determine any request made pursuant to subsection [(a)] (a)(1)
shall [commence] be conducted as follows:
(1) Hearings shall commence within twenty-one calendar days of receipt of the request. The hearings officers shall have power to issue subpoenas, administer oaths, hear testimony, find facts, make conclusions of law, and issue a written decision which shall be final and conclusive unless a person or governmental body adversely affected by the decision commences an appeal in the circuit court of the circuit where the case or controversy arises under section 103D-710. Hearings officers shall issue written decisions no later than forty-five days from the receipt of the request under subsection (a)(1);
(2) The party initiating the proceeding shall have the burden of proof, including the burden of producing evidence and 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 (1) through (4) shall apply;
(3) The hearings officers shall ensure that a record is compiled of each proceeding which shall include the following:
(A) All pleadings, motions, and intermediate rulings;
(B) Evidence received or considered, including oral testimony, exhibits, and a statement of matters officially noticed;
(C) Offers of proof and rulings thereon;
(D) Proposed findings of fact; and
(E) A recording of the proceeding which may be transcribed if judicial review of the written decision is sought under section 103D-710; and
(4) The hearings officer shall decide whether the determinations of the procurement officer are in accordance with the state constitution, statutes, rules, and the terms and conditions of the solicitation or contract, and shall order such relief as may be appropriate in accordance with this chapter.
[(c) Only
parties to the protest made and decided pursuant to sections 103D-701,
103D-709(a), 103D-310(b), 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 argument on all issues involved. The rules of evidence shall
apply.
(d) The
hearings officers shall ensure that a record of each proceeding which includes
the following is compiled:
(1) All
pleadings, motions, intermediate rulings;
(2) Evidence
received or considered, including oral testimony, exhibits, and a statement of
matters officially noticed;
(3) Offers
of proof and rulings thereon;
(4) Proposed
findings of fact;
(5) A
recording of the proceeding which may be transcribed if judicial review of the
written decision is sought under section 103D-710.]
(c) Hearings to review and determine any request made pursuant to subsection (a)(2) shall be conducted as follows:
(1) Within ten calendar days of the filing of an application for review pursuant to subsection (a)(2), the procurement officer shall transmit the record of the protest proceedings under section 103D-701 to the office of administrative hearings of the department of commerce and consumer affairs;
(2) The review shall be scheduled as expeditiously as practicable and be conducted based upon the record of protest proceedings under section 103D-701, including the briefs, and oral argument. New evidence or new issues that were not raised in the proceedings before the procuring agency shall not be introduced, except that the hearings officer appointed to hear the case may admit new evidence if evidence offered is clearly newly discovered evidence and material to the decision on appeal;
(3) No later than thirty days from the filing of the application for administrative review, based upon review of the record, the appointed hearings officer:
(A) Shall affirm the decision of the purchasing agency;
(B) Remand the case with instructions for further proceedings; or
(C) Reverse the decision, if substantial rights may have been prejudiced because the findings, conclusions, decisions, or orders of the purchasing agency are found to be arbitrary, capricious, fraudulent, or clearly erroneous in view of the reliable, probative, and substantial evidence on the whole record; and
(4) If an application for review is not resolved by the thirtieth day from the filing of the application, the hearings officer shall lose jurisdiction and the decision of the purchasing agency shall not be disturbed.
(d) Any bidder, offeror, contractor, or person that is a party to a protest of a solicitation or award of a contract under section 103D-302 or 103D-303 that is decided pursuant to section 103D-701 may initiate a proceeding under subsection (c); provided that for contracts with an estimated value of:
(1) Less than $1,000,000, the protest shall concern a matter with estimated damage greater than $10,000; and
(2) $1,000,000 or more, the protest shall concern a matter with estimated damage that are equal to no less than ten per cent of the estimated value of the contract.
(e) The party initiating a proceeding under subsection (d) shall pay to the department of commerce and consumer affairs a cash or protest bond in the amount of:
(1) $1,000 for a contract with an estimated value of less than $500,000;
(2) $2,000 for a contract with an estimated value of at least $500,000, but less than $1,000,000; or
(3) One-half of one per cent of the estimated value of the contract or not more than $10,000, whichever is less, if the estimated value of the contract is $1,000,000 or more.
If the initiating party prevails in the proceeding initiated under subsection (d), the cash or protest bond shall be returned to that party. If the initiating party does not prevail in the proceeding initiated under subsection (d), the cash or protest bond shall be deposited into the general fund.
(f) Only parties to proceedings under sections 103D-310, 103D-701, 103D-702, and 103D-709 may initiate a proceeding under this section. All time limitations on actions, as provided for in section 103D-712, shall remain in effect.
[(e)] (g)
No action shall be taken on a solicitation or an award of a contract while a
proceeding is pending, if the procurement was previously stayed under section
103D-701(f).
[(f) The
hearings officer shall decide whether the determinations of the chief
procurement officer or the chief procurement officer's designee were in
accordance with the Constitution, statutes, rules, and the terms and conditions
of the solicitation or contract, and shall order such relief as may be
appropriate in accordance with this chapter.]
[(g)] (h)
The policy board shall adopt [such other] rules as may be necessary to
ensure that the proceedings conducted pursuant to this section afford all
parties an opportunity to be heard.
(i) As used in this section, "estimated value of the contract" or "estimated value", with respect to a contract, means either the amount of the lowest responsible and responsive bid under section 103D-302 or the bid amount of the responsible offeror whose proposal is determined in writing to be the most advantageous under section 103D-303, as applicable."
SECTION 5. Section 103D-710, Hawaii Revised Statutes, is amended as follows:
1. By amending subsection (c) to read:
"(c) Within
[twenty] ten calendar days of the filing of an application for
judicial review, the hearings officer shall transmit the record of the
administrative proceedings to the circuit court of the circuit where the case
or controversy arises."
2. By amending subsection (e) to read:
"(e) [Upon] No later than
thirty days from the filing of the application for judicial review, based upon
review of the record the circuit court may affirm the decision of the hearings
officer issued pursuant to section 103D-709 or remand the case with
instructions for further proceedings; or it may reverse or modify the decision
and order if substantial rights may have been prejudiced because the
administrative findings, conclusions, decisions, or orders are:
(1) In violation of constitutional or statutory provisions;
(2) In excess of the statutory authority or jurisdiction of the chief procurement officer or head of the purchasing agency;
(3) Made upon unlawful procedure;
(4) Affected by other error of law;
(5) Clearly erroneous in view of the reliable, probative, and substantial evidence on the whole record; or
(6) Arbitrary, or capricious, or characterized by
abuse of discretion or clearly unwarranted exercise of discretion[.];
provided that if an application for judicial review is not resolved on or before the thirtieth day from the filing of the application, the circuit court shall lose jurisdiction and the decision of the hearings officer shall not be disturbed. All time limitations on actions, as provided for in section 103D‑712, shall remain in effect."
SECTION 6. This Act does not affect rights and duties that matured, penalties that were incurred, and proceedings that were begun, before its effective date.
SECTION 7. Chapter 103D, Hawaii Revised Statutes, is amended by substituting the term "chief procurement officer" with the term "procurement officer" in each section of that chapter, except section 103D-203, Hawaii Revised Statutes.
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, 2050.
Report Title:
Procurement Code; Protest; Administrative Proceedings
Description:
Imposes time limits on rendering administrative and judicial review decisions. Limits protests to those that are a minimum percentage of the contract value. Requires posting of a protest bond, to be forfeited if the protesting party does not prevail. Clarifies use of the terms "chief procurement officer" and "procurement officer" in the procurement code. Effective July 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.
