STAND. COM. REP. NO.2991

Honolulu, Hawaii

, 2002

RE: H.B. No. 2525

H.D. 1

S.D. 1

 

 

Honorable Robert Bunda

President of the Senate

Twenty-First State Legislature

Regular Session of 2002

State of Hawaii

Sir:

Your Committees on Labor and Transportation, Military Affairs and Government Operations and Tourism and Intergovernmental Affairs, to which was referred H.B. No. 2525, H.D. 1, entitled:

"A BILL FOR AN ACT RELATING TO PUBLIC WORKS PROJECTS,"

beg leave to report as follows:

The purpose of this measure is to ensure that when contractors bid on public works construction projects, it is done pursuant to standards that are fair, equitable, and uniformly applied.

The Department of Labor and Industrial Relations (DLIR), the Hawaii Construction Industry Association, and the International Brotherhood of Electrical Workers, Local Union 1186 testified in support of the measure. Abhe and Svoboda, Inc., Associated Builders and Contractors, Inc., Hawaii Chapter, and two attorneys testified in opposition to the measure.

Specifically, the measure promotes a fair public works bidding process by:

(1) Clarifying that the provisions of Chapter 104, Hawaii Revised Statutes (HRS), apply to every public works contract in excess of $2,000 regardless of whether prevailing wage, overtime, and other requirements are stated in a contract or specifications;

(2) Declaring that omission of these provisions shall not be used as a defense by a contractor who is not in compliance with the requirements of Chapter 104, HRS; and

(3) Authorizing the disclosure of the terms of a collective bargaining agreement to a federal or state agency authorized to enforce the provisions of Chapter 104, HRS.

Your Committees find that the purpose of Chapter 104, HRS, is to ensure a level playing field for contractors who bid on public works construction projects. Chapter 104, HRS, requires that prevailing wage, overtime, recordkeeping, and other provisions are inserted in every State and county public works contract over $2,000.

However, problems have arisen when some State and county agencies have inadvertently omitted the specific provisions that require contractors to comply with Chapter 104, HRS, from their contracts and specifications. When these contractors are cited for violations, they assert that Chapter 104, HRS, does not apply to them because the specific provisions were not included in the contract.

Your Committees find that this situation has created enforcement problems for DLIR because DLIR does not have control over what is contained in every State and county construction contract. This erodes the level playing field for contract bidders since contractors who do not pay prevailing wages can underbid contractors who base their bids upon prevailing wages.

Your Committees have amended the measure by:

(1) Requiring that prior to the execution of any contract subject to Chapter 104, HRS, the governmental contracting agency shall require of and receive from each bidder, a signed affidavit attesting to the bidder's acknowledgment of and intent to comply with Chapter 104; and

(2) Making technical, nonsubstantive amendments for purposes of clarity and style.

As affirmed by the records of votes of the members of your Committees on Labor and Transportation, Military Affairs and Government Operations and Tourism and Intergovernmental Affairs that are attached to this report, your Committees are in accord with the intent and purpose of H.B. No. 2525, H.D. 1, as amended herein, and recommend that it pass Second Reading in the form attached hereto as H.B. No. 2525, H.D. 1, S.D. 1, and be referred to the Committee on Ways and Means.

Respectfully submitted on behalf of the members of the Committees on Labor and Transportation, Military Affairs and Government Operations and Tourism and Intergovernmental Affairs,

____________________________

CAL KAWAMOTO, Chair

____________________________

BOB NAKATA, Chair

____________________________

DONNA MERCADO KIM, Chair