Hawaii HB 809: RELATING TO PROCUREMENT.

Bill Text

HOUSE OF REPRESENTATIVES
THIRTY-THIRD LEGISLATURE, 2025 H.B. NO.
STATE OF HAWAII
A BILL FOR AN ACT
RELATING TO PROCUREMENT.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:
1 SECTION 1. The legislature finds that the Hawaii public
2 procurement code currently requires general contractors to
3 disclose the subcontractors they intend to use on a project.
4 The intent of this requirement is to deter bid shopping — the
5 practice of low—bidding general contractors unethically
6 extracting lower prices from subcontractors under the threat of
7 replacement. Although stakeholders agree that the disclosure
8 requirement accomplishes this goal, the legislature notes that
9 the federal government and a vast majority of states do not have
10 a similar disclosure requirement in their procurement processes.
11 The legislature further finds that this disclosure
12 requirement has the unintended consequence of increasing the
13 number and complexity of construction protests. The state
14 procurement office’s review of Hawaii procurement laws found
15 that most protests allege technical issues stemming from the
16 subcontractor listing requirement. These technical mistakes
17 include instances where a bidder failed to list a required
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1 subcontractor or when a listed subcontractor did not possess the
2 appropriate license andwas not qualified to perform the work.
3 Recommendation 111-2 of the state procurement office’s
4 review of Hawaii procurement laws eliminates the requirement for
5 bidders to disclose the nature and scope of work expected to be
6 performed by a subcontractor. However, the legislature further
7 finds that this issue with the subcontractor listing may be
8 addressed instead by providing prime contractors with additional
9 time to correct immaterial or technical issues with
10 subcontractor listings.
11 Inadvertent errors can occur due to the complexity of the
12 laws regarding contractor licenses under chapter 444, Hawaii
13 Revised Statutes; title 16, Hawaii Administrative Rules; and the
14 judicial, quasi—judicial, and agency interpretations of these
15 laws and rules. Time constraints from when a bidder receives
16 the bids from all of its subcontractors up until the procuring
17 agency’s bid submission deadline may also cause inadvertent
18 failures to list a required subcontractor or the listing of
19 erroneous subcontractor license numbers in a bid. The
20 legislature further recognizes that the provision of additional
21 time for prime contractors to correct their subcontractor
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1 listings would facilitate the legislature’s intent of ensuring
2 that subcontractors are listed properly on the bid submittal and
3 are licensed, while maintaining the integrity of the bid
4 process.
5 The purpose of this Act is to minimize bid challenges,
6 costs, and delays of public works construction projects for five
7 years by:
8 (1) Allowing a bidder of a public works construction
9 project to clarify and correct immaterial or technical
10 issues with subcontractor listings for up to twenty—
11 four hours after the bid submission deadline, which
12 shall be complementary and in addition to the time
13 allowed by the procurement policy board to correct or
14 withdraw inadvertently erroneous bids;
15 (2) Requiring that bids for construction be publicly
16 opened no sooner than twenty-four hours after the bid
17 submission deadline; and
18 (3) Defining “immaterial or technical information”.
19 SECTION 2. Section 103D-302, Hawaii Revised Statutes, is
20 amended to read as follows:
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1 “~1O3D-3O2 Competitive sealed bidding. (a) Contracts
2 shall be awarded by competitive sealed bidding except as
3 otherwise provided in section 103D-301. Awards of contracts by
4 competitive sealed bidding may be made after single or multi-
5 step bidd±ng. Competitive sealed bidding does not include
6 negotiations with bidders after the receipt and opening of bids.
7 Award is based on the criteria set forth in the invitation for
8 bids.
9 (b) An invitation for bids shall be issued, and shall
10 include a purchase description and all contractual terms and
11 conditions applicable to the procurement. If the invitation for
12 bids is for construction, it shall [zpccify]:
13 (1) Specify that all bids include the name of each person
14 or firm to be engaged by the bidder as a joint
15 contractor or subcontractor in the performance of the
16 contract and the nature and scope of the work to be
17 performed by each[--]; and
18 (2) Allow the bidder to clarify or correct immaterial or
19 technical information required by paragraph (1) for up
20 to twenty-four hours after the bid submission
21 deadline; provided that any additions or substitutions
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1 of listed joint subcontractors shall be prohibited,
2 including changes to the nature and scope of work as
3 listed; provided further