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HB809
HOUSE OF REPRESENTATIVES
H.B. NO.
809
THIRTY-THIRD LEGISLATURE, 2025
STATE OF HAWAII
A BILL FOR AN ACT
RELATING
TO PROCUREMENT
.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:
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SECTION 1.
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The legislature finds that the Hawaii public
procurement code currently requires general contractors to disclose the
subcontractors they intend to use on a project.
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The intent of this requirement is to deter bid shopping � the practice
of low-bidding general contractors unethically extracting lower prices from
subcontractors under the threat of replacement.
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Although stakeholders agree that the disclosure requirement accomplishes
this goal, the legislature notes that the federal government and a vast
majority of states do not have a similar disclosure requirement in their
procurement processes.
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The legislature further finds that
this disclosure requirement has the unintended consequence of increasing the
number and complexity of construction protests.
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The state procurement office's review of Hawaii procurement laws found
that most protests allege technical issues stemming from the subcontractor
listing requirement.
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These technical
mistakes include instances where a bidder failed to list a required
subcontractor or when a listed subcontractor did not possess the appropriate
license and was not qualified to perform the work.
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Recommendation III-2 of the state
procurement office's review of Hawaii procurement laws eliminates the
requirement for bidders to disclose the nature and scope of work expected to be
performed by a subcontractor.
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However,
the legislature further finds that this issue with the subcontractor listing
may be addressed instead by providing prime contractors with additional time to
correct immaterial or technical issues with subcontractor listings.
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Inadvertent errors can occur due to
the complexity of the laws regarding contractor licenses under chapter 444,
Hawaii Revised Statutes; title 16, Hawaii Administrative Rules; and the
judicial, quasi-judicial, and agency interpretations of these laws and
rules.
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Time constraints from when a
bidder receives the bids from all of its subcontractors up until the procuring
agency's bid submission deadline may also cause inadvertent failures to list a
required subcontractor or the listing of erroneous subcontractor license
numbers in a bid.
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The legislature
further recognizes that the provision of additional time for prime contractors
to correct their subcontractor listings would facilitate the legislature's
intent of ensuring that subcontractors are listed properly on the bid submittal
and are licensed, while maintaining the integrity of the bid process.
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The purpose of this Act is to
minimize bid challenges, costs, and delays of public works construction
projects for five years by:
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(1)
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Allowing a bidder
of a public works construction project to clarify and correct immaterial or
technical issues with subcontractor listings for up to twenty-four hours after
the bid submission deadline, which shall be complementary and in addition to
the time allowed by the procurement policy board to correct or withdraw
inadvertently erroneous bids;
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(2)
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Requiring that
bids for construction be publicly opened no sooner than twenty-four hours after
the bid submission deadline; and
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(3)
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Defining
"immaterial or technical information".
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SECTION
2
.
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Section
103D-302, Hawaii Revised Statutes, is amended to read as follows:
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"
�103D-302
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Competitive sealed
bidding.
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(a)
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Contracts shall be awarded by competitive
sealed bidding except as otherwise provided in section 103D-301.
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Awards of contracts by competitive sealed
bidding may be made after single or multi-step bidding.
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Competitive sealed bidding does not include
negotiations with bidders after the receipt and opening of bids.
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Award is based on the criteria set forth in
the invitation for bids.
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(b)
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An invitation for bids shall be issued, and shall include a purchase
description and all contractual terms and conditions applicable to the
procurement.
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If the invitation for bids
is for construction, it shall [
specify
]
:
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(1)
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Specify
that all bids include the name of each person or firm to be engaged by the
bidder as a joint contractor or subcontractor in the performance of the
contract and the nature and scope of the work to be performed by each[
.
]
;
and
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(2)
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Allow the
bidder to clarify or correct immaterial or technical information required by
paragraph (1) for up to twenty-four hours after the bid submission deadline;
provided that any additions or substitutions of listed joint subcontractors
shall be prohibited, including changes to the nature and scope of work as
listed; provided further that the twenty-four-hour period shall be
complementary and in addition to the time for correction or withdrawal of
inadvertently erroneous bids before or after award, as permitted in accordance
with rules adopted by the policy board pursuant to subsection (g).
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This paragraph does not
abrogate or modify, and shall not be construed or deemed to abrogate or modify,
the authority of the regulated industries complaints office of the department
of commerce and consumer affairs and contractors license board to enforce
chapter 444.
Construction bids that do not comply with this
requirement may be accepted if acceptance is in the best interest of the State
and the value of the work to be performed by the joint contractor or
subcontractor is equal to or less than one per cent of the total bid amount.
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(c)
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Adequate public notice of the invitation for bids shall be given a
reasonable time before the date set forth in the invitation for the opening of
bids.
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The policy board shall adopt rules
[
which
]
that
specify:
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(1)
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The form that the
notice is to take;
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(2)
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What constitutes a
reasonable interim between publication and bid opening; and
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(3)
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How notice may be
published, including publication in a newspaper of general circulation, notice
by mail to all persons on any applicable bidders mailing list, publication by
any public or private telecommunication information network, or any other
method of publication it deems to be effective.
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(d)
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Bids shall be opened publicly in the presence of one or more witnesses,
at the time and place designated in the invitation for bids[
.
]
;
provided that if the bid is for construction, it shall be
opened no sooner than twenty-four hours after the deadline for the submission
of the bids
.
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The amount of each
bid and other relevant information specified by rule, together with the name of
each bidder
,
shall be recorded.
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The record and each bid shall be open to public inspection.
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(e)
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Bids shall be unconditionally accepted without alteration or correction,
except as authorized in this chapter or by rules adopted by the policy board.
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(f)
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Bids shall be evaluated based on the requirements set forth in the
invitation for bids.
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These requirements
may include criteria to determine acceptability such as inspection, testing,
quality, workmanship, delivery, and suitability for a particular purpose.
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Those criteria that will affect the bid price
and be considered in evaluation for award shall be as objectively measurable as
possible, such as discounts, transportation costs, total or life cycle costs,
and the bidder's past performance, if available.
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The invitation for bids shall set forth the
evaluation criteria to be used.
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No
criteria may be used in bid evaluation that are not set forth in the invitation
for bids.
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(g)
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Correction or withdrawal of inadvertently erroneous bids before or after
award, or cancellation of invitations for bids, awards, or contracts based on
such bid mistakes, shall be permitted in accordance with rules adopted by the
policy board.
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After bid opening no
changes in bid prices or other provisions of bids prejudicial to the interest
of the public or to fair competition shall be permitted.
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Except as otherwise provided by rule, all
decisions to permit the correction or withdrawal of bids, or to cancel awards
or contracts based on bid mistakes, shall be supported by a written
determination made by the chief procurement officer or head of a purchasing
agency.
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(h)
�
The contract shall be awarded with reasonable promptness by written
notice to the lowest responsible and responsive bidder whose bid meets the
requirements and criteria set forth in the invitation for bids.
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In the event all bids exceed available funds
as certified by the appropriate fiscal officer, the head of the purchasing
agency responsible for the procurement in question is authorized in situations
where time or economic considerations preclude resolicitation of work of a
reduced scope to negotiate an adjustment of the bid price, including changes in
the bid requirements, with the low responsible and responsive bidder, in order
to bring the bid within the amount of available funds.
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(i)
�
When it is not practicable to initially prepare a purchase description
to support an award based on price, an invitation for bids, which requests the
submission of unpriced offers to be followed by an invitation for bids limited
to those bidders whose offers have been qualified under the criteria set forth
in the first solicitation, may be used.
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If a multi-step sealed bidding process is used, the notice and [
the
]
invitation for bids shall describe each step to be used in soliciting,
evaluating, and selecting unpriced offers.
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(j)
�
For purposes of this section,
"immaterial or technical information" means:
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(1)
�
An irregularity
or abnormality that, as a matter of form, does not affect substance; or
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(2)
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An
inconsequential variation that has no, little, or a trivial effect on the
procurement process and is not prejudicial to other vendors.
"Immaterial or
technical information" includes a missing signature; typographical errors;
an error resulting from an inaccuracy or omission; and a listed subcontractor
whose license at bid time had been suspended or forfeited due solely to a
ministerial act, pursuant to chapter 444; provided that by the time of the
award, the subcontractor's license has been reinstated.
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"Immaterial or technical
information" does not include the identity of a subcontractor.
"
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SECTION
3.
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Statutory material to be repealed is
bracketed and stricken.
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New statutory
material is underscored.
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SECTION 4.
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This Act shall take effect on July 01,
2025; provided that on
June 30,
2027
, this Act shall be repealed and section
103D-302
, Hawaii Revised Statutes, shall be reenacted in
the form in which it read on the day before the effective date of this Act.
INTRODUCED BY:
_____________________________
Report Title:
Procurement; Bid Submissions; Immaterial or Technical
Information
Description:
Allows bidders to clarify or correct immaterial or
technical information required as part of a bid submission for up to
twenty-four hours after the bid submission deadline.
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Requires that bids for construction be opened
no sooner than twenty-four hours after the deadline for the submission of bids.
Defines "immaterial or technical information".
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Repeals 6/30/2027.
The summary description
of legislation appearing on this page is for informational purposes only and is
not legislation or evidence of legislative intent.