STAND. COM. REP. NO. 1355

Honolulu, Hawaii

RE: H.B. No. 1184

H.D. 1

S.D. 1

Honorable Ronald D. Kouchi

President of the Senate

Thirty-Second State Legislature

Regular Session of 2023

State of Hawaii

Sir:

Your Committee on Government Operations, to which was referred H.B. No. 1184, H.D. 1, entitled:

"A BILL FOR AN ACT RELATING TO PROCUREMENT,"

begs leave to report as follows:

The purpose and intent of this measure is to provide a process by which agencies may procure professional services when fewer than three qualified persons respond to an additional solicitation.

Your Committee received testimony in support of this measure from the Department of Accounting and General Services, University of Hawai‘i System, Office of the Mayor of Maui County, and Department of Budget and Fiscal Services of the City and County of Honolulu. Your Committee received testimony in opposition to this measure from one individual. Your Committee received comments on this measure from the State Procurement Office, Department of Finance of the County of Kauai, American Institute of Architects Hawaii State Council, and American Council of Engineering Companies of Hawaii.

Your Committee finds that state agencies may procure professional services for certain projects that require additional expertise. However, for certain state and county agencies, especially agencies located on the neighbor islands, there is a lack of accessibility to readily available and qualified vendors or professional services to ensure projects continue in a timely manner. This measure eases the procurement process for certain solicitations to ensure the continuation of projects vital to state functions.

Your Committee notes that the companion to this measure, S.B. No. 1465, S.D. 2 (Regular Session of 2023), which was previously passed by the Senate, is a substantially similar measure that also authorizes agencies to rank fewer than three individuals for professional services when fewer than three qualified persons respond to the solicitation or request to use alternative procurement procedures when no qualified person responds to the solicitation. Your Committee concludes that the language in S.B. No. 1465, S.D. 2, is preferable because it:

(1) Reflects the consensus language of stakeholders that best represents the agreement reached through their discussions thus far;

(2) Provides additional parameters for purchasing agencies to fulfill in the event of a bid receiving fewer than three qualified persons; and

(3) Ensures the structural and procedural adherence consistent with existing procurement law while also authorizing state and county agencies to seek repetitive and alternative means to award critical professional service contracts to entities who have been deemed qualified to provide vital services.

Accordingly, your Committee has amended this measure by deleting its contents and inserting the contents of S.B. No. 1465, S.D. 2, a substantially similar measure, which authorizes agencies, upon approval by the Chief Procurement Officer, to rank fewer than three persons for the procurement of professional services, and:

(1) In the event two qualified persons respond to the solicitation, authorizes the agencies to rank the respondents using specified criteria;

(2) In the event one qualified person responds to the solicitation, authorizes the agencies to evaluate the person's qualifications and provide the name of the person to the head of the purchasing agency to negotiate a contract at a fair and reasonable price;

(3) In the event no qualified person responds to the solicitation, specifies alternative procurement procedures to select a qualified person; and

(4) Inserts an effective date of July 1, 2112.

As affirmed by the record of votes of the members of your Committee on Government Operations that is attached to this report, your Committee is in accord with the intent and purpose of H.B. No. 1184, H.D. 1, as amended herein, and recommends that it pass Second Reading in the form attached hereto as H.B. No. 1184, H.D. 1, S.D. 1, and be referred to your Committee on Ways and Means.

Respectfully submitted on behalf of the members of the Committee on Government Operations,

________________________________

ANGUS L.K. MCKELVEY, Chair