THE SENATE

S.B. NO.

1068

TWENTY-NINTH LEGISLATURE, 2017

S.D. 1

STATE OF HAWAII

H.D. 1

 

 

 

 

 

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 bid challenges can hinder the delivery and award of public works construction projects resulting in a lapse in funding and other procurement issues.  Often there are communications from a bidder indicating flaws or technical discrepancies in a low bidder's proposal before a determination has been made that the low bidder is the responsible and responsive bidder.  Several recent informal inquiries and bid challenges related to subcontractor listing and licensing issues have caused major delays and cost increases for public works construction projects.

     The legislature further finds that due to the large number of licenses available, it has become increasingly difficult for general contractors to verify whether a subcontractor has the proper license to perform the type of work that the subcontractor has been contracted to perform.  Ensuring that subcontractors meet all of the necessary requirements to perform contracted work on state and county projects will address licensing concerns and greatly minimize bid challenges pertaining to the verification of subcontractor qualifications and licensing.

     The purpose of this Act is to:

     (1)  Prohibit the disqualification or rejection of a bid that includes a listed subcontractor whose license is not valid at the time of the bid due to a lapse in continuous insurance and bond coverage if certain conditions are met; and

     (2)  Require procurement officers to report any unlicensed activity to the contractors license board if a bid is disqualified or rejected because the subcontractor fails to meet certain licensing requirements.

     SECTION 2.  Section 103D-302, Hawaii Revised Statutes, is amended by amending subsection (g) to read as follows:

     "(g)  Correction or withdrawal of inadvertently erroneous bids before or after award, or cancellation of invitations for bids, awards, or contracts based on such bid mistakes, shall be permitted in accordance with rules adopted by the policy board.  After bid opening no changes in bid prices or other provisions of bids prejudicial to the interest of the public or to fair competition shall be permitted[.]; provided that:

     (1)  If a procurement officer determines that a listed subcontractor's license under chapter 444 is not valid at the time of the bid due to a lapse in continuous insurance and bond coverage under section 444-11.1, the bid may not be disqualified or rejected if:

         (A)  The subcontractor was previously licensed under chapter 444 within sixty days prior to the time of bid;

         (B)  Within ten days following the opening of bids, the subcontractor submits satisfactory proof of continuous insurance and bond coverages under section 444-11.1 to the contractors license board; and

         (C)  Within sixty days following the opening of bids, the subcontractor has its license under chapter 444 restored to a continuous current and active status from at least the time of bid to the time of award; and

     (2)  If a bid is disqualified or rejected because the subcontractor failed to meet the requirements of paragraph (1), the procurement officer shall report any unlicensed activity to the contractors license board.

Except as otherwise provided by rule, all decisions to permit the correction or withdrawal of bids, or to cancel awards or contracts based on bid mistakes, shall be supported by a written determination made by the chief procurement officer or head of a purchasing agency."

     SECTION 3.  Statutory material to be repealed is bracketed and stricken.  New statutory material is underscored.

     SECTION 4.  This Act shall take effect on July 1, 2050.


 


 

Report Title:

Procurement Officers; Competitive Sealed Bidding; Subcontractors; Licensing

 

Description:

Prohibits the disqualification or rejection of a bid that includes a listed subcontractor whose license is not valid at the time of the bid due to a lapse in continuous insurance and bond coverages if the subcontractor meets certain conditions.  Requires procurement officers to report any unlicensed activity if a bid is disqualified or rejected because the subcontractor fails to meet certain licensing requirements.  (SB1068 HD1)

 

 

 

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