A bill before state legislators would allow state and county officials to consider a contractor’s past performance when a new project is up for bid.
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.
Johansen was unavailable for comment Monday, but the bill passed through the House Finance Committee unamended with unanimous support.
Mayor Billy Kenoi said he would be tracking the measure as it continued through the Legislature.
“If a contractor has cost taxpayers money and time, then its lack of performance should have some bearing on its ability to get contracts in the future,” Kenoi said.
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.
“It makes for better government,” he added.
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.
“You’re considering all kinds of criteria other than price,” Crawford said.
She said she agreed with the state Procurement Office’s testimony, which laid out several ways in which the procurement code allows for past work to be incorporated into bid information. The General Contractors Association of Hawaii also opposed the bill.
Labor management consortium Pacific Resource Partnership testified in favor of the measure.
“PRP, in its capacity as construction industry ‘watch dogs,’ has monitored multiple private, as well as public works projects over the recent years,” Ryan Kobayashi wrote in his testimony for Monday’s hearing. “We feel that is a great ‘first step’; the ‘weeding out’ of unqualified contractors helps to ensure the probability that the right contractor is chosen for public works contracts, but legislation such as this only makes it less likely that the wrong contractor is chosen.”