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Thursday, February 28, 2013

Hawaii proposes legislation to consider past performance of bidder

This is the link to the article that is the subject of this post, followed by excerpts. As usual, read the whole article to learn more: Bill to Change Building Code Moves Ahead
HB 1374, introduced by House Finance Committee Vice Chairman Aaron Ling Johansen, R-Moanalua, would add a mechanism to the procurement code to consider whether a company previously completed projects that had significant delays or cost overruns.

“The usual principle of awarding contracts to the lowest bidder may lead to substandard work, because contractors may artificially lower bids to gain a contract, in spite of a lack of qualifications or worse a record of poor performance in the past,” the bill’s introductory language said.

the bill passed through the House Finance Committee unamended with unanimous support.

State procurement code is relatively strict in dictating which factors government officials may or may not consider when it comes to awarding contracts, Corporation Counsel Lincoln Ashida said.

Finance Director Nancy Crawford disagreed that the procurement code prohibits government officials from looking at a company’s past performance, though. She said the county can issue a request for proposals and write broad criteria to include quality measures that the contracting company must meet.

This is interesting to me because, as with Guam, Hawaii is generally speaking a Model Procurement Code state, based on the ABA MPC. The Model Procurement Code requires bids to be issued to the lowest responsive -- and responsible -- bidder. Hawaii deviated in details but not principle from the MPC. The MPC allows responsibility to be determined after bids are opened by before the award is made final, and it cannot be given to a bidder determined not to meet the standards of responsibility.

I am not at all conversant with Hawaii procurement law, but I do note it has this code section, from which I extract this excerpt:
§103D-310 Responsibility of offerors. (a) Unless the policy board, by rules, specifies otherwise, before submitting an offer, a prospective offeror, not less than ten calendar days prior to the day designated for opening offers, shall give written notice of the intention to submit an offer to the procurement officer responsible for that particular procurement.

(b) Whether or not an intention to bid is required, the procurement officer shall determine whether the prospective offeror has the financial ability, resources, skills, capability, and business integrity necessary to perform the work.
Guam follows more closely the ABA MPC. It has also pretty much adopted in original form the MPC regulations. Guam's version already requires that past performance be considered before a bidder passes the standards of responsibility test, not before it even bids. Its regulation is, in excerpted part, as follows:
2 GAR §3116. Responsibility of Bidders and Offerors.
(b)(2) Standards of Responsibility.
  (A). Standards. Factors to be considered in determining whether the standard of responsibility has been met include whether a prospective contractor has:
    (ii) a satisfactory record of performance;
  (B) Information Pertaining to Responsibility. The prospective contractor shall supply information requested by the Procurement Officer concerning the responsibility of such contractor. If such contractor fails to supply the requested information, the Procurement Officer shall base the determination of responsibility upon any available information or may find the prospective contractor nonresponsible if such failure is unreasonable.

 (4) Duty Concerning Responsibility. Before awarding a contract, the Procurement Officer must be satisfied that the prospective contractor is responsible.
I'm reminded of the lament of the authors of the ABA MPC, found in one of the comments to the code that does not immediately come to my mind, to the effect that problems with the implementation of the code is often the result of local tinkering.

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