THE SENATE	S.B. NO.	1069
TWENTY-NINTH LEGISLATURE, 2017		S.D. 1
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 delivery and award of public works construction projects can be hindered by bid challenges resulting in a lapse of funding and other procurement issues.  The legislature further finds that the execution and completion of public works projects are often delayed due to bid protests by non-lowest bidders challenging technical mistakes in the lowest bidder's proposal.  As a result of bid protests, projects are delayed, funding lapses, and contracts are awarded to non-low bidders, all of which increase final project costs.

     Specifically, section 103D-302, Hawaii Revised Statutes, requires that all subcontractors or joint contractors to be used on a public works project be listed, along with their scope of work on the bid proposal submitted to any state or county agency subject to the procurement code.  The legislature finds that many recent bid protests have been based solely on subcontractor listing and licensing issues, including where a bidder has failed to list a required subcontractor or that the listed subcontractor did not possess the appropriate license and was not qualified to perform the work.

     The legislature further finds that time constraints between the time a bidder receives all subcontractor bids and the bid submission deadline can cause inadvertent failure to list a required subcontractor or the listing of an improperly licensed subcontractor in a bid, resulting in a bid protest.  Often, inadvertent errors occur due to the complexity of the laws regarding contractor licenses under chapter 444, Hawaii Revised Statutes; title 16, Hawaii Administrative Rules; and judicial, quasi-judicial, and agency interpretations of these laws and rules.  The contractors license board currently recognizes over one hundred different specialty contractor licenses that a prime bidder must sort through to determine the appropriate subcontractor specialty to be listed on a bid.

     In comparison, the federal government does not require the listing of subcontractors on any bid proposal.  Furthermore, the 2000 American Bar Association's Model Procurement Code, the model for Hawaii's Public Procurement Code, does not include such a subcontractor listing requirement.  In fact, the federal government and twenty states do not require a general contractor's license to bid on or perform construction work.

     The purpose of this Act is to require the listing of joint contractors and subcontractors for construction contracts with a total value of $           or more; provided that a construction bid that does not comply with this requirement may be accepted if it is in the best interest of the State and the value of the work to be performed by a subcontractor is equal to or less than       per cent of the total bid amount.  This Act will reduce the number of subcontractors that must be listed in a bid proposal, thereby reducing the number of opportunities to challenge bids on the basis of subcontractor listing errors.  This Act will not in any way change the statutory requirement to use licensed subcontractors under chapter 444, Hawaii Revised Statutes.

     SECTION 2.  Section 103D-302, Hawaii Revised Statutes, is amended by amending subsection (b) to read as follows:

     "(b)  An invitation for bids shall be issued, and shall include a purchase description and all contractual terms and conditions applicable to the procurement.  If the invitation for bids is for construction[,] with a total estimated contract value of $           or more, it shall specify that all bids include the name of each person or firm to be engaged by the bidder as a joint contractor or subcontractor in the performance of the contract and the nature and scope of the work to be performed by each.  Construction bids that do not comply with this requirement may be accepted if acceptance is in the best interest of the State and the value of the work to be performed by the joint contractor or subcontractor is equal to or less than [one]       per cent of the total bid amount."

     SECTION 3.  Statutory material to be repealed is bracketed and stricken.  New statutory material is underscored.

     SECTION 4.  This Act shall take effect on July 1, 2050.

 

 

 

Report Title:

Procurement; Subcontractor Listing

 

Description:

Requires public procurement construction bids to list subcontractors and joint contractors only for contracts of an unspecified dollar amount or more; provided that bids lacking this list may be accepted if in the State's best interest and subcontractor and joint contractor work is an unspecified per cent or less of the total bid amount.  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.