SB2570

SECTION 1. The legislature finds that the process for protesting a procurement solicitation, award, or proposed award is confusing and raises questions regarding the fairness of the process. Consequently, agencies have taken inconsistent positions with respect to when a bidder is aggrieved.

The purpose of this Act is to clearly define when a protest is required to be submitted. If a protest is based on the contents of the solicitation, a protest is required at least one day prior to the date set for the receipt of offers. In all other cases, a protest is due within seven calendar days after official action is taken, such as when an award is made. It is not the legislature's intent to dissuade bidders from raising objections with other bids prior to award. It is the legislature's intent to encourage the agency to engage with bidders throughout the entire procurement process.

SECTION 2. Section 103D-701, Hawaii Revised Statutes, is amended to read as follows:

"§103D-701 Authority to resolve protested solicitations and awards. (a) 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] seven calendar 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 one day 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, shall use their best efforts to resolve concerns raised by the protesting party through open and frank discussion and may settle and resolve a protest concerning the solicitation or award of a contract. This authority shall be exercised in accordance with rules adopted by the policy board.

(c) The chief procurement officer or a designee shall resolve any protest as expeditiously as possible. If the protest is not resolved by mutual agreement, the chief procurement officer or a designee shall issue a written decision to uphold or deny the protest. 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.

If the protest of a construction contract or airport contract that is awarded pursuant to section 103D-302 or 103D-303 is not resolved by mutual agreement, the chief procurement officer or a designee shall issue a written decision to uphold or deny the protest within seventy-five calendar days of receipt of the protest; provided that the chief procurement officer or a designee may grant an extension based on written justification of the extenuating circumstances; provided further that the extension shall not exceed forty-five calendar days.

(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) For the purposes of this section, a party is not aggrieved until official action, adverse to it, has been taken."

SECTION 3. Section 103D-709, Hawaii Revised Statutes, is amended by amending subsection (d) to read as follows:

"(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 this section[~~; provided that;~~] if any of the following conditions are met:

(1) For contracts with an estimated value of less than $1,000,000, the protest concerns a matter that is greater than $10,000; or

(2) For contracts with an estimated value of $1,000,000 or more, the protest concerns a matter that is equal to no less than [~~ten~~] five per cent of the estimated value of the contract."

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 upon its approval.

INTRODUCED BY:	_____________________________

THE SENATE	S.B. NO.	2570
THIRTY-SECOND LEGISLATURE, 2024
STATE OF HAWAII