⁽¹⁾Historical Note: (a) This chapter 124, subtitle 11 of title 3, Hawaii … Continue reading

HAWAII ADMINISTRATIVE RULES
TITLE 3
DEPARTMENT OF ACCOUNTING AND GENERAL SERVICES
SUBTITLE 11
PROCUREMENT POLICY BOARD
CHAPTER 124
PREFERENCES

 

 

SUBCHAPTER 1
HAWAII PRODUCTS

§3-124-1 Purpose.

The purpose of this subchapter is to provide procedures for qualifying and registering products on the Hawaii products list and for applying preferences to those products. The objective is to promote the use of Hawaii products, as defined in section 103D-1001, HRS, by state purchasing agencies.

[Eff 12/15/95; comp 11/17/97; am and comp 11/25/02; am and comp 5/20/04; am MAY 07 2012 ] (Auth: HRS §103D-202) (Imp: HRS §103D-1002)

§3-124-1.01 Applicabilitv.

(a) These rules shall apply to all solicitations made pursuant to sections 103D-302 and 103D-303, HRS, issued by a procurement officer when a registered and qualified Hawaii product is available.
(b) These rules shall not apply whenever the application will disqualify any government agency from receiving federal funds or aid.

[Eff and comp 11/17/97; comp 11/25/02; am and comp 5/20/04; am MAY 07 2012 ] (Auth: HRS §103D-202) (Imp: HRS §103D-1002)

§3-124-2 Definitions.

Definitions are in section 103D-1001, HRS. The following definitions also apply to this chapter:
“Hawaii products list” means the list compiled by the administrator of products approved as Hawaii products, the names and addresses of the manufacturers, the classes and preference percentages the products will be allocated to meet the requirements for which offers are solicited.
“Non-Hawaii product” means a product that is not registered or qualified as a Hawaii product.
“Registered Hawaii product” means a Hawaii product approved by the administrator as a Hawaii product and included on the Hawaii product list
“Qualified Hawaii product” means a product that has been reviewed, qualified, and approved by the procurement officer of a specific solicitation.

[Eff 12/15/95; comp 11/17/97; am and comp 11/25/02; am and comp 5/20/04; am MAY 07 2012 ] (Auth: HRS §103D-202) (Imp: HRS §103D-1002)

§3-124-3 Qualification procedure.

(a) A Hawaii product requires over fifty per cent Hawaii input towards the total cost of the product for:

• (1) Class I products mined, excavated, produced, manufactured, in the State; or
• (2) Class II products are agricultural, aquacultural, horticultural, silvicultural, floricultural, or livestock product raised, grown, or harvested in the State.

(b) The responsibility for obtaining qualification shall rest upon the person desiring the preference by submitting an application either to the administrator or to the procurement officer of a specific solicitation. Any person desiring a preference pursuant to this subchapter, shall have the product(s) qualified and registered on the Hawaii products list as follows:

• (1) An application for Hawaii product preference may be submitted to the procurement officer at the time a solicitation is issued, provided the product meets the solicitation requirements or any other criteria, prior to the due date specified in the solicitation. An addendum, if applicable, shall be issued to notify potential offerors of a qualified Hawaii product for the solicitation which the approval was requested; or
• (2) Persons desiring to qualify their product(s) by registering with the state procurement office shall complete the application and file with the administrator.

(c) Financial information submitted for the purpose of determining classification of a product shall be treated as confidential. In accordance with chapter 92F, HRS, the administrator or the procurement officer shall properly safeguard the information and shall not make it available to the public.
(d) Each product shall be specified clearly and not by broad category of product.
(e) Cost data for each product shall reflect the product’s actual total production cost per unit.
(f) Upon completion of the review as whether a product is a qualified Hawaii product, if the procurement officer finds that a product has qualified as a Hawaii product, the procurement officer shall notify the approved applicant in writing of the qualified Hawaii product(s), and submit the approved application to the state procurement office within five working days of the approved date. Within five working days of receiving the approved application from the procurement officer, the administrator shall list the qualified Hawaii product on the Hawaii products list as a registered Hawaii product with its effective date, unless upon further review by the administrator the product is determined not qualified. Applicants whose products do not qualify as a Hawaii product for a solicitation or for the Hawaii products list shall be notified in writing of the decision and the reasons.
(g) Non-approved applicants may appeal the decision of the administrator or the procurement officer:

• (1) The applicant shall file a written request for reexamination of facts to the administrator within five working days of the notification date. The administrator shall respond to the applicant within thirty days and shall have the sole discretion in determining qualification for the preference; or
• (2) The applicant shall file a written request for reexamination of facts to the procurement officer for a specific solicitation within five working days of the notification date. The procurement officer shall respond to the applicant within five working days and shall have the sole discretion in determining the preference qualification.

(h) Should the administrator receive a request challenging the validity of the qualification, classification, or reexamination of a Hawaii product, the administrator may request an audit of the information provided should the need arise to determine if the product is qualified as defined under Hawaii product in section 103F-1002, HRS. A request for audit shall be sent to the person having requested registration of the product on the Hawaii products list, and the person shall bear the cost of the audit. The administrator or procurement officer may also request any additional information determined necessary in order to qualify or determine proper classification.
(i) Should the procurement officer receive a request to challenge the validity of the qualification, classification, or reexamination of a Hawaii product, the request shall be received not later than five working days after the issuance of the written notification, and shall contain a specific statement of the factual grounds upon which reversal is sought. The determination required by this section shall be final and conclusive unless clearly erroneous, arbitrary, capricious, or contrary to law.
(j) Application, renewal, and other forms required shall be provided by the administrator.

[Eff 12/15/95; comp 11/17/97; am and comp 11/25/02; am and comp 5/20/04; am MAY 07 2012 ] (Auth: HRS §103D-202) (Imp: HRS §§92F-14, 103D-1002)

§3-124-4 Solicitation procedure.

(a) Solicitations to which this preference is applicable shall refer to this subchapter and shall also contain a notice where the Hawaii products list is available.
(b) To be eligible for preference, a product shall be qualified and registered on the Hawaii products list.

• (1) A Hawaii product approved by the state procurement office shall have an effective date of one month after the product has been approved.
• (2) The procurement officer shall specify in the public notice and solicitation the application due date and instructions for submittal. The due date shall be at least five working days after the public notice release date for bids pursuant to section 103F-302, HRS, and at least ten working days after the public notice release date for proposals pursuant to section 103F-303, HRS. The procurement officer shall issue addenda of new qualified Hawaii product(s).

(c) To be listed in a solicitation, the effective date when a product was qualified and registered on the Hawaii products list shall be no later than the date a solicitation is first publicly advertised.
(d) Prospective offerors shall be informed of the registered Hawaii product and its established class that meets the requirements for which offers are being solicited.

• (1) When more than one registered Hawaii product meeting minimum requirements is available, a schedule describing all registered Hawaii products and their established classes shall be included in the solicitation.
• (2) The procurement officer shall provide in the solicitation appropriate space(s) for offerors to indicate selection of the Hawaii products preference and to list the Hawaii product and its price f.o.b. jobsite, unloaded, including applicable general excise tax and use tax.

[Eff 12/15/95; am and comp 11/17/97; am and comp 11/25/02; comp 5/20/04; am MAY 07 2012 ] (Auth: HRS §103D-202) (Imp: HRS §103D-1002)

§3-124-5 Evaluation procedure and contract award.

(a) An application submitted with the offer shall be accepted by the procurement officer for determination review as prescribed in section 3-124-3.
(b) For evaluation purposes, no preference shall be considered when only registered Hawaii products are offered.
(c) Where offers include both registered Hawaii products and non-Hawaii products, for the purpose of determining the lowest evaluated offer, the offer for the Hawaii product shall be decreased by its applicable ten per cent or fifteen per cent classification preference.
(d) The contract amount shall be the amount of the price offered, exclusive of any preference.
(e) Should more than one preference allowed by statute apply, the evaluated price shall be based on application of applicable preferences in the order specified below. The preferences (1) through (7) in this subsection shall be applied to the original prices. The sum of the preferences, where applicable, shall be added to the original price, except that preferences (1) and (4) shall be subtracted from the Hawaii products or recycled products price.

• (1) Hawaii products list, pursuant to section 103D-1002, HRS;
• (2) Tax adjustment for tax exempt offerors, pursuant to section 103D-1008, HRS;
• (3) Preferred use of Hawaii software development businesses, pursuant to section 103D-1006,HRS;
• (4) Recycled products, pursuant to section 103D-1005, HRS;
• (5) Reciprocal preference, pursuant to section 103D-1004, HRS;
• (6) Printing, binding, and stationery work within the State, pursuant to section 103D-1003, HRS;
• (7) Preference for persons with disabilities, pursuant to section 103D-1009, HRS.

(f) Should the price comparison for bids submitted pursuant to section lO3D-302, HRS, after taking into consideration all applicable preferences, result in identical total prices, award shall be made to the offeror offering a registered Hawaii product in preference to a non-Hawaii product.
(g) For proposals submitted pursuant to section 103D-303, HRS, and after taking into consideration all applicable preferences, the procurement officer shall award the contract pursuant to section 3-122-57.

[Eff 12/15/95; am and comp 11/17/97; am and comp 11/25/02; am and comp 5/20/04; am May 07 2012] (Auth: HRS §103D-202) (Imp: HRS §103D-1002)

§3-124-6 Change in class status.

(a) A person whose product is on the Hawaii products list shall be responsible for informing the administrator of:

• (1) A change to the method of production or the relative values of the Hawaii and non-Hawaii inputs to the production cost of the product(s), which could affect the product(s) classification;
• (2) The discontinuation of product; or
• (3) Any change affecting the classification or qualification of the product.

(b) Any changes affecting either the method of production or the relative values of the Hawaii and non-Hawaii inputs to the production cost of the product(s), which could affect the product(s) classification, a new application shall be submitted to the administrator within five working days of the change. The administrator shall make a determination within fifteen working days of submittal of new application of product classification.
(c)Any change on a product application submitted as part of an offer that materially alters the offeror’s ability to supply the Hawaii product:

• (1) The offeror shall notify the procurement officer of the change no later than five working days from when the offeror knows of the change by submitting a letter to the procurement officer, explaining why the Hawaii product is not available, the estimated date it will be available, and if applicable, attach a confirmation letter from the manufacturer or producer of the Hawaii product.
• (2) The procurement officer shall notify the administrator within five working days of the receipt of the offeror’s letter indicating the discontinuation of the Hawaii product or its availability. Upon receipt of the offeror’s letter, the administrator shall review the letter and update the Hawaii product list accordingly.

[Eff 12/15/95; comp 11/17/97; comp 11/25/02; comp 5/20/04; am May 07 2012] (Auth: HRS §103D-202) (Imp: HRS §103D-1002)

§3-124-7 REPEALED. [R May/07/2012]

§3-124-8 Termination.

If change of status is not reported as required in section 3-124-6, the administrator shall terminate the registration of the product. Any person terminated that desires to be reinstated on the Hawaii products list shall submit a new application.

[Eff 12/15/95; comp 11/17/97; comp 11/25/02; comp 5/20/04; May 07 2012](Auth: HRS. §103D-202) (Imp: HRS §103D-1002)

§3-124-9 (Reserved).

SUBCHAPTER 2
PRINTING, BINDING, AND STATIONERY WORK

§3-124-10 Purpose.

The purpose of this subchapter is to provide procedures for the application of the preference for printing, binding, and stationery work, including all preparatory work, presswork, bindery work, and any other production-related work, performed within the State. The objective is to promote the use of businesses performing the work in Hawaii by state purchasing agencies.

[Eff 12/15/95; comp 11/17/97; am and comp 11/25/02; am and comp MAY 20 2004 ] (Auth: HRS §103D-202) (Imp: HRS §103D-1003)

§3-124-11 Applicability.

(a) All bids submitted pursuant to section 103D-302, HRS, for a printing, binding, or stationery contract in which all work will be performed in-state, including all preparatory work, presswork, bindery work, and any other production related work, to include storage and shipping costs, shall receive a fifteen per cent preference for the purposes of bid evaluation.
(b) These rules shall not apply whenever the application will disqualify any government agency from receiving federal funds or aid.

[Eff 12/15/95; am and comp 11/17/97; am and comp 11/25/02; comp MAY 20 2004 ] (Auth: HRS §103D-202) (Imp: HRS §103D-1003)

§3-124-12 Evaluation procedure and contract award.

(a) If the in-state price is low, award shall be made to the bidder offering to perform the work in Hawaii.
(b) If an out-of-state price is low, the following applies in determining the lowest evaluated price:

• (1) The amount bid for work performed out-of state shall be increased by fifteen per cent.
• (2) The lowest total bid, taking the preference into consideration, shall be awarded the contract unless the solicitation provides for additional award criteria.

(c) The contract amount shall be the price offered, exclusive of any preferences.
(d) Should more than one preference allowed by statute apply, the evaluated price shall be based on application of applicable preferences in the order specified below. The preferences (1) through (7) in this subsection shall be applied to the original prices. The sum of the preferences, where applicable, shall be added to the original price, except that preferences (1) and (4) shall be subtracted from the Hawaii products or recycled products price.

• (1) Hawaii products list, pursuant to section 103D-1002, HRS;
• (2) Tax adjustment for tax exempt offerors, pursuant to section 103D-1008, HRS;
• (3) Preferred use of Hawaii software development businesses, pursuant to section 103D-1006, HRS;
• (4) Recycled products, pursuant to section 103D-1005, HRS;
• (5) Reciprocal preference, pursuant to section 103D-1004, HRS;
• (6) Printing, binding, and stationery work within the State, pursuant to section 103D-1003, HRS;
• (7) Preference for persons with disabilities, pursuant to section 103D-1009, HRS.

(e) Should the price comparison for bids submitted pursuant to section 103D-302, HRS, after taking into consideration all applicable preferences, result in identical total prices, award shall be made pursuant to section 3-122-34.

[Eff 12/15/95; am and comp r~t~1 7/97; am and comp 11/25/02; am and comp MAY 20 2004] (Auth: HRS §103D-202) Imp: HRS §103D-1003)

§3-124-13 REPEALED. [R 11/17/97]

§3-124-14 (Reserved)

SUBCHAPTER 3
RECIPROCAL

§3-124-15 Purpose.

The purpose of this subchapter is to provide procedures for the application of the reciprocal preference. The objective is to ensure fair and open competition for Hawaii businesses engaged in contracting with the State.

[Eff 12/15/95; comp 11/17/97; am and comp 11/25/02; am and comp MAY 20 2004] (Auth: HRS §§103D-202, 103D-1004) (Imp: HRS §103D-1004)

§3-124-16 Definitions.

As used in these rules:
“Out-of-state bidder” means any person, agency, corporation, or other business entity whose principal place of business or ancillary headquarters is not located in the State or is not registered with the state department of commerce and consumer affairs to do business in the State.

[Eff 12/15/95; am and comp 11/17/97; comp 11/25/02; comp MAY 20 2004] (Auth: HRS §§103D-202, 103D-1004) (Imp: HRS §103D-1004)

§3-124-17 Applicability.

(a) The chief procurement officer may impose a reciprocal preference against bidders from states which apply preferences.
(b) When applied to solicitations made pursuant to section 103D-302, HRS, a resident bidder of the State of Hawaii may be given a reciprocal preference equal to the preference the out-of-state bidder would be given in their own state. If the out-of-state bidder’s state has a preference comparable to a Hawaii preference, the reciprocal preference shall be equal to the amount the out-of-state preference exceeds the Hawaii preference.
(c) At least annually, the administrator of the state procurement office shall make available a list of preference laws of all states to the chief procurement officers.
(d) These rules shall not apply to any transaction if the provisions of these rules conflict with any federal laws.

[Eff 12/15/95; am and comp 11/17/97; am and comp 11/25/02; comp MAY 20 2004] (Auth: HRS §§103D-202, 103D-1004) (Imp: HRS §103D-1004)

§3-124-18 Evaluation procedure and contract award.

(a) When applied, the amount of the reciprocal preference as specified in section 3-124-17 shall be added for evaluation purposes to the out-of-state bidder’s price.
(b) Pursuant to section 103D-302, HRS, the responsible and responsive bidder submitting the lowest evaluated bid, taking into consideration all applicable preferences, shall be awarded the contract.
(c) The contract amount shall be the price bid, exclusive of preference.
(d) Should more than one preference allowed by statute apply, the evaluated price shall be based on application of applicable preferences in the order. specified below. The preferences (1) through (7) in this subsection shall be applied to the original prices. The sum of the preferences, where applicable, shall be added to the original price, except that preferences (1) and (4) shall be subtracted from the Hawaii products or recycled products price.

• (1) Hawaii products list, pursuant to section 103D-1002, HRS;
• (2) Tax adjustment for tax exempt offerors, pursuant to section 103D-1008, HRS;
• (3) Preferred use of Hawaii software development businesses, pursuant to section 103D-1006, HRS;
• (4) Recycled products, pursuant to section 103D-1005, HRS;
• (5) Reciprocal preference, pursuant to section 103D-1004, HRS;
• (6) Printing, binding, and stationery work within the State, pursuant to section 103D-1003, HRS;
• (7) Preference for persons with disabilities, pursuant to section 103D-1009, HRS.

(e) Should the price comparison for bids submitted pursuant to section 103D-302, HRS, after taking into consideration all applicable preferences,
result in identical total prices, award shall be made pursuant to section 3-122-34.

[Eff 12/15/95; am and comp 11/17/97; am and comp 11/25/02; am and comp MAY 20 2004 ] (Auth: HRS §§103D-202, 103D-1004) (Imp: HRS §103D-1004)

§3-124-19 (Reserved).

SUBCHAPTER 4
RECYCLED PRODUCTS

§3-124-20 Purpose.

The purpose of this subchapter is to establish percentages of preference, the method of determining the recycled content to qualify various products for preference, and the application of the preference. The objective is to promote the use of recycled products by state and county public purchasing agencies.

[Eff 12/15/95; comp 11/17/97; am and comp 11/25/02; am and comp MAY 20 2004 ] (Auth: HRS §§103D-202, 103D-1005) (Imp: HRS §§103D-1005, 342G-42)

§3-124-21 Definitions.

Definitions are in section 103D-1001, HRS. The following definitions apply to this chapter:
“End use” mei3.nS the purpose for which an item has been manufactured.
“Post-consumer recovered material” means any product used by a consumer, including a business that purchases the material, that has served its intended end use, and that has been separated or diverted from the solid waste stream for the purpose of use, reuse, or recycling.
“Recovered material” means material that has been separated, diverted, or removed from the solid waste stream after a manufacturing process for the purpose of use, reuse, or recycling. This term does not include those materials that are generated and normally reused on-site for manufacturing processes (such as mill broke, in the case of paper products).
“Recycled content” means the percentage of a product composed of recovered material, or postconsumer recovered material, or both.
“Recycled product” means a product containing recovered material, or post-consumer recovered material, or both.
“Solid waste stream” means discarded material moving from the point of discard to ultimate disposition.

[Eff 12/15/95; am and comp 11/17/97; am and comp 11/25/02; am and comp MAY 20 2004 ] (Auth: HRS §§103D-202, 103D-1005) (Imp: HRS §§103D-1005, 206M-31)

§3-124-22 Applicability.

(a) These rules shall apply to all solicitations issued pursuant to section 103D-302, HRS, by a purchasing agency when it is required.or so stated in the solicitation.
(b) These rules shall not apply whenever the application will disqualify any government agency from receiving federal funds or aid.

[Eff 12/15/95; am and comp 11/17/97; am and comp 11/25/02; comp MAY 20 2004 ] (Auth: HRS §§103D-202, 103D-1005) (Imp: HRS §§103D- 1005, 342G-42)

§3-124-23 Qualification procedure.

(a) The solicitation shall contain the per cent of recycled content required to qualify various products for a preference. Any person desiring a preference pursuant to section 103D-1005, HRS, shall certify the recycled content of the product when submitting a bid. The Certification of Recycled Content form issued by the administrator shall be completed and submitted as part of the bid.
(b) Bidders shall indicate on the certification form, included as part of the solicitation, the recycled content of the products offered. Recycled content shall be expressed as a percentage of total product weight.
(c) Bidders shall submit with the certification form sufficient information to support the stated recycled content of the products offered. For purposes of this section, sufficient information shall include, but not be limited to, manufacturer’s specifications, or manufacturer’s certification. The procurement officer calling for bids may request additional information deemed necessary in order to qualify a product. The procurement officer calling for bids shall have sole discretion in determining acceptance of a product.
(d) Any bidder whose product is not accepted for application of preference may appeal by filing a written request for re-examination of facts to the procurement officer calling for bids.

[Eff 12/15/95; am and comp 11/17/97; am and comp 11/25/02; comp MAY 20 2004 ] (Auth: HRS §§103D-202, 103D-1005) (Imp: HRS §§103D-1005, 342G-42)

§3-124-24 Bidding procedure.

(a) Solicitations issued by a purchasing agency pursuant to section 103D-302, HRS, and consistent with section 3-122-21, shall contain a notice stating that a price preference will be given to recycled products. The solicitation shall contain the percent of recycled content required to qualify various products for a price preference. The price preference will be at least five per cent of the price of the item, and will be used for price evaluation.
(b) All purchasing agencies issuing bids shall provide an appropriate space for bidders to indicate use of recycled products and to list the prices of the recycled products.
(c) When a purchase specifies only recycled products or when only recycled products are bid, the price preference shall not apply.
(d) Bidders requesting a preference shall submit a completed certification form, as required by section 3-124-23, with each bid. Previous certifications shall not apply unless allowed by the bid.

[Eff 12/15/95; am and comp 11/17/97; am and comp 11/25/02; am and comp MAY 20 2004 ] (Auth: HRS §§103D-202, 103D-1005)(Imp: HRS §§103D-1005, 342G-42)

§3-124-25 Evaluation procedure and contract award.

(a) When bids received contain both recycled products and non-recycled products, for the purpose of determining the lowest evaluated bid, the original price for the recycled product item shall be decreased by the percentage specified in the solicitation.
(b) Should more than one preference allowed by statute apply, the evaluated price shall be based on application of applicable preferences in the order specified below. The preferences (1) through (7) in this subsection shall be applied to the original prices. The sum of the preferences, where applicable, shall be added to the original price, except that preferences (1) and (4) shall be subtracted from the Hawaii products or recycled products price.

• (1) Hawaii products list, pursuant to section 103D-1002, HRS;
• (2) Tax adjustment for tax exempt offerors, pursuant to section 103D-1008, HRS;
• (3) Preferred use of Hawaii software development businesses, pursuant to section 103D-1006, HRS.,
• (4) Recycled products, pursuant to section 103D-1005, HRS;
• (5) Reciprocal preference, pursuant to section 103D-1004, HRS;
• (6) Printing, binding, and stationery work within the State, pursuant to section 103D-1003, HRS.,
• (7) Preference for persons with disabilities, pursuant to section 103D-1009, HRS.

(c) The responsible and responsive bidder submitting the lowest evaluated bid, taking into consideration all applicable preferences shall be awarded the contract.
(d) The contract amount shall be the original price bid, exclusive of any preference.
(e) Should the price comparison, after taking into consideration all applicable preferences, result in identical evaluated prices, award shall be made to the responsible and responsive bidder as follows:

• (1) To the bidder bidding the product with the higher post consumer recovered material content; or
• (2) To the bidder bidding the product with the higher recovered material content if.the products have identical post-consumer recovered material content.

(f) If the price comparison, after taking into consideration all applicable preferences, result in identical evaluated prices for products with identical recycled content, the procurement officer shall follow the requirements of section 3-122-34 for low tie bids.

[Eff 12/15/95; am and comp 11/17/97; am and comp 11/25/02; am and comp MAY 20 2004 ] (Auth: HRS §§103D-202, 103D-1005) (Imp: HRS §§103D-1005, 342G-42)

§3-124-26 Mandatory purchase of office paper and printed material with recycled content.

(a) State purchasing agencies shall and county purchasing agencies are urged to purchase only office paper and printed material with recycled content.
(b) Exceptions to this section require the written approval of the chief procurement officer and are permitted when statutory, regulatory, contractual, or agency requirements preclude the use or purchase of paper with recycled contents of the same type and quantity as virgin paper.
(c) When a solicitation calls for recycled product only, the preference stated in this subchapter shall not apply.

[Eff 12/15/95; am and comp 11/17/97; am and comp 11/25/02; comp MAY 20 2004] (Auth: HRS §§103D-202, 103D-1005) (Imp:. HRS §103D-1005)

§§3-124-27 to 3-124-29 (Reserved)

SUBCHAPTER 5
SOFTWARE DEVELOPMENT BUSINESSES

§3-124-30 Purpose.

The purpose of this subchapter is to establish a percentage of preference, the method to qualify various software development businesses for the preference, and application of the preference. The objective is to promote the use of Hawaii software development business by state purchasing agencies.

[Eff 12/15/95; comp 11/17/97; am and comp 11/25/02; am and comp MAY 20 2004] (Auth: HRS §§103D-202, 103D-1006) (Imp: HRS §103D-1006)

§3-124-31 Definitions.

Definitions are in section 103D-1001, HRS. The following definitions apply to this chapter:
“Hawaii software development business” means any person, agency, corporation, or other business entity with its principal place of business or ancillary headquarters located in the State of Hawaii that proposes to obtain eighty per cent of the labor for software development from persons domiciled in Hawaii.
“Hawaii software service center” means the high technology development corporation that shall be responsible for maintaining the listings of all state software development projects.

[Eff 12/15/95; am and comp 11/17/97; am and comp 11/25/02; am and comp MAY 20 2004 ] (Auth: HRS §§103D-202, 103D-1006) (Imp: HRS §§103D-1006, 206M-31)

§3-124-32 Applicability.

(a) These rules shall apply to all solicitations made pursuant to sections 103D-302 and 103D-303, HRS, issued by a purchasing agency when so stated in the solicitation.
(b) These rules shall not apply whenever the application will disqualify any government agency from receiving federal funds or aid.
(c) The Hawaii software service center shall develop and make public a list of governmental agencies requesting software services including a description of the software services required and a timetable for development.
(d) The information provided on the list shall not be binding and may be changed at the discretion of state agencies, provided that any changes shall be promptly communicated to the Hawaii software service center.

[Eff 12/15/95; am and comp 11/17/97; am and comp 11/25/02; comp MAY 20 2004 ] (Auth: HRS §§103D- 202, 103D-1006) (Imp: HRS §§103D-1006, 206M-33)

§3-124-33 Qualification procedure.

(a) A business desiring a preference pursuant to section 103D-1006, HRS, shall certify that they are a Hawaii software development business when submitting an offer. A Certificate of Eligibility form issued by the administrator shall be used to certify the business and be included as part of the offer.
(b) Offerors shall indicate on the certification form, included as part of the offer, sufficient information to substantiate that eighty per cent of the employees who will be working on the proposed software development project are domiciled in Hawaii.
(c) Offerors shall submit with the certification form sufficient information to support the Hawaii software development business preference. Sufficient information shall include, but not be limited to, the authorized officer’s name, office or position held, name of offeror and its local address, date that the office was opened, and name and local addresses of offeror’s employees who will provide the labor for the required services. The procurement officer calling for offers may request additional information deemed necessary in order to qualify the offeror, and shall have sole discretion in determining acceptance of the offeror as a Hawaii software development business.
(d) Any offeror who is not accepted for the Hawaii software development business preference may appeal by filing a written request for re-examination of facts to the procurement officer who issued the solicitation.

[Eff 12/15/95; comp 11/17/97; am and comp 11/25/02; am and comp MAY 20 2004] (Auth: HRS §§103D-202, 103D-1006) (Imp: HRS §103D-1006)

§3-124-34 Solicitation procedure.

(a) Solicitations issued by a state purchasing agency shall contain a notice stating that a price preference will be given to Hawaii software development businesses. This price preference will be ten per cent of the price, and will be used for evaluation.
(b) All state purchasing agencies shall provide an appropriate space for offerors to indicate whether the bidder is requesting the Hawaii software development’ business preference.
(c) When a solicitation specifies that because of federal requirements, the Hawaii software development business preference will not be considered, the price preference shall not apply.
(d) Offerors requesting a preference shall submit a completed certification form, as required by section 3-124-33, with each offer. Previous certifications shall not apply unless allowed by the solicitation.
(e) Any offeror who fails to indicate that it is a Hawaii software development business will be presumed to be a non-Hawaii software development business and the offeror’s offer will be increased by ten per cent for purposes of evaluation.

[Eff 12/15/95; am and comp 11/17/97; comp 11/25/02; comp MAY 20 2004 ] (Auth: HRS §§103D-202, 103D-1006) (Imp: HRS §103D-1006)

§3-124-35 Evaluation procedure and contract award.

(a) In any expenditure of public funds for software development where offers received contain both Hawaii and non-Hawaii software development businesses, for the purpose of selecting the lowest offer only, the offer by a non-Hawaii software development business shall be increased by ten per cent.
(b) Should more than one preference allowed by statute apply, the evaluated price shall be based on application of applicable preferences in the order specified herein. The preferences (1) through (7) in this subsection shall be applied to the original prices. The sum of the preferences, where applicable, shall be added to the original price, except that preferences (1) and (4) shall be subtracted from the Hawaii products or recycled products price.

• (1) Hawaii products list, pursuant to section 103D-1002, HRS;
• (2) Tax adjustment for tax exempt offerors, pursuant to section 103D-1008, HRS;
• (3) Preferred use of Hawaii software development businesses, pursuant to section 103D-1006, HRS;
• (4) Recycled products, pursuant to section 103D- 1005, HRS;
• (5) Reciprocal preference, pursuant to section 103D-1004, HRS; and
• (6) Printing, binding, and stationery work within the State, pursuant to section 103D-1003, HRS;
• (7) Preference for persons with disabilities, pursuant to section 103D-1009, HRS.

(c) The responsible and responsive offeror submitting the lowest evaluated offer(s) pursuant to section 103D-302, HRS, taking into consideration all applicable preferences shall be awarded the contract.
(d) The contract amount shall be the original price offered, exclusive of any preference.
(e) Should the price comparison for bids submitted pursuant to section 103D-302, HRS, after taking into consideration all applicable preferences, result in identical evaluated prices for Hawaii software development projects, the procurement officer shall award the contract resulting from an invitation for bids pursuant to section 3-122-34.
(f) For proposals submitted pursuant to section 103D-303, HRS, and after taking into consideration all applicable preferences, the procurement officer shall award the contract pursuant to section 3-122-57.

[Eff 12/15/95; am and comp 11/17/97; am and comp 11/25/02; am and comp MAY 20 2004 ] (Auth: HRS §§103D-202, 103D-1006) (Imp: HRS §103D-1006)

§§3-124-36 to 3-124-39 (Reserved)

SUBCHAPTER 6
REPEALED

§3-124-40 to 3-124-49 REPEALED. [R ]

SUBCHAPTER 7
TAX PREFERENCE

§3-124-50 Purpose.

The purpose of this subchapter is to provide procedures for the application of the tax preference for taxpaying bidders. The objective is to ensure fair competition for bidders paying the applicable Hawaii general excise tax and the applicable Hawaii use tax.

[Eff and comp 11/17/97; am and comp 11/25/02; am and comp MAY 20 2004] (Auth: HRS §103D-202) (Imp: HRS §103D-1008)

§3-124-51 Definitions.

As used in this chapter:
“Tax exempt bidder” means a bidder that is not subject to the applicable Hawaii general excise and applicable Hawaii use tax, under chapters 237 and 238, HRS, resulting from the performance of the work required by the solicitation; or a bidder that has tax exempt status under federal or state laws or both.
“Taxpaying bidder” means a bidder that is subject to the applicable Hawaii general excise tax and applicable Hawaii use tax, under chapters 237 and 238, HRS, for the performance of the work required by the solicitation.

[Eff and comp 11/17/97; am and comp 11/25/02; comp MAY 20 2004 ] (Auth: HRS §103D-202) (Imp: HRS §103D-1008)

§3-124-52 Applicability.

These rules shall apply to all solicitations issued pursuant to section 103D-302, HRS, by a purchasing agency and the solicitation shall so state therein, except whenever the application will disqualify any government agency from receiving federal funds or aid.

[Eff and comp 11/17/97; am and comp 11/25/02; comp MAY 20 2004 ] (Auth: HRS §103D-202) (Imp: HRS §103D-1008)

§3-124-53 Qualification procedure.

Any taxpaying bidder shall qualify for the tax preference pursuant to this subchapter by submitting tax clearance certificate(s) issued by the state department of taxation and the Internal Revenue Service to the purchasing agency.

[Eff and comp 11/17/97; comp 11/25/02; comp MAY 20 2004 ] (Auth: HRS §103D-202) (Imp: HRS §103D-1008)

§3-124-54 Bidding procedure.

Solicitations issued by a purchasing agency shall contain a notice stating that a tax preference will be given to taxpaying bidders.

[Eff and comp 11/17/97; am and comp 11/25/02; comp MAY 20 2004 ]Auth: HRS §103D-202) (Imp: HRS §103D-1008)

§3-124-55 Evaluation procedure and contract award.

(a) As applicable, the price submitted by the tax exempt bidder shall be increased by the applicable retail rate of the Hawaii general excise tax and applicable use tax to determine the evaluated price for award purposes.
(b) The contract amount shall be the original price bid, exclusive of any preferences used in evaluating the bid.
(c) Should more than one preference allowed by statute apply, the evaluated price shall be based on application of applicable preferences in the order specified herein. The preferences (1) through (7) in this subsection shall be applied to the original prices. The sum of the preferences, where applicable, shall be added to the original price, except that preferences (1) and (4) shall be subtracted from the Hawaii products or recycled products price.

• (1) Hawaii products list, if applicable, pursuant to section 103D-1002, HRS;
• (2) Tax adjustment for tax exempt bidders, pursuant to section 103D-1008, HRS;
• (3) Preferred use of Hawaii software development businesses, pursuant to section 103D-.1006, HRS;
• (4) Recycled products, pursuant to section 103D- 1005, HRS;
• (5) Reciprocal preference, pursuant to section 103D-1004, HRS; and
• (6) Printing, binding, and stationery work within the State, pursuant to section 103D-1003, HRS; and
• (7) Preference for persons with disabilities, pursuant to section 103D-1009, HRS.

(d) Should the price comparison, after taking into consideration all applicable preferences, result in identical evaluated prices, the procurement officer shall award the contract pursuant to section 3-122-34.

[Eff and comp 11/17/97; am and comp 11/25/02; am and comp MAY 20 2004] (Auth: HRS §103D-202) (Imp: HRS §103D-1008)

§§3-124-56 to 3-124-59 (Reserved).

SUBCHAPTER 8
QUALIFIED COMMUNITY REHABILITATION PROGRAMS

§3-124-60 Purpose.

The purpose of this subchapter is to establish procedures for extending a preference for goods and services provided by qualified community rehabilitation programs.

[Eff and comp 11/17/97; comp 11/25/02; am and comp MAY 20 2004 ] (Auth: HRS §§103D-202, 103D-1009) (Imp: HRS §§103D- 1009, 103D-1010, 103D-1011)

§3-124-61 Definitions.

Definitions are in section 103D-1001, HRS. The following definitions are also applicable to terms used in this chapter:
“Department” means the state department of labor and industrial relations.
“Nonprofit corporation” means a corporation of which no part of the income or profit is distributable to its members, directors, or officers pursuant to chapter 415B, HRS.
“Partners in employment program list” means a list issued by the state procurement office that identifies goods or services offered by qualified rehabilitation programs to all State and county agencies.
“Qualified offeror” means any offeror operating a qualified community rehabilitation program who is also a nonprofit corporation and is in conformance with criteria established by the department pursuant to chapter 91, HRS.

[Eff and comp 11/17/97; am and comp 11/25/02; comp MAY 20 2004 ] (Auth: HRS §§103D- 202, 103D-1009, 415B-2) (Imp: HRS §103D-1009)

§3-124-62 Applicability.

These rules shall apply to all solicitations for goods and services made pursuant to sections 103D-302 and 103D-303, HRS, issued by a purchasing agency and the solicitation shall so state therein.

[Eff and comp 11/17/97; am and comp 11/25/02; am and comp MAY 20 2004 ] (Auth: HRS §103D-202) (Imp: SLH 1997, Act 352, §2, §103D-1009)

§3-124-63 Qualification procedure.

(a) Qualification for obtaining a preference shall be in conformance with criteria established by this subchapter.
(b) Organizations listed in the partners in employment program qualify for a preference. All other prospective offerors desiring a preference shall submit with their offer the “Certificate of Eligibility to be Certified as a Qualified Community Rehabilitation Program” issued by the administrator.

[Eff and comp 11/17/97; am and comp 11/25/02; comp MAY 20 2004] (Auth: HRS §§103D-202, 103D-1009) (Imp: HRS §103D- 1009)

§3-124-64 Evaluation procedure and contract award.

(a) In evaluating offers for goods or services, all chief procurement officers and heads of purchasing agencies shall purchase from qualified community rehabilitation programs provided the prices submitted by a non-community rehabilitation program shall be increased by the percentage allowed under section 103D-1009, HRS, to determine the lowest evaluated offeror.
(b) The contract amount shall be the amount of the price offered, exclusive of any preference.
(c) Should more than one preference allowed by statute apply, the evaluated price shall be based on application of applicable preferences in the order specified below. The preferences (1) through (7) in this subsection shall be applied to the original prices. The sum of the preferences, where applicable, shall be added to the original price, except that preferences (1) and (4) shall be subtracted from the Hawaii products or recycled products price.

• (1) Hawaii products list, if applicable, pursuant to section 103D-1002, HRS;
• (2) Tax adjustment for tax exempt bidders, pursuant to section 103D-1008, HRS;
• (3) Preferred use of Hawaii software development businesses, pursuant to section 103D-.1006, HRS;
• (4) Recycled products, pursuant to section 103D- 1005, HRS;
• (5) Reciprocal preference, pursuant to section 103D-1004, HRS; and
• (6) Printing, binding, and stationery work within the State, pursuant to section 103D-1003, HRS; and
• (7) Preference for persons with disabilities, pursuant to section 103D-1009, HRS.

(d) Should the price comparison for bids submitted pursuant to section 103D-302, HRS, after taking into consideration all applicable preferences, result in identical total prices, award shall be made pursuant to section 3-122-34.
(e) For proposals submitted pursuant to section 103D-303, HRS, and after taking into consideration all applicable preferences, the procurement officer shall award the contract pursuant to section 3-122-57.

[Eff and comp 11/17/97; am and comp 11/25/02; am and comp MAY 20 2004 ] (Auth: HRS §§103D-202, 103D-1009) (Imp: HRS §103D-1009)

§3-124-65 Waiver to competitive bids or proposals.

(a) Notwithstanding the provisions of section 3-124-66, any purchasing agency without advertising or calling for offers may purchase goods and services provided by qualified community rehabilitation programs pursuant to section 3-124-63 which have indicated an interest in supplying the goods or services and on an equitable basis may apportion the business among the interested programs; provided that:

• (1) The goods or services meet the specifications and needs of the head of the purchasing agency and are purchased at a fair market price as determined by the appropriate public agency; and
• (2) The provider complies with section 103D-1010, HRS, and submit with their offer the “Certificate of Eligibility to be Certified as a Qualified Community Rehabilitation Program.”

(b) Purchasing agencies shall negotiate the conditions and terms for the purchase, including the price of the good or service with the qualified community rehabilitation program; provided that the price of the good or service shall not exceed the fair market price and there is assurance that the qualified community rehabilitation program proposal is in compliance with all rules related to procurement.

[Eff and comp 11/17/97; am and comp 11/25/02; comp MAY 20 2004 ] (Auth: HRS §§ 103D-202, 103D-1010) (Imp: HRS §§103D-1010, 103D-1011)

§3-124-66 Partners in employment program.

The state procurement office shall:

• (1) Maintain and post on the Internet a current list of participants in the partners in employment program and the goods and services they provide; and
• (2) Ensure that any good or service available from a qualified community rehabilitation program pursuant to this subchapter is not placed on the Hawaii products list under section 103D-1002, HRS.

[Eff and comp 11/17/97; am and comp 11/25/02; am and comp MAY 20 2004 ] (Auth: HRS §§103D-202, 103D-1010) (Imp: HRS §§103D-1010, 103D-1011)

§3-124-67 Exempt from wage provision.

Service contracts awarded to qualified community rehabilitation programs under this subchapter shall be exempt from wages provision of section 103-55, HRS.

[Eff and comp 11/17/97; comp 11/25/02; comp MAY 20 2004 ] (Auth: HRS §§103-55, 103D-202) (Imp: HRS §103-55)

DEPARTMENT OF ACCOUNTING AND GENERAL SERVICES
Amendments to and compilation of chapter 3-124, Hawaii Administrative Rules, on the Summary page dated April 22, 2004, were adopted on April 22, 2004 following a public hearing held on April 8, 2004 in Honolulu, Hawaii; and via video conference from Honolulu, Hawaii on April 8, 2004 to Hilo, Hawaii; Wailuku, Maui; and Lihue, Kauai; after public notice was given in the Honolulu Star Bulletin, Hawaii Tribune-Herald, West Hawaii Today, The Maui News and The Garden Island on March 8, 2004. This chapter 124, subtitle 11 of title 3, Hawaii Administrative Rules, replaces interim rules dated 7/03/03 (file no. 2544), which repealed sections 3-124-40, 3-124-41, 3-124-42, 3-124-43, 3-124-44, 3-124-45, 3-124-46, 3-124-47, 3-124-48, 3-124-49, and amend section 3-124-66 and shall take effect ten days after filing with the Office of the Lieutenant Governor.