Bill to Revamp State's Procurement Process Passes Legislature, Sent to Governor Ige for Signature

Bill requires State Procurement Office to implement and administer a past performance database

News Release from House Democratic Caucus, April 29, 2021

Honolulu, Hawai'i – Representative Scot Matayoshi's bill to strengthen the State's procurement process has passed both chambers of the Legislature and now moves to Governor Ige for his signature. House Bill 526 requires procurement officers to consider specific factors when making contract awards, including past performance, when available.

This bill additionally seeks to appropriate funds for the development and implementation of a past performance database and guide no later than December 31, 2023 for contractors who have worked with the State previously.

The database would include information pertaining to the contractor, the project they were involved in, the timeliness of completion, along with the positive or negative difference between the final cost of the project and its authorized budget. Lawmakers are hoping that the creation of a database helps address issues of repeated inefficiencies and substandard work.

"Contracts should be awarded to the best contractor, not the lowest bidder. This bill will reduce shoddy construction and costly repairs," said Matayoshi. "It’s time for our state to make smart contracting decisions instead of pinching pennies for low-quality work that costs taxpayers more in the long run."

Currently, some state contracts may be awarded to the lowest bidder without regard to that bidder's past performance. This bill attempts to promote additional insight to positively impact the award selection, enhance quality performance, and efficiently utilize taxpayer dollars.

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BILL TO INCREASE EFFICIENCY OF PROCUREMENT PROTESTS PASSES THROUGH THE LEGISLATURE

A measure to increase the efficiency of the State’s procurement process unanimously passed both chambers of the Hawaiʻi State Legislature today.

News Release from Senate Democratic Caucus, April 28, 2021

SB1329, which was introduced by Senator Donna Mercado Kim (Senate District 14 – Kapālama, ‘Ālewa, Kalihi Valley, Ft. Shafter, Moanalua Gardens & Valley, portions of Hālawa and ‘Aiea) requires that procurement protests be addressed expeditiously by establishing time limits to resolve certain procurement protests. The measure also amends the cash or protest bond amount for parties initiating administrative proceedings for review of certain protest decisions.

“Inefficiencies in our State’s procurement process causes project delays and increases the overall cost of state-awarded projects,” said Senator Kim. “It is important that the review process for protests is completed in a timely manner in order to reduce the cost burden for taxpayers.”

Senator Kim also believes that this measure is a step in the right direction in towards procurement reform in Hawaiʻi.

“For as long as I’ve been in elected office, complaints about the State’s procurement process has always been an issue,” noted Senator Kim. “The State Procurement Office is the only agency that doesn’t have a deadline to review bid protests. In an effort to expedite the review process, this bill establishes time limits to resolve the protests of awarded projects that are not resolved by mutual agreement.”

The bill now heads to the Governor’s desk for consideration. He has until June 21, 2021 to notify the Legislature of the bills he intends to veto. The Governor must either sign or veto bills by July 6, 2021. If no action is taken, the bill becomes law without his signature.