RELATING TO PROCUREMENT.

SB3230

THE SENATE

S.B. NO.

3230

THIRTY-THIRD LEGISLATURE, 2026

STATE OF HAWAII

A BILL FOR AN ACT

relating
to procurement
.

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

����
SECTION
1
.
�
Section 103D-101, Hawaii Revised Statutes, is
amended to read as follows:

����
"
�103D-101
�
Requirements of ethical public procurement.
�
(a)
�
All
public employees shall conduct and participate in public procurement in an
ethical manner.
�
In conducting and
participating in procurement, public employees shall:

����
(1)
�
Act as a fiduciary and trustee of
public moneys;

����
(2)
�
Remain independent from any actual or
prospective bidder, offeror, contractor, or business;

����
(3)
�
Act only in the public interest;

����
(4)
�
Abide by the statutes and
administrative rules relating to public procurement;

����
(5)
�
Identify and maximize efficiencies in
the public procurement process;

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(6)
�
Encourage economic competition by:

���������
(A)
�
Ensuring that all persons are afforded
an equal opportunity to compete in a fair and open environment; and

���������
(B)
�
Researching innovative goods and
services to meet the public's needs;

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(7)
�
Avoid the intent and appearance of
unethical behavior;

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(8)
�
Avoid social interactions with any
actual or prospective bidder, offeror, contractor, business, or other
interested parties during the procurement process;

����
(9)
�
Maintain confidentiality in a manner
that ensures a fair procurement process;

���
(10)
�
Remain impartial in dealings with any
actual or prospective bidder, offeror, contractor, business, or other
interested parties; and

���
(11)
�
Identify and eliminate any conflicts of
interest.

����
(b)
�

Any actual or prospective bidder, offeror, [
[
]contractor[
]
],
or business taking part in the conduct of public procurement, shall act in good
faith to practice purchasing ethics, and when applicable, display business
integrity as a responsible offeror through the public procurement process,
including but not limited to the following:

����
(1)
�
Avoiding
the intent and appearance of unethical behavior or business practices;

����
(2)
�
Refraining
from any activity that would create the appearance of impropriety or conflicts
of personal interest and the interests of the State or counties;

����
(3)
�
Identifying
and eliminating any conflicts of interest; and

����
(4)
�
Ensuring
that all persons are afforded an equal opportunity to compete in a fair and
open environment.

����
(c)
�
All parties involved in the negotiation,
performance, or administration of state contracts shall act in good faith.

����
(d)
�

Governmental bodies and public employees shall not procure services for
project management through non-governmental third-party contracts; provided
that this subsection shall not apply to the procurement of independent
verification and validation contracts for information technology services if
approved by the agency's respective chief procurement officer, as provided
under section 103D-203.
"

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SECTION
2.
�
Section 103D-104, Hawaii Revised
Statutes, is amended by adding a new definition to be appropriately inserted
and to read as follows:

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"
"Project
management"
means a professional service that
manages a project's schedule, cost, quality, safety, scope, and function, and
ensures that the project is completed on time and within budget.
"

����
SECTION
3
.
�
Section 103D-326, Hawaii Revised Statutes, is
amended to read as follows:

����
"
[
[
]�103D-326[
]
]
�

Fiscal responsibility.
�
Every
contract modification,
budget transfer,
change order, or contract price
adjustment under a contract shall be subject to prior written certification by
the appropriate fiscal officer for funding the project or the contract, as to
the effect of the contract modification,
budget transfer,
change order,
or adjustment in contract price on the total project budget or the total
contract budget.
�
In the event that the
certification of the fiscal officer discloses a resulting increase in the total
project budget or the total contract budget, the procurement officer shall not
execute or make such contract modification,
budget transfer,
change
order, or adjustment in contract price unless sufficient funds are available
therefor, or the scope of the project or contract is adjusted so as to permit
the degree of completion that is feasible within the total project budget or
total contract budget as it existed prior to the contract modification,
budget
transfer,
change order, or adjustment in contract price under
consideration; provided, that with respect to the validity, as to the
contractor, of any executed contract modification,
budget transfer,

change order, or adjustment in contract price which the contractor has
reasonably relied upon, it shall be presumed that there has been compliance
with this section."

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SECTION 4.
�

There is appropriated out of the general revenues of the State of Hawaii
the sum of $728,927 or so much thereof as may be necessary for fiscal year
2026-2027 to establish a special project branch within the public works
division of the department of accounting and general services, including three
full-time equivalent (3.0 FTE) permanent positions, to provide specialized
expertise and staff resources that support the division's implementation of
certain complex, high-profile capital improvement program projects using
innovative, non‑traditional delivery methods.

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The sum appropriated shall be expended by
the department of accounting and general services for the purposes of this Act.

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SECTION 5.
�

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

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SECTION 6.
�

This Act shall take effect on July 1, 2026.

INTRODUCED BY:

_____________________________

Report Title:

DAGS; Procurement;
Ethical Public Procurement; Budget Transfers; Certification; Fiscal Officers; Public
Works Division; Special Project Branch; Positions; Appropriation

Description:

Prohibits
all governmental bodies and public employees from procuring services for
project management through non‑governmental third-party contracts, except
for certain procurements of independent verification and validation contracts
for information technology services.
�

Requires every budget transfer to receive prior written certification
from an appropriate fiscal officer as to the effect the budget transfer will
have on the total project budget or the total contract budget.
�
Appropriates moneys to
establish a
Special Project Branch within the Public Works Division of the Department of
Accounting and General Services, including 3.0 full-time equivalent permanent
positions, to provide specialized expertise and staff resources that support
the Division's implementation of certain complex, high-profile capital
improvement program projects using innovative, non‑traditional delivery
methods.

The summary description
of legislation appearing on this page is for informational purposes only and is
not legislation or evidence of legislative intent.