Law said to reform contract process
By Gordon Y.K. Pang
Advertiser Capitol Bureau
A law designed to "make state contracting more transparent, merit-based and accountable" was signed yesterday. Under the procurement law, those seeking a state or county professional services contract will be ranked by an independent committee of professionals that will make its decisions based on published criteria.
A procurement official would then negotiate the cost of the contract with the providers in the order set by the committee. Those not chosen can ask for the reason behind the decision.
The law was signed yesterday by Gov. Linda Lingle and goes into effect July 1.
The changes come in the wake of investigations by Honolulu prosecutors and the state Campaign Spending Commission into the relationship between the awarding of government contracts and campaign contributions made by architects, engineers and building contractors. A number of contractors have been fined for making contributions in excess of allowable limits. Several pleaded no contest after agreeing to cooperate with prosecutors.
"One key result of this omnibus procurement act is that it puts to rest the appearance of impropriety relative to nonbid contracts," Lingle said. "From now on, no appointed official can individually select any contractor. Instead, impartial, independent committees of professionals will make selections based on relevant, written selection criteria.
"Political contributions will have no bearing on the procurement process. The term nonbid contract will become irrelevant."
The governor said the procurement bill takes the sting out of the Legislature's failure this year to pass meaningful campaign finance reform.
Lingle convened a task force of architects, engineers, contractors, legislators and procurement officers in January to discuss revamping the procurement process. Yesterday, more than 20 of them gathered in her office for the bill signing.
Stanley Kawaguchi, vice president and area manager for the international engineering firm of Parsons Brinckerhoff, Quade and Douglas, said he was tired of the "black eye" his industry had received by recent political scandals involving contractors. "In terms of how the public views us, it's been very, very negative," he said. "Whereas engineers, architects and design professionals have always been respected high up here, we dropped. And we have to do something. And, governor, this is the something. This is going to give us a start."
Kawaguchi, a 35-year veteran of the contractor industry, said the bill sends a clear message to both the public and government leaders: "Pick us because we're good, not because we contribute. Pick us because we know what we're doing."
Roy Yamashiro of Design Professions, Architects and Engineers of Hawai'i said the new law will bring "openness, transparency, confidence and integrity" to the procurement process, adding that his organizations and others have lobbied for years for revisions to the procurement code.
The new law would also require all contractors hired by the state to either be incorporated or organized in Hawai'i, or be required to create an in-state division that would comply with state employment laws.
Additionally, pre-bid conferences would be required at least 15 days before the submission of bids for all construction or design-build projects valued at a minimum of $500,000, and similar conferences would be held 15 days before the submission of nonbid proposals. Subcontractors and union officials representatives could also attend pre-bid conferences.
Another provision would set up a procurement institute for contractors and others under the auspices of the University of Hawai'i William S. Richardson School of Law.
Also signed into law was a bill that allows government agencies to buy goods, services and construction through state procurement cards.
Reach Gordon Y.K. Pang at gpang@honoluluadvertiser.com or at 525-8070.
