THE SENATE

S.B. NO.

2202

THIRTY-SECOND LEGISLATURE, 2024

S.D. 1

STATE OF HAWAII

 

 

 

 

 

 

A BILL FOR AN ACT

 

 

RELATING TO SMALL PURCHASES.

 

 

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

 

     SECTION 1.  The legislature finds that escalating costs of goods over the years, particularly during the coronavirus disease 2019 pandemic, have created numerous difficulties regarding small purchase procurement.  With the tragic August 2023 wildfires in Maui and the growing frequency of earthquakes on Hawaii island, an indicator of potential devastating volcanic eruption effects on residential and commercial areas, as seen in 2018, the need to address small purchase procurements has become inescapable.

     Accordingly, the purpose of this Act is to:

     (1)  Increase the minimum amount for purchases constituting small purchase procurements from $25,000 to $50,000;

     (2)  Set the minimum amount for purchases constituting small purchase procurements within the affected area of a federally declared disaster at $75,000; and

     (3)  Require the state procurement office to submit a report to the legislature on the efficacy of the increased procurement amounts for areas affected by a federally declared disaster.

     SECTION 2.  Section 103D-305, Hawaii Revised Statutes, is amended to read as follows:

     "§103D-305  Small purchases; prohibition against parceling.  (a)  Procurements of less than $100,000 for goods or services, or $250,000 for construction shall be made in accordance with procedures set forth in rules adopted by the policy board that are designed to ensure administrative simplicity and as much competition as is practicable; provided that multiple expenditures shall not be created at the inception of a transaction or project so as to evade the requirements of this chapter; and provided further that procurement requirements shall not be artificially divided or parceled so as to constitute a small purchase under this section.

     (b)  Procurements greater than $50,000 for construction under subsection (a) shall require security by performance and payment bonds, pursuant to section 103D-324, delivered to the procurement officer, that are:

     (1)  In a form prescribed by the rules of the policy board;

     (2)  Executed by a surety company authorized to do business in this State; and

     (3)  In an amount equal to one hundred per cent of the price specified in the contract,

or shall otherwise be secured by a performance bond in a manner satisfactory to the procurement officer.

     (c)  [Procurements] Except as provided in subsection (d), procurements of [$25,000] $50,000 to less than $250,000 shall be made in accordance with small purchase procedures; provided that [such] small purchase procurements through an electronic system shall be required.

     (d)  In an affected area of a federally declared disaster, procurements of $75,000 to less than $250,000 shall be made in accordance with small purchase procedures; provided that small purchase procurements through an electronic system shall be required; provided further that procurements pursuant to this subsection shall be reported to the state procurement office."

     SECTION 3.  The state procurement office shall submit a report of its findings and recommendations on the efficacy of the amendment to section 103D-305, Hawaii Revised Statutes, made by section 1 of this Act, including any proposed legislation, to the legislature no later than twenty days prior to the convening of the regular session of 2025.

     SECTION 4.  This Act does not affect rights and duties that matured, penalties that were incurred, and proceedings that were begun before its effective date.

     SECTION 5.  Statutory material to be repealed is bracketed and stricken.  New statutory material is underscored.

     SECTION 6.  This Act shall take effect on January 1, 2112.

 

 

 

 

Report Title:

SPO; Hawaii Council of Mayors Package; Small Purchase Procurements; Federally Declared Disaster Areas; Report

 

Description:

Increases the minimum amount for purchases constituting small purchase procurements from $25,000 to $50,000.  Sets a small purchase procurement minimum amount of $75,000 for federally declared disaster areas; provided that such procurements are reported to the State Procurement Office.  Requires a report to the Legislature.  Takes effect 1/1/2112.  (SD1)

 

 

 

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