STAND. COM. REP. NO. 224

                                   Honolulu, Hawaii
                                                     , 1999

                                   RE:  S.B. No. 1391
                                        




Honorable Norman Mizuguchi
President of the Senate
Twentieth State Legislature
Regular Session of 1999
State of Hawaii

Sir:

     Your Committee on Government Operations and Housing, to
which was referred S.B. No. 1391 entitled: 

     "A BILL FOR AN ACT RELATING TO CONTRACT AND PROCUREMENT
     FRAUD,"

begs leave to report as follows:
     
     The purpose of this measure is to establish a law against
contract and procurement fraud and impose penalties.

     Your Committee received testimony in support of this measure
from the City and County of Honolulu and the Hawaii Operating
Engineers Industry Stabilization Fund.

     Your Committee finds that government employees with
responsibilities for procurement and contracting of services are
in positions of immense authority in a highly complex area.  With
this expertise in the bid system, a few of these employees have
been able to funnel millions of dollars in public funds to enrich
themselves and others.

     Your Committee supports this measure and believes it is
critical to maintain the integrity of the bidding process and
protect the State and the public in general from fraud and
deception.

     As affirmed by the record of votes of the members of your
Committee on Government Operations and Housing that is attached
to this report, your Committee is in accord with the intent and

 
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                                   STAND. COM. REP. NO. 224
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purpose of S.B. No. 1391 and recommends that it pass Second
Reading and be referred to the Committee on Judiciary.

                                   Respectfully submitted on
                                   behalf of the members of the
                                   Committee on Government
                                   Operations and Housing,



                                   ______________________________
                                   ROD TAM, Chair

 
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