STAND. COM. REP. NO. 2495

Honolulu, Hawaii

RE: S.B. No. 2827

Honorable Ronald D. Kouchi

President of the Senate

Thirty-Second State Legislature

Regular Session of 2024

State of Hawaii

Sir:

Your Committee on Government Operations, to which was referred S.B. No. 2827 entitled:

"A BILL FOR AN ACT RELATING TO PROCUREMENT,"

begs leave to report as follows:

The purpose and intent of this measure is to require cash or protest bonds paid or filed by parties initiating an administrative appeal for protests of solicitations or award of contracts under the Hawaii Public Procurement Code to be returned to the initiating parties, minus administrative costs as determined by the Office of Administrative Hearings of the Department of Commerce and Consumer Affairs, except in cases where the initiating party does not prevail in the administrating hearing or the appeal was frivolous or made in bad faith.

Your Committee received testimony in support of this measure from the Subcontractors Association of Hawaii; Ralph S. Inouye Co., Ltd.; General Contractors Association of Hawaii; King & Neel Pacific, Inc.; Jas. W. Glover, Ltd.; and Healy Tibbitts Builders, Inc.

Your Committee finds that Hawaii is the only state that does not return cash or protest bond that is required to be paid or filed by an initiating party when the party prevails on its protest. This measure ensures a deterrence of frivolous appeals without deterring legitimate appeals, and additionally addresses administrative cost recovery.

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 S.B. No. 2827 and recommends that it pass Second Reading and be referred to your Committee on Commerce and Consumer Protection.

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

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ANGUS L.K. MCKELVEY, Chair