Report Title:

Procurement, employment, and ARRA funds

 

Description:

Creates temporary exemptions in procurement, rulemaking, and civil service employment statutes for programs, services, and benefits using funds allocated to the State by the American Recovery and Reinvestment Act of 2009.  (HB1184 HD2)

 


HOUSE OF REPRESENTATIVES

H.B. NO.

1184

TWENTY-FIFTH LEGISLATURE, 2009

H.D. 2

STATE OF HAWAII

 

 

 

 

 

 

A BILL FOR AN ACT


 

 

RELATING TO STATE GOVERNMENT.

 

 

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

 


Section 1.  The legislature finds that the enactment of the American Recovery and Reinvestment Act of 2009, Pub. L. No. 111‑5 (ARRA), envisioned by President Barack Obama as money going "out the door immediately," will require expedited procedures to allow the State to immediately take full advantage of the funding for programs, services, and benefits authorized by ARRA to bring the benefits of the federal stimulus plan to the people of Hawaii at the earliest practicable time.

The legislature further finds that in these times of economic turmoil, this Act would be instrumental in bringing, as soon as possible, additional financial assistance and other social services to Hawaii residents who have been affected by the current economic climate, as well as improving and expanding benefits to the neediest individuals and families.

The purpose of this Act is to provide temporary exemptions from current statutes relating to procurement, rulemaking, and civil service employment to allow the State to expedite the implementation or expansion of programs, services, and benefits authorized by ARRA. 

ARRA has specific accountability and transparency provisions to prevent fraud, waste, and abuse, to ensure against poor contracting or grant management, and to ensure the use of competitive procedures.  The federal government is provided expansive investigatory and auditing powers to monitor, oversee, and ensure that the ARRA funds are used for their intended purposes and with the full review and vetting required by law.  Therefore, the goal of this Act is to strike the appropriate balance between expedited procedures and necessary accountability and transparency.

It is not the intent of the legislature to provide permanent exemptions to the relevant statutes, and this Act shall be applied only to expediting the expenditure of federal funds authorized in ARRA, or to expending the matching state funds, if any, required to access the federal funding in ARRA.

SECTION 2.  (a)  Contracts for goods, services, construction, or health and human services using federal funds authorized by ARRA and matching state funds, if any, shall be subject to chapter 103D and chapter 103F, Hawaii Revised Statutes, unless covered by any exemptions adopted by the procurement policy board or the respective chief procurement officers; provided that if the governor, mayor, or other chief executive, as appropriate, who is to certify proper review and use of funds under section 1511 of ARRA, finds that the federal funding may lapse because of the required deadlines under ARRA, the solicitation, award, and subsequent contract may be subject to the requirements of subsection (b).  Prior to initiating any procedures under subsection (b), the governor, mayor, or other chief executive, as appropriate, shall provide written notice to the senate president, the speaker of the house of representatives, and the general public on the electronic procurement system identifying:

     (1) The federal funding, and matching state funds, if applicable;

     (2)  The target population or clients to be served;

     (3)  A description of the goods, services, health and human services, or construction; and

     (4)  Facts, laws, regulations, and other information that demonstrates the potential lapse of the federal funding should expedited procedures not be used.

     (b)  Subject to subsection (a), contracts necessary to be expedited due to potential lapse of available funds under ARRA may be subject to the following alternative requirements:

     (1)  Procurements having a value of less than $150,000 for goods and services or health and human services, and procurements having a value of less than $250,000 for construction, shall be made through an electronic procurement system to obtain price quotations based on specifications.  Vendors, contractors, and service providers that supply the goods, services, construction, or health and human services shall be solicited and considered to meet the minimum requirements.  Award shall be made to the lowest responsive offer and responsible offeror.  When an award to the lowest responsive offer and responsible offeror is not practicable, the award shall be made to the offeror whose offer provides the best value to the State.  "Best value" means the most advantageous offer determined by evaluating and comparing all relevant criteria in addition to price so that the offer meeting the overall combination that best serves the State is selected.  These criteria may include:

         (A)  The total cost of ownership;

         (B)  Performance history of the vendor, contractor, or service provider;

         (C)  Quality of goods, services, construction, or health and human services;

         (D)  Delivery; and

         (E)  Proposed technical performance.

          Written determination for the selection shall be placed in the procurement file.

(2)  For procurements having a value of $150,000 or more for goods, services, or health and human services, and of $250,000 or more for construction, purchasing agencies, with the approval of the head of the purchasing agency, may issue a solicitation to select a contractor or contractors.  The solicitation shall include the following:

(A)  Identification and purpose of the federal funding and matching state funds, if applicable;

(B)  Target population or clients to be served;

(C)  A description of the goods, services, health and human services, or construction;

(D)  The evaluation criteria and their relative weights, including the relative importance of price, for selecting a contractor or contractors;

(E)  The format, if any, and procedure for submitting responses to the solicitation; and

(F)  The deadline for submittal of written responses to the solicitation.

          The selection of a contractor or contractors shall be based on the criteria established in the solicitation.  The relative priority to be applied to each evaluation factor shall also be set out in the solicitation.  Evaluation factors not specified in the solicitation may not be considered.  The head of the purchasing agency shall designate a committee consisting of at least three governmental employees with sufficient and relevant education, training, and licenses or credentials for each type of procurement.  In designating the members of the committee, the head of the purchasing agency shall ensure the impartiality and independence of committee members.    The committee shall review and evaluate all submissions, including references, and considering the criteria, the committee shall determine the lowest responsive offer and responsible offeror and provide that information to the head of the purchasing agency.  The head of the purchasing agency shall award the contract or contracts based upon the information provided by the committee.  Award shall be made to the lowest responsive offer and responsible offeror.  When an award to the lowest responsive offer and responsible offeror is not practicable, the award shall be made to the offeror whose offer provides the best value to the State.  Written determination for the selection shall be placed in the procurement file. 

     (3)  Awards made pursuant to this Act shall be posted electronically within five working days of the notice of award to an Internet site designated by the chief procurement officer.

     (4)  Notwithstanding any other law, regulation, or practice to the contrary, for purposes of this subsection:

         (A)  Contracts shall be deemed effective as of the notice of the award;

         (B)  The solicitation, offer, bid, or proposal and the notice of award shall constitute the entire contract and agreement between the government and the contractor; and

         (C)  A subsequent written and executed contract document is not required.

     (5)  Any actual or prospective bidder, offeror, vendor, contractor, service provider, or person aggrieved by an award of a contract pursuant to this Act may protest a purchasing agency's failure to follow procedures established by this Act.  The protest shall be submitted to the chief procurement officer, in writing, within five working days after posting of the notice of award.  The chief procurement officer, or a designee, may settle and resolve a protest by one or more of the following means:

(A)  Amending or canceling a request for interest;

(B)  Terminating the contract that was awarded;

(C)  Initiating a new process to award a contract;

(D)  Declaring the contract null and void from the time of its award; or

(E)  Affirming the purchasing agency's contract award decision.

          If the protest is not resolved by mutual agreement, the chief procurement officer, or a designee, shall issue a decision in writing within ten working days of receipt of the protest.  The decision shall state the reasons for the action taken.  A copy of the written decision shall be mailed or otherwise furnished to the bidder, offeror, vendor, contractor, service provider, or person who initiated the protest.  The decision of the chief procurement officer shall be final and conclusive unless the bidder, offeror, vendor, contractor, service provider, or person who is aggrieved by an award of a contract submits a request for review under section 103D-709(a), Hawaii Revised Statutes, within five working days of the receipt of the written decision.  The request shall contain a specific statement of the factual and legal grounds upon which reconsideration is sought.  Notwithstanding any law or rule to the contrary, a decision shall be rendered within ten working days from receipt of the request for review and shall be deemed final and conclusive.  The procedures and remedies provided for in this Act shall be the exclusive means available for bidders, offerors, vendors, contractors, service providers, and persons aggrieved in connection with the award of a contract to resolve their concerns.   The filing of a protest or a request for review shall not stay the award of any contract made under this Act, unless so ordered by the chief procurement officer.

SECTION 3.  Sections 103-8.5, 103-53(a), and 103-55, Hawaii Revised Statutes, shall not apply to contracts for goods, services, construction, or health and human services using federal funds authorized by ARRA and matching state funds required to access the federal funding in ARRA; provided that tax clearances from the director of taxation and the Internal Revenue Service shall be received prior to final payment certifying that all tax returns due have been filed, and all taxes, interest, and penalties levied against the contractor or accrued under title 14 of the Hawaii Revised Statutes, that are administered by the department of taxation and under the Internal Revenue Code have been paid. 

SECTION 4.  If rules are required to implement new or expanded programs, services, or benefits authorized or funded by ARRA, the responsible agency may issue interim rules by adoption and filing with the lieutenant governor and posting the interim rules on the lieutenant governor's website.  Interim rules adopted pursuant to this Act shall be exempt from the requirements of chapter 91, Hawaii Revised Statutes, and shall take effect upon filing with the lieutenant governor.  The interim rules shall be effective only through December 31, 2012.  To continue beyond December 31, 2012, with respect to any new or expanded programs, services, or benefits that have been implemented with interim rules, the responsible agency shall adopt rules in conformance with all the requirements of chapter 91. 

     SECTION 5.  Section 76-16, Hawaii Revised Statutes, is amended by amending subsection (b) to read as follows:

     "(b)  The civil service to which this chapter applies shall comprise all positions in the [State] state now existing or hereafter established and embrace all personal services performed for the State, except the following:

(1)    Commissioned and enlisted personnel of the Hawaii national guard as such, and positions in the Hawaii national guard that are required by state or federal laws or regulations or orders of the national guard to be filled from those commissioned or enlisted personnel;

(2)    Positions filled by persons employed by contract where the director of human resources development has certified that the service is special or unique or is essential to the public interest and that, because of circumstances surrounding its fulfillment, personnel to perform the service cannot be obtained through normal civil service recruitment procedures.  Any such contract may be for any period not exceeding one year;

(3)    Positions that must be filled without delay to comply with a court order or decree if the director determines that recruitment through normal recruitment civil service procedures would result in delay or noncompliance, such as the Felix-Cayetano consent decree;

(4)    Positions filled by the legislature or by either house or any committee thereof;

(5)    Employees in the office of the governor and office of the lieutenant governor, and household employees at Washington Place;

(6)    Positions filled by popular vote;

(7)    Department heads, officers, and members of any board, commission, or other state agency whose appointments are made by the governor or are required by law to be confirmed by the senate;

(8)    Judges, referees, receivers, masters, jurors, notaries public, land court examiners, court commissioners, and attorneys appointed by a state court for a special temporary service;

(9)    One bailiff for the chief justice of the supreme court who shall have the powers and duties of a court officer and bailiff under section 606-14; one secretary or clerk for each justice of the supreme court, each judge of the intermediate appellate court, and each judge of the circuit court; one secretary for the judicial council; one deputy administrative director of the courts; three law clerks for the chief justice of the supreme court, two law clerks for each associate justice of the supreme court and each judge of the intermediate appellate court, one law clerk for each judge of the circuit court, two additional law clerks for the civil administrative judge of the circuit court of the first circuit, two additional law clerks for the criminal administrative judge of the circuit court of the first circuit, one additional law clerk for the senior judge of the family court of the first circuit, two additional law clerks for the civil motions judge of the circuit court of the first circuit, two additional law clerks for the criminal motions judge of the circuit court of the first circuit, and two law clerks for the administrative judge of the district court of the first circuit; and one private secretary for the administrative director of the courts, the deputy administrative director of the courts, each department head, each deputy or first assistant, and each additional deputy, or assistant deputy or assistant defined in paragraph (16);

    (10)  First deputy and deputy attorneys general, the administrative services manager of the department of attorney general, one secretary for the administrative services manager, an administrator and any support staff for the criminal and juvenile justice resources coordination functions, and law clerks;

    (11)  (A) Teachers, principals, vice-principals, complex area superintendents, deputy and assistant superintendents, other certificated personnel, not more than twenty noncertificated administrative, professional, and technical personnel not engaged in instructional work;

(B)  Effective July 1, 2003, teaching assistants, educational assistants, bilingual/bicultural school-home assistants, school psychologists, psychological examiners, speech pathologists, athletic health care trainers, alternative school work study assistants, alternative school educational/supportive services specialists, alternative school project coordinators, and communications aides in the department of education;

(C)  The special assistant to the state librarian and one secretary for the special assistant to the state librarian; and

(D)  Members of the faculty of the University of Hawaii, including research workers, extension agents, personnel engaged in instructional work and administrative, professional, and technical personnel of the university;

    (12)  Employees engaged in special, research, or demonstration projects approved by the governor;

    (13)  Positions filled by inmates, kokuas, patients of state institutions, persons with severe physical or mental handicaps participating in the work experience training programs, and students and positions filled through federally funded programs that provide temporary public service employment such as the federal Comprehensive Employment and Training Act of 1973;

    (14)  A custodian or guide at Iolani Palace, the Royal Mausoleum, and Hulihee Palace;

    (15)  Positions filled by persons employed on a fee, contract, or piecework basis, who may lawfully perform their duties concurrently with their private business or profession or other private employment and whose duties require only a portion of their time, if it is impracticable to ascertain or anticipate the portion of time to be devoted to the services of the State;

    (16)  Positions of first deputies or first assistants of each department head appointed under or in the manner provided in section 6, Article V, of the [State] Hawaii Constitution; three additional deputies or assistants either in charge of the highways, harbors, and airports divisions or other functions within the department of transportation as may be assigned by the director of transportation, with the approval of the governor; four additional deputies in the department of health, each in charge of one of the following:  behavioral health, environmental health, hospitals, and health resources administration, including other functions within the department as may be assigned by the director of health, with the approval of the governor; an administrative assistant to the state librarian; and an administrative assistant to the superintendent of education;

    (17)  Positions specifically exempted from this part by any other law; provided that all of the positions defined by paragraph (9) shall be included in the position classification plan;

    (18)  Positions in the state foster grandparent program and positions for temporary employment of senior citizens in occupations in which there is a severe personnel shortage or in special projects;

    (19)  Household employees at the official residence of the president of the University of Hawaii;

    (20)  Employees in the department of education engaged in the supervision of students during meal periods in the distribution, collection, and counting of meal tickets, and in the cleaning of classrooms after school hours on a less than half-time basis;

    (21)  Employees hired under the tenant hire program of the Hawaii public housing authority; provided that not more than twenty-six per cent of the authority's work force in any housing project maintained or operated by the authority shall be hired under the tenant hire program;

    (22)  Positions of the federally funded expanded food and nutrition program of the University of Hawaii that require the hiring of nutrition program assistants who live in the areas they serve;

    (23)  Positions filled by severely handicapped persons who are certified by the state vocational rehabilitation office that they are able to perform safely the duties of the positions;

    (24)  One public high school student to be selected by the Hawaii state student council as a nonvoting member on the board of education as authorized by the [State] Hawaii Constitution;

    (25)  Sheriff, first deputy sheriff, and second deputy sheriff;

    (26)  A gender and other fairness coordinator hired by the judiciary; [and]

    (27)  Positions in the Hawaii national guard youth challenge academy[.]; and

    (28)  Positions or contracts for services with private persons or entities for services lasting no more than two years where the director of human resources development has certified that the service is necessary for the efficient and timely implementation of programs authorized or funded by the federal American Recovery and Reinvestment Act of 2009, and provided that federal and matching state funds under the Act are encumbered no later than September 30, 2010.

The director shall determine the applicability of this section to specific positions.

Nothing in this section shall be deemed to affect the civil service status of any incumbent as it existed on July 1, 1955."

     SECTION 6.  The expenditure ceiling placed on the use of temporary assistance for needy families funds in the General Appropriations Act of 2009, and any other expenditure limits placed on the use of temporary assistance for needy families funds, shall be raised or waived to the extent necessary for the department to use the funds provided under the American Recovery and Reinvestment Act of 2009, up to the amount actually provided to the State. 

SECTION 7.  This Act shall take effect upon its approval and shall be repealed on December 31, 2012; provided that section 76-16(b), Hawaii Revised Statutes, is reenacted in the form in which it read on the day before the effective date of this Act.