New rule could cost contractors state jobs

By Mike Gordon
Advertiser Staff Writer

Contractors could be barred from receiving state contracts under a new rule approved this week by the state Procurement Policy Board.

The change requires debarment proceedings for a contractor who is either fined $5,000 for violating campaign spending laws or convicted by the prosecutor or the attorney general, said state comptroller Russ Saito.

The board voted 4-0 Wednesday to approve the rule. Public hearings must still be held and are likely to be scheduled sometime in November, Saito said.

The rule will not be applied retroactively, something that had concerned critics of the change, he said. Also, debarment would not be automatic, Saito said.

A "quasi-judicial hearing" would be held to give the contractor a chance to explain if there were extenuating circumstances.

"There is still due process," he said.

The new rule should help contractors avoid problems in the first place, he said.

"I think we are actually doing them a favor," Saito said. "This helps them. If anyone approaches them to give more or to give through others, the rule says that if you do this and you get caught, we will start debarment proceedings."

Robert Watada, executive director of the state Campaign Spending Commission, said the rule contributes to furthering trust in government — that government agencies will not sign contracts with those who break the law.

"For the public, that gives them a sense of reassurance that the government is going to hold high, ethical standards," Watada said.

That's important to the public, which has seen these problems occur across the country and in Hawai'i, he said.

"I think the public has seen ethical lapses as well as legal lapses," he said. "I think the message is an ethical message."

Reach Mike Gordon at mgordon@honoluluadvertiser.com or 525-8012.