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20101015 Russ Saito The Procurement Code and How It Serves State and County Agencies.ppt

Published Apr 10, 2013 in Education
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20101015 Russ Saito The Procurement Code and How It Serves State and County Agencies.ppt... Read more

Russ K. Saito presenting at the 2010 Hawaii Procurement Institute Annual Conference.

Hale Koa Hotel
October 15, 2010

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Presentation Slides & Transcript

Presentation Slides & Transcript

The Procurement Code And How It Serves State And County Agencies
HPI Annual Legislative Update Conference
October 15, 2010
Russ K. Saito
State Comptroller/Procuring Officer

Purpose of the State Procurement Code
Ensure open and fair competition for contractors to provide goods, services, and construction to State and County Agencies

Concerns/Areas for Improvement of the State Procurement Code
Contractors’ View
State and County Government View
Takes too long

Perception Verses Reality
Fairness Verses Length of Time
Contractors see protests as a means to ensure fairness
State and County agencies see protests as the reason procurement takes so long
Not just actual protests but the fear of protests and the preventive measures that must be incorporated in procurement solicitation and contract documents

How Does the Procurement Code Fit Into the Process for CIP Projects?

CIP Project Milestones

Building Permit Process
Planning & Permitting
Building Div
Building Code
Electric Code
Mechanical Code
Site Development Div
Civil Engineering
Wastewater Branch
Traffic Review Branch
Board of Water Supply
Fire Department
Clean Air Branch
Clean Water Branch
State Projects
Labor & Industrial Relations
Boiler & Elevator Review
Hawaiian Electric
Hawaiian Telcom

What Percentage of Projects are Protested and Why?

DAGS Bid Protest Summary
What the numbers say
Most protests were denied
Most protests were based on the Okada Trucking decision, related, and licensing issues

►►Legislation, if pursued, should focus on educating contractors and agencies

Recent Legislation With Impact on The Procurement Process
Act 17, SLH 2009 Apprenticeship Preference
Act 68, SLH 2010 80% Local Worker Requirement

Act 17 SLH 2009
[§103-55.6]  Public works construction; apprenticeship agreement.  (a)  A governmental body, as defined in section 103D-104, that enters into a public works contract under this chapter having an estimated value of not less than $250,000, shall decrease the bid amount of a bidder by five per cent if the bidder is a party to an apprenticeship agreement registered with the department of labor and industrial relations for each apprenticeable trade the bidder will employ to construct the public works, and in conformance with chapter 372.

Act 17 Solicitation Procedures
Procuring Officer to determine if project value is expected to exceed $250,000
If so, solicitation to include apprentice preference provisions
Contractor may claim preference with DLIR certification form 1 signed by contractor and sponsor for each apprenticeable trade the contractor will employ on the project
Procuring officer to verify certification forms with DLIR

Act 17 Contract Award
If contractor certifies participation in applicable apprenticeship programs, the procuring officer shall apply the preference for evaluation purposes
If contractor qualifies for other preferences, all preferences shall be applied
Any claims challenging a contractor’s representation shall be submitted to the procuring officer who shall refer the challenge to DLIR for investigation and determination

Act 17 Contract Administration
For the duration of the contract, the contractor shall certify participation every month using DLIR form 2
A contractor who fails to submit a monthly certification shall be subject to sanctions
Withholding of payments until the required forms are submitted
Temporary of permanent cessation of work with no recourse to breach of contract claims by the contractor and the governmental body entitled to restitution for nonperformance or liquidated damages as appropriate
Proceedings to debar or suspend

Act 68 SLH 2010
§   -3  Requirements of contractor.  (a)  A contractor awarded any contract shall ensure that Hawaii residents compose not less than eighty per cent of the workforce employed to perform the contract on a particular construction project, as determined under subsection (b).
     (b)  The eighty per cent requirement under subsection (a) shall be determined by dividing the total number of hours worked on a contract by residents, by the total number of hours worked by all employees of the contractor in the performance of the contract.  Hours worked for any subcontractor of the contractor shall count towards the calculation for purposes of this subsection.

Act 68 Compliance Requirements
Certification of compliance must be monthly by contractor
Hours worked by subcontractors shall count towards the calculation
Hours worked by employees within shortage trades as determined by DLIR shall not be included in the calculation
A contractor who fails to comply shall be subject to sanctions
Temporary suspension of work
Witholding of payment
Permanent disqualification
Recovery by government of moneys expended on the contract

Implementation of Acts 17 & 68
Act 17, SLH 2009:
Comptroller’s Memorandum 2010-29, to be followed by HAR
Act 68, SLH 2010 80% Local Worker Requirement:
Comptroller’s Memorandum to be issued, HAR to be determined

Caveat: These laws create potential for more protests; there have been 5 protests related to Act 17 since May of this year.

To Sum It Up
The procurement code works pretty good
The procurement code is not necessarily the main cause of delays and long processing times for CIP projects.
The code has features that are not being used
Education to promote more effective use of the code may have better payoff than additions to the code

A Plug For the State’s CIP Tracking System

Click on the island
where you wish to
search for projects
Statewide Capital Improvement Projects