HOUSE OF REPRESENTATIVES

H.B. NO.

2133

TWENTY-FIFTH LEGISLATURE, 2010

H.D. 1

STATE OF HAWAII

S.D. 1

 

 

 

 

 

A BILL FOR AN ACT

 

 

RELATING TO PROCUREMENT.

 

 

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


 

PART I

     SECTION 1.  Following the 2009 legislative session, the chairs of the senate committee on economic development and technology and the house committee on economic revitalization, business and military affairs convened a technology caucus work group to bring together industry stakeholders and interested policymakers to develop recommendations for legislation to enhance Hawaii's struggling economy.  The work group provided a forum to review the current status of Hawaii's science/technology industry, identify state or county actions that impede long-term growth and expansion of technology companies, and develop recommendations to address these impediments.  The work group also identified best practices supporting the growth and development of science/technology industries in other jurisdictions to aid in developing proposed suggestions for future legislation.

PART II

     SECTION 2.  The legislature finds that the Western States Contracting Alliance (WSCA) was formed in October 1993 by the state purchasing directors from fifteen western states.  The primary purpose of creating WSCA was to establish the means by which participating states may join together in cooperative multi-state contracting to achieve cost-effective and efficient acquisition of quality products and services.  WSCA uses a cooperative, competitive model to capture the best pricing possible for the volume of purchases being made.  However, once a brand determination has been made, and WSCA has been chosen as the contracting vehicle, there is no incentive for the chosen manufacturer to offer any additional discounts below the pre‑negotiated WSCA price.

     The legislature further finds that WSCA does allow for the extension of this competitive environment at the individual order level by allowing each contract holder to designate multiple resellers (servicing subcontractors) to quote and sell products under their respective WSCA contract within any particular participating state.  The use of reseller agents expands the discounting possibilities by pitting two or more resellers against each other in a competitive environment; in most cases ensuring additional discounts are offered by the resellers to secure the task order award.  Additionally, as these selected reseller agents are usually local firms, WSCA customers receive better service than if working directly with a manufacturer that has little or no local presence.  The majority of states with WSCA agreements use reseller agents.

     In the past, Hawaii placed orders for goods and services directly with local reseller agents for goods and services procured under WSCA multistate agreements; however, since 2009, the state procurement office has changed its practices and now requires purchase orders for goods and services to be placed directly with original equipment manufacturers.  By doing so, the State has eliminated an efficient, cost-effective means of obtaining local support for goods and services procured under WSCA agreements and replaced it with a procedure that costs the same, but does not include the level of servicing support that occurred previously.

     The purpose of this part is to implement recommendations of the technology caucus work group by requiring the state procurement office to authorize reseller agreements in multi‑state contracting agreements.

     SECTION 3.  Chapter 103D, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:

     "§103D-    Reseller agreements.  The state procurement office shall authorize local reseller agreements as part of any multi-state contracting agreement and shall place orders directly with local resellers; provided that they are authorized and designated by original equipment manufacturers or other national equipment or products suppliers."

PART III

     SECTION 4.  This Act does not affect rights and duties that matured, penalties that were incurred, and proceedings that were begun before its effective date.

     SECTION 5.  New statutory material is underscored.

     SECTION 6.  This Act shall take effect upon its approval.

 



 

Report Title:

Procurement

 

Description:

Requires the state procurement office to authorize reseller agreements in multi-state contracting agreements and to place orders directly with local resellers designated by original equipment manufacturers.  (SD1)

 

 

 

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