Report Title:
Procurement; Bid Security
Description:
Amends code to raise the limit on bonds required for procurement bidding process.
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HOUSE OF REPRESENTATIVES |
H.B. NO. |
2146 |
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TWENTY-FIRST LEGISLATURE, 2002 |
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STATE OF HAWAII |
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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. The existing requirements for bonds to provide bid security are a major burden to small businesses in the state, often preventing these businesses from being able to successfully bid on projects because they are unable to meet the bonding requirements. The purpose of this Act is to raise the limit of purchases requiring bond security in order to enable these small businesses to reasonably compete in the bidding process.
SECTION 2. All contracts entered into, or commencement of any established procedure prior to entering into a contract, including bid solicitation, under statutes or portions of statutes affected by this Act, shall continue to be honored until their termination. The provisions of this Act shall not be applied so as to impair any contract existing as of the effective date of this Act or to otherwise violate the provisions of either the Hawaii Constitution or the United States Constitution.
SECTION 3. Section 103D-323, Hawaii Revised Statutes, is amended by amending subsection (a) to read as follows:
"§103D-323 Bid security. (a) Unless the policy board determines otherwise by rules, bid security shall be required only for construction contracts to be awarded pursuant to sections 103D-302 and 103D-303 and when the price of the contract is estimated by the procurement officer to exceed [$25,000] $100,000 or, if the contract is for goods or services, the purchasing agency secures the approval of the chief procurement officer. Bid security shall be a bond provided by a surety company authorized to do business in the State, or the equivalent in cash, or otherwise supplied in a form specified in rules."
SECTION 4. Section 103D-324, Hawaii Revised Statutes, is amended by amending subsection (a) to read as follows:
"§103D-324 Contract performance and payment bonds. (a) Unless the policy board determines otherwise by rules, the following bonds or security shall be delivered to the purchasing agency and shall become binding on the parties upon the execution of the contract if the contract which is awarded exceeds [$25,000] $100,000 and is for construction, or the purchasing agency secures the approval of the chief procurement officer:
(1) A performance bond in a form prescribed by the rules of the policy board, executed by a surety company authorized to do business in this State or otherwise secured in a manner satisfactory to the purchasing agency, in an amount equal to one hundred per cent of the price specified in the contract;
(2) A payment bond in a form prescribed by the rules of the policy board, executed by a surety company authorized to do business in this State or otherwise secured in a manner satisfactory to the purchasing agency, for the protection of all persons supplying labor and material to the contractor for the performance of the work provided for in the contract. The bond shall be in an amount equal to one hundred per cent of the price specified in the contract; or
(3) A performance and payment bond which satisfies all of the requirements of paragraphs (1) and (2).
SECTION 5. If any provision of this Act, or the application thereof to any person or circumstance is held invalid, the invalidity does not affect other provisions or applications of the Act, which can be given effect without the invalid provision or application, and to this end the provisions of this Act are severable.
SECTION 6. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.
SECTION 7. This Act shall take effect upon its approval.
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INTRODUCED BY: |
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