STAND. COM. REP. NO. 3336

                                   Honolulu, Hawaii
                                                     , 2000

                                   RE:  H.B. No. 2878
                                        H.D. 2
                                        S.D. 2




Honorable Norman Mizuguchi
President of the Senate
Twentieth State Legislature
Regular Session of 2000
State of Hawaii

Sir:

     Your Committee on Ways and Means, to which was referred H.B.
No. 2878, H.D. 2, S.D. 1, entitled:

     "A BILL FOR AN ACT RELATING TO PUBLIC CONTRACTS AND
     PROCUREMENT,"

begs leave to report as follows:

     The purpose of this bill is to prevent state procurement
officers from requiring contractors to begin performance before
the Department of Budget and Finance has approved the
expenditure.

     Your Committee finds that some state procurement officers
have required contractors to begin performance before the
contract has been approved by the Department of Budget and
Finance. This requires the contractors to commit significant
resources in advance of approval and to have to finance these
costs for a significant period before receiving payment.  Such a
practice imposes an unfair hardship on the contractor and its
subcontractors.

     Your Committee has amended this bill by deleting the
specific sections relating to requiring a notarized affidavit
from the procurement officer and penalties for the lack thereof,
and providing instead that a contractor shall not begin work
without a written contract.

 
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                                   STAND. COM. REP. NO. 3336
                                   Page 2


     As affirmed by the record of votes of the members of your
Committee on Ways and Means that is attached to this report, your
Committee is in accord with the intent and purpose of H.B. No.
2878, H.D. 2, S.D. 1, as amended herein, and recommends that it
pass Third Reading in the form attached hereto as H.B. No. 2878,
H.D. 2, S.D. 2.

                                 Respectfully submitted on behalf
                                 of the members of the Committee
                                 on Ways and Means,



                                 ________________________________
                                 CAROL FUKUNAGA, Co-Chair



                                 ________________________________
                                 ANDREW LEVIN, Co-Chair

 
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