Report Title:

Procurement; Indemnification; Construction Professional

Description:

Amends public procurement code to prohibit a governmental body from requiring a contractor for construction design service to indemnify the governmental body for the governmental body's negligence, but allows the governmental body to require the contractor to indemnify the State for the contractor's negligence. (SD1)

THE SENATE

S.B. NO.

1843

TWENTY-THIRD LEGISLATURE, 2005

S.D. 1

STATE OF HAWAII

 


 

A BILL FOR AN ACT

 

relating to procurement.

 

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

SECTION 1. The legislature finds that design professional service contracts combine two features that make them unique among public contracts. These services are used by governmental bodies to construct public works that endure and are used by the public for a significant period of time beyond the life of these contracts. It is not uncommon for public works to survive their designers.

The legislature recognizes that design professionals have an extended period of personal liability that cannot be avoided by ways and means often used by other public contractors. The period of personal professional liability with respect to public works is extended by the sovereign right of the State to be free of any statute of repose.

Hawaii's procurement law requires these contracts to be negotiated at "fair and reasonable prices". To bring fairness and reasonableness to the long-term relationship between government and those public contractors whose personal liability is concurrent with the life span of public works, the legislature declares that it is public policy for a governmental body to defend both parties against any claims, with the extent of liability to be determined after settlement of the claim.

SECTION 2. Chapter 103D, Hawaii Revised Statutes, is amended by adding a new section to part VII to be appropriately designated and to read as follows:

"§103D- Indemnification. (a) A contract for construction design professional services between a governmental body and a person or entity licensed under chapter 464:

(1) Shall not require the person or entity to defend, indemnify, or hold harmless the governmental body, its employees, officers, or agents, from any liability, damage, or loss caused by, or any claim, action, or proceeding arising from, the negligence, errors, omissions, recklessness, or intentional misconduct of the governmental body, its employees, officers, or agents; and

(2) May require the person or entity to indemnify and hold harmless the governmental body, its employees, officers, and agents from any liability, damages, or losses, including without limitation reasonable attorneys' fees, or claims, actions, or proceedings, arising from the negligence, errors, or omissions of the person or entity, or the person's or entity's employees, officers, or agents in the performance of their professional services.

(b) Any provision of a contract entered into between a governmental body and a person or entity in violation of this section is declared to be contrary to the public policy of the State and is void.

(c) For purposes of this section, "entity" shall have the same meaning as set forth in section 343D-2."

SECTION 3. New statutory material is underscored.

SECTION 4. This Act shall take effect upon its approval.