HR 55: Requesting the Department of Accounting and General Services to study the feasibility of limiting the costs of project and construction management in each state construction project to ten percent of the total cost of the project.

HOUSE RESOLUTION

Requesting the Department of Accounting and General Services to study the feasibility of limiting the costs of project and construction management in each state construction project to ten percent of the total cost of the project.

     WHEREAS, the State expends more than $1 billion per year on capital improvement projects, including construction or renovation of roads, buildings, harbors, and airports; and

     WHEREAS, Honolulu has some of the highest construction costs in the world due, in part, to the high cost of transporting goods to Hawaii, the cost of fuel, and high labor costs; and

     WHEREAS, the costs for project and construction management, which traditionally should account for seven to eleven percent of a project, have increased significantly over the last decade, with some contractors charging as much as fifteen percent of a project's cost for management expenses; and

     WHEREAS, being able to control rising construction costs would help to more efficiently use state funds; now, therefore,

     BE IT RESOLVED by the House of Representatives of the Thirty-third Legislature of the State of Hawaii, Regular Session of 2025, that the Department of Accounting and General Services is requested to study the feasibility of limiting the costs of project and construction management costs in each state construction project to ten percent of the total cost of the project; and

     BE IT FURTHER RESOLVED that the Department of Accounting and General Services is requested to submit a report of its findings and recommendations, including any proposed legislation, to the Legislature no later than twenty days prior to the convening of the Regular Session of 2026; and

     BE IT FURTHER RESOLVED that a certified copy of this Resolution be transmitted to the Comptroller.

Report Title: 

Construction Costs; Management; Department of Accounting and General Services; Study

STAND. COM. REP. NO.  1795

Honolulu, Hawaii

                , 2025

RE:   H.R. No. 55

Honorable Nadine K. Nakamura

Speaker, House of Representatives

Thirty-Third State Legislature

Regular Session of 2025

State of Hawaii

Madame:

     Your Committee on Finance, to which was referred H.R. No. 55 entitled:

"HOUSE RESOLUTION REQUESTING THE DEPARTMENT OF ACCOUNTING AND GENERAL SERVICES TO STUDY THE FEASIBILITY OF LIMITING THE COSTS OF PROJECT AND CONSTRUCTION MANAGEMENT IN EACH STATE CONSTRUCTION PROJECT TO TEN PERCENT OF THE TOTAL COST OF THE PROJECT,"

begs leave to report as follows:

     The purpose of this measure is to request the Department of Accounting and General Services to study the feasibility of limiting the costs of project and construction management in each state construction project to ten percent of the total cost of the project.

     Your Committee received testimony in support of this measure from the Department of Accounting and General Services and one individual.

     As affirmed by the record of votes of the members of your Committee on Finance that is attached to this report, your Committee concurs with the intent and purpose of H.R. No. 55 and recommends its adoption.

Respectfully submitted on behalf of the members of the Committee on Finance,