The state Office of Elections acted in bad faith when it awarded an expensive contract for new voting machines and the contract should be canceled after this year's elections, an administrative hearings officer has ruled.

Hart InterCivic was awarded what the state described as a $43.4 million contract for paper eScan and electronic eSlate voting machines through the 2016 elections, with an option to extend to 2018.

An administrative hearings officer, responding to a protest from Election Systems & Software — a rival company that bid $18.1 million for the contract — has found that the actual cost with the option was $52.8 million and "clearly unreasonable."

Craig Uyehara, an administrative hearings officer for the state Department of Commerce and Consumer Affairs, determined on Thursday that it was too late to cancel the Hart contract before the September primary and November general election but ruled that it should expire at the end of the year.

The state and Hart have 10 days to appeal the ruling in court.

The ruling was extremely critical of Kevin Cronin, the state's chief elections officer.

Cronin, a Wisconsin attorney who started his new job in February, had been briefed about the Hart contract and made the award shortly after taking over the elections office. He conducted a cost and price analysis after the ES&S protest that defended the contract as reasonable and described the competing bid from ES&S as insufficient.

The hearings officer, however, said Cronin — by his own admission — was unqualified to do the cost analysis and found that Cronin's conclusions were "incomplete, inaccurate, unreliable and misleading."

The hearings officer found that Cronin "attempted to manipulate both the data and the facts in order to justify the award" to Hart, and that he exhibited "reckless disregard" for state procurement laws.

Cronin could not be reached for comment yesterday. But according to the ruling, he told the hearings officer that he had the "misfortune to be the subject of a protest and appeal that takes advantage of an obscure statute that is not clear and equally obtuse rules."

The hearings officer countered that it was Cronin's failure to act in good faith in preparing the cost analysis and ensuring that state money was being spent properly that was the problem.

The hearings officer found that the Hart contract was higher than comparable contracts for similar voting machines in other states. ES&S had held the voting machine contract in Hawai'i before the Hart award and argued that the state has dealt with the firm in bad faith on multiple occasions since 2004.

FILED PROTEST EARLY

Terry Thomason, an attorney for ES&S, said the firm filed the protest in February so there would have been enough time to resolve the dispute before this year's elections if not for what he called the state's stalling. The state procurement officer decided in late June to go ahead with the Hart contract despite the protest so the elections office could prepare the new voting machines and train staff for this year's elections.

"We're happy with it," Thomason said of the hearings officer's ruling. "We believe the hearings officer accurately assessed the evidence."

Thomason said the ruling should not reflect on Hart but on state elections officials who were so enamored with the Hart voting machines that they discounted the ES&S bid. He said the ES&S bid had a solid price with the promise to upgrade the technology over the life of the contract.

An attorney representing Hart could not be reached for comment yesterday.

William Marston, the chairman of the state Elections Commission, said if the ruling stands it would likely mean the state would have to request new bids for voting machines for the 2010 elections and beyond. He said a selection panel had evaluated the competing bids and that Cronin was basically left to defend the work of the panel and the elections staff.

"There's no hidden agenda. There really isn't," he said. "There was nothing more than an effort, in my mind, to try to select the best system."

Marston said, as Cronin has before, that cost alone was not the determining factor in selecting the voting machines.

"I have to be honest with you, the price differential looks shocking, but who knows who was hiding stuff?" he said, adding, as a caution, that he was not involved in the selection.

CALLS FOR FIRING

The Elections Commission stood behind Cronin after he was criticized by Gov. Linda Lingle, the major political parties and others for his handling of last-minute candidate filings last month. The political parties were also upset that Cronin sent primary ballots to the printer before they could be reviewed by the parties for mistakes.

The blistering ruling on the Hart contract provides new fodder for those who want Cronin replaced.

State Sen. Sam Slom, R-8th (Kahala, Hawai'i Kai), had said last month that the Elections Commission should fire Cronin.

"They better do the right thing right now; get rid of him at this time, get somebody that is competent to make the right decisions. Otherwise, we're going to continue to suffer and the elections process is still in doubt," Slom said yesterday.

Bart Dame, a progressive activist who has monitored elections for the Democratic Party of Hawai'i, had questioned the state's evaluation process and the Hart selection.

"I think we have to reopen the whole procurement process and this time conduct it in the open, with public scrutiny, with the involvement of political parties looking over the shoulders of the staff, and with the more active involvement of the Elections Commission itself," he said.

Five Maui residents, meanwhile, have sued Cronin and the elections office for failing to adopt administrative rules for using the Hart machines to transmit votes from the Neighbor Islands over telephone lines.

The residents, who want the Neighbor Island results flown to Honolulu on election night, argue that the transmissions could be hacked and votes could be flipped without the public knowing. The lawsuit is before a Circuit Court judge on Maui.