HB 1955: Procurement; Public Contracts; Small Purchases; Vendor Compliance

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 under existing procurement law, any offeror awarded a state contract of $2,500 or more must demonstrate compliance with various state laws governing businesses, including tax and employment laws.  While ensuring legal compliance is important to uphold fairness and accountability in public contracting, the existing $2,500 threshold triggering this requirement is outdated and unduly low.  This threshold, which has remained unchanged for many years, forces even very small procurement awards to undergo the same compliance certification process as much larger contracts.  The additional paperwork and procedural hurdles for these minor contracts can deter potential vendors, especially small local businesses and out-of-state or foreign companies, from participating in state solicitations due to the time and expense of obtaining required clearances relative to the contract size.

     The legislature further finds that raising this compliance threshold will modernize Hawaii's procurement practices and improve government efficiency.  By increasing the dollar amount at which formal vendor compliance verification is required, state agencies will be able to expedite routine small purchases and reduce administrative burdens, freeing up resources to focus on larger contracts and other priorities.

     Therefore, the purpose of this Act is to raise the contract award value that triggers required proof of vendor compliance from $2,500 to $6,000.

     SECTION 2.  Section 103D-310, Hawaii Revised Statutes, is amended by amending subsection (c) to read as follows:

     "(c)  All offerors, upon award of contract, shall comply with all laws governing entities doing business in the State, including chapters 237, 383, 386, 392, and 393.  Offerors shall produce documents to the procuring officer to demonstrate compliance with this subsection.  Any offeror making a false affirmation or certification under this subsection shall be suspended from further offerings or awards pursuant to section 103D-702.  The procuring officer shall verify compliance with this subsection for all contracts awarded pursuant to sections 103D-302, 103D-303, 103D-304, and 103D-306, and for contracts and procurements of [$2,500] $6,000 or more awarded pursuant to section 103D-305; provided that the attorney general may waive the requirements of this subsection for contracts for legal services if the attorney general certifies in writing that comparable legal services are not available in [this] the State."

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

     SECTION 4.  This Act shall take effect upon its approval.

Report Title:

Procurement; Public Contracts; Small Purchases; Vendor Compliance

Description:

Increases the contract award value that triggers required proof of vendor compliance from $2,500 to $6,000.

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