Bill Text: HI SB2457 | 2012 | Regular Session | Amended
Bill Title: Procurement; Protest; Administrative Proceedings; Small Purchases; Electronic Procurement
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Engrossed - Dead) 2012-04-18 - (S) Received notice of appointment of House conferees (Hse. Com. No. 619). [SB2457 Detail]
Download: Hawaii-2012-SB2457-Amended.html
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THE SENATE |
S.B. NO. |
2457 |
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TWENTY-SIXTH LEGISLATURE, 2012 |
S.D. 2 |
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STATE OF HAWAII |
H.D. 2 |
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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. Chapter 103D, Hawaii Revised Statutes, is amended by adding a new section to part III to be appropriately designated and to read as follows:
"§103D-A Temporary exemption of certain construction and design-build procurements from protest and administrative review of nonresponsible offeror determination. (a) The governor or the mayor of a county, as applicable, may exempt a procurement for a construction or design-build contract under the governor's or mayor's jurisdiction from protest under section 103D-701 and administrative review of a nonresponsible offeror determination under section 103D-709 if the following conditions are met:
(1) The invitation for bids or request for proposals is issued by the head of the purchasing agency between July 1, 2012, and June 30, 2014;
(2) The governor or mayor requires all bidders or offerors, as a condition for submitting bids or proposals, to agree that all bids or offers, including amendments or revisions, but not trade secrets or other proprietary data designated by the bidders or offerors, shall be released for public inspection upon award of the contract; provided that:
(A) A bidder or offeror who does not agree to the requirements of this paragraph shall be deemed nonresponsible for the procurement; and
(B) After award of the contract, information designated as trade secrets or other proprietary data may be disclosed if required by the attorney general or county corporation counsel, as applicable, in accordance with rules of the state procurement office; and
(3) The governor or mayor agrees to release for public inspection, upon award of the contract, all written evaluations and ratings of bids or offerors by the purchasing agency or evaluation committee for the procurement, if any.
The governor or mayor shall establish that a procurement is exempt from protest and administrative review of a nonresponsible offeror determination by issuing a proclamation simultaneously with the issuance of the invitation for bids or request for proposals for the procurement. The proclamation shall be a public record.
(b) Simultaneously with the award of a contract for an exempt procurement, the governor or mayor, as applicable, shall release for public inspection the information specified under subsection (a)(2) and (3).
(c) The governor or mayor, as applicable, shall post on the state or appropriate county website, as applicable, a list of all price adjustments and change orders approved for a contract, for an exempt procurement. The list of price adjustments and change orders shall be posted on the state or county website within ten days of the end of the quarter in which the price adjustment or change order is made.
(d) For the purpose of this section, "nonresponsible offeror determination" means a determination of nonresponsibility of a prospective offeror under section 103D-310(b)."
SECTION 3. Section 103D-105, Hawaii Revised Statutes, is amended to read as follows:
"§103D-105 Public access to
procurement information. Government records relating to procurement shall
be available to the public as provided in chapter 92F[.] and, if applicable,
section 103D-A. Part I of chapter 92 shall not apply to discussions,
deliberations, or decisions required to be conducted or made confidentially
under this chapter[.]; provided that if the governor or the mayor of
a county exempts a procurement pursuant to section 103D-A, this confidentiality
provision shall not be applied to make confidential any information required to
be made public under section 103D-A."
SECTION 4. Section 103D-303, Hawaii Revised Statutes, is amended by amending subsection (h) to read as follows:
"(h) In cases of awards made under this
section, non-selected offerors may submit a written request for debriefing to
the procurement officer within three working days after the posting of the
award of the contract. Thereafter, the procurement officer shall provide the
non-selected offeror a prompt debriefing. Any protest by the non-selected
offeror pursuant to section 103D-701 following debriefing shall be filed in
writing with the procurement officer within five working days after the date
upon which the debriefing is completed[.]; provided that the protest
provision shall not apply to a procurement exempt from protest under section
103D-A."
SECTION 5. Section 103D-701, Hawaii Revised Statutes, is amended to read as follows:
"§103D-701 Authority to resolve
protested solicitations and awards. (a) [Any] Except as
provided in subsection (h), 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 business days after receipt of the protest, unless extended for
reasonable cause by the chief procurement officer. 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 business days after receipt of the protest, unless extended for
reasonable cause by the chief procurement officer. 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 shall include evidence received or considered, including oral testimony, exhibits, and a statement of the matters officially noticed, and proposed findings of fact.
(d) A copy of the decision under subsection (c) shall be mailed or otherwise furnished immediately to the protestor and any other party intervening.
(e) A decision under subsection (c) shall be final and conclusive, unless any person adversely affected by the decision commences an administrative proceeding under section 103D-709.
(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.
(g) In addition to any other relief, when a protest is sustained and the protestor should have been awarded the contract under the solicitation but is not, then the protestor shall be entitled to the actual costs reasonably incurred in connection with the solicitation, including bid or proposal preparation costs but not attorney's fees.
(h) This section shall not apply to a procurement for a construction or design-build contract that is exempt from protest under section 103D-A."
SECTION 6. 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[.], except
that a determination of nonresponsibility of a prospective offeror under
section 103D-310(b) shall not be subject to review under this section if the
procurement is exempt from review pursuant to section 103D-A; 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 chief procurement officer, head of a purchasing agency, or a designee of either 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 not 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 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 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 that 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 that may be transcribed if judicial review of the written decision is sought under section 103D-710; and
(4) The hearings officers shall decide whether the determinations of the chief procurement officer or the chief procurement officer's designee 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 chief procurement officer, head of a purchasing agency, or a designee of either 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; and
(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 shall:
(A) 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;
provided that 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:
(1) For contracts with an estimated value of less than $1,000,000, the protest shall concern a matter with estimated damages greater than $10,000; and
(2) For contracts with an estimated value of $1,000,000 or more, the protest shall concern a matter with estimated damages 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, for the contract with an estimated value of $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, and 103D-702 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 7. 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 8. Act 175, Session Laws of Hawaii 2009, section 14, as amended by section 1 of Act 107, Session Laws of Hawaii 2010, is amended to read as follows:
"SECTION 14. This Act shall take effect on July 1, 2009; provided that:
(1) [Part
I] Section 1 shall be repealed on July 1,
2012, and [sections] section 103D-102 [and 103D-305], Hawaii Revised Statutes, shall be reenacted in the form in which
[they] it read on the day before the
effective date of this Act[; and
(2) Sections 7, 9, and 10 of this Act shall
be repealed on July 1, 2011, and sections 103D-709, 103D-710(c), and
103D-710(e), Hawaii Revised Statutes, shall be reenacted in the form in which
they read on the day before the effective date of this Act]."
SECTION 9. This Act does not affect rights and duties that matured, penalties that were incurred, and proceedings that were begun, before its effective date.
SECTION 10. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.
SECTION 11. This Act shall take effect on June 30, 2012; provided that on June 30, 2014, sections 1 through 7 of this Act shall be repealed and sections 103D-105, 103D-303(h), 103D-701, 103D-709, and 103D-710(c) and (e), Hawaii Revised Statutes, shall be reenacted in the form in which they read on the day before the effective date of this Act.
Report Title:
Procurement; Protest; Administrative Proceedings; Small Purchases; Electronic Procurement
Description:
Imposes time limits on administrative and judicial review decisions. Limits protests to those that are a minimum percentage of the contract value. Temporarily authorizes the governor or a county mayor to exempt a procurement from protest. Makes permanent the amendments made to section 103D-305, Hawaii Revised Statutes that increase the limits on procurements qualifying for certain small purchase procedures. Effective June 30, 2012. (SB2457 HD2)
The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.
