REPORT TITLE:
Procurement; Sole Source


DESCRIPTION:
Amends the Hawaii public procurement code to allow community-
based nonprofit organizations to bid on and receive sole source
contracts from state and county agencies, where the service
needed in a particular community can be provided by only one,
qualified community-based nonprofit organization.

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                        
THE SENATE                              S.B. NO.           2526
TWENTIETH LEGISLATURE, 2000                                
STATE OF HAWAII                                            
                                                             
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                   A  BILL  FOR  AN  ACT

RELATING TO PROCUREMENT.



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

 1      SECTION 1.  The legislature finds that there is a need to
 
 2 amend the public procurement code to ensure that communities that
 
 3 are in need of certain services are able to obtain those services
 
 4 without undue delay when only one qualified community-based
 
 5 nonprofit organization can provide that service.
 
 6      In enacting the public procurement code, the legislature
 
 7 sought to ensure the fair and equitable treatment of all persons
 
 8 who deal with the procurement system of the State and counties.
 
 9 Since public employment is a public trust, public employees must
 
10 discharge their duties impartially to assure fair competitive
 
11 access to governmental procurement by responsible contractors,
 
12 and must conduct themselves in a manner that fosters public
 
13 confidence in the integrity of the State procurement process.
 
14 Sole source contracts are generally discouraged as an example of
 
15 granting unwarranted privileges, exemptions, advantages, or
 
16 favoritism to a prospective bidder or contractor.
 
17      However, the legislature finds that this general rule
 
18 against the granting of sole source contracts does not apply
 
19 where there is only one qualified service provider.  The general
 

 
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 1 rule justifying the need for open bidding, that the process will
 
 2 be abused if sole source contracts are permitted unchecked, does
 
 3 not exist where a service needed in a particular community can
 
 4 only be provided by one qualified community-based nonprofit
 
 5 organization in that community.  Allowing sole source contracts
 
 6 for this limited purpose serves to streamline the procurement
 
 7 process and remove unnecessary hurdles to the delivery of
 
 8 government services.
 
 9      Accordingly, the purpose of this Act is to amend the public
 
10 procurement code to specifically allow sole source procurement
 
11 where the service needed in a particular community can be
 
12 provided by only one qualified community-based nonprofit
 
13 organization in that community.  The legislature finds that this
 
14 Act will continue to ensure the fair and equitable treatment of
 
15 bidders while streamlining and clarifying the procurement
 
16 process.
 
17      SECTION 2.  Section 103D-306, Hawaii Revised Statutes, is
 
18 amended to read as follows:
 
19      "�103D-306  Sole source procurement.  (a)  A contract may be
 
20 awarded for goods, services, or construction without competition
 
21 when the head of a purchasing agency determines in writing that
 
22 [there]:
 
23      (1)  There is only one source for the required good,
 

 
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 1           service, or construction[,]; or
 
 2      (2)  There is only one qualified community-based nonprofit
 
 3           organization available to provide a particular service
 
 4           within a particular geographical community, as defined
 
 5           by a contracting agency;
 
 6 provided that the determination is reviewed and approved by the
 
 7 chief procurement officer, the written determination is posted in
 
 8 the manner described in rules adopted by the policy board, and no
 
 9 objection is outstanding.  The written determination, any
 
10 objection, and a written summary of the disposition of any
 
11 objection shall be included in the contract file.
 
12      (b)  The written determination shall contain such
 
13 information as the rules of the policy board require.  Persons
 
14 may file written objections to the issuance of a contract
 
15 pursuant to this section.  Rules of the policy board shall
 
16 provide for the disposition of objections, including a written
 
17 summary of the disposition.
 
18      (c)  The rules of the policy board shall include a non-
 
19 exhaustive list of procurements which constitute sole source
 
20 procurements and criteria for determining when a particular
 
21 procurement may be determined to be a sole source.  The rules
 
22 shall also prescribe when cost or pricing data must be considered
 
23 and how they are to be used in establishing the price, terms, and
 

 
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 1 conditions, if any, for a contract awarded pursuant to this
 
 2 section.
 
 3      (d)  As used in this section, "community-based nonprofit
 
 4 organization" means a nonprofit organization that is registered
 
 5 pursuant to chapter 415B, or a "nonprofit private procurement
 
 6 unit" as defined in section 103D-801, that provides specified
 
 7 services within a geographical community representing
 
 8 stakeholders' interests."
 
 9      SECTION 3.  Statutory material to be repealed is bracketed.
 
10 New statutory material is underscored.
 
11      SECTION 4.  This Act shall take effect upon its approval.
 
12 
 
13                              INTRODUCED BY:______________________