The Solicitation and Award phase of the procurement lifecycle is defined as the process of acquiring goods, services, or construction through an open, competitive solicitation process and includes the following steps: solicitation development; solicitation issuance; proposal receipt; evaluation; discussions (if applicable); and contract award.
If a requirements falls under the dollar thresholds discussed below, the Agency should purchase the goods, services or construction using the streamlined processes for the small purchase method of procurement.
The following table outlines the small purchase thresholds and the associated types of small purchase procedures state agencies are required to use for each. Agencies may establish stricter internal policies and processes related to small purchases, however they must meet the following requirements at a minimum.
|
Amount of Purchase |
Type of Procurement |
Minimum Number of Quotes |
Affected Agencies |
|
$0.01 – $4,999 |
All (HRS 103D and 103F) |
Adequate, reasonable competition |
All State Agencies |
|
$5,000 – $14,999 |
All (HRS 103D and 103F) |
Minimum Three Quotes (phone, fax, email) |
All State Agencies |
|
$15,000 – $24,999 |
All (HRS 103D and 103F) |
Minimum Three Written Quotes |
Other CPO Jurisdictions Only, and HRS 103F procurements |
|
$15,000 – $99,999 $15,000 – $249,999 |
Good/Services Construction((Performance and Payment Bonds are required for all small purchase construction procurements $50,000 or greater.)) (HRS 103D) |
Minimum Three Quotes via eProcurement system |
Executive Branch Agencies Only |
|
$25,000 – $99,999 $25,000 – $249,999 |
Good/Services Construction((Performance and Payment Bonds are required for all small purchase construction procurements $50,000 or greater.))(HRS 103D) |
Minimum Three Quotes via eProcurement system |
Other CPO Jurisdictions Only |
Note: Professional service procurements for professions under HRS 464 shall use the process set forth in HRS §§103D-304 or 103D-307, if applicable.
The small purchase process may be used for purchases within the small purchase thresholds outline above, and where award is based on the lowest responsive, responsible quote. Small purchases are generally simple to procure and administer while providing for as much competition as is practicable. Public notice and public bid opening are not required. The small purchase method of procurement may not be used when the solicitation requires a vendor to propose something other than price OR where award must be based on criteria other than lowest price. ((This section does not apply to small purchases under HRS 103F.))
Additionally, agencies shall not parcel or artificially or intentionally divide a purchase for the same, like, or related items of goods, services, or construction into several purchases or smaller quantities, in order to utilize the small purchase process and avoid statutory competitive requirements.
If an Executive Branch agency utilizes the small purchase method, then upon finalization of the specifications, the agency should execute the procurement in accordance with the process outlined below.
For purchases of $5,000 but less than $15,000 ($25,000 for HRS 103F), the agency must obtain a minimum of three (3) quotations. Quotes may be obtained by telephone, email, fax, or by posting a solicitation to the respective eProcurement system. All quotes must be documented in the contract file. Although an agency is only required to seek three (3) quotations, it should seek to acquire quotations from as many viable sources as possible to ensure the best price is obtained and maximum competition is generated.
Agencies obtaining quotes outside of an eProcurement system must maintain a small purchase procurement/contract file containing the price quotations requested, quotations received, and a tabulation of prices offered documented on Form SPO-010. Once the quotes have been evaluated, the purchasing officer must document the determination of award on Form SPO-010, and file it with the procurement/contract file, documenting the basis for placing the order with the chosen vendor. The agency must retain these records for audit and review purposes. With the use of an eProcurement system, an agency is NOT required to utilize Form SPO-010 to document. Instead, it can print the award summary report on eProcurement for its small purchase order file.
For the Executive Branch
HRS 103D small purchases of $15,000 to less than $100K goods and services or less than $250K for construction, the agency must procure the requirement by utilizing the State eProcurement system.
After the executive agency has selected a vendor, documented its determination, and verified vendor compliance utilizing Hawaii Compliance Express (HCE) or receipt of equivalent hard copies, it should consider whether the vendor will accept and can be paid in accordance with guidelines for the State purchasing card (p-Card). If so, the agency should provide the P-Card information to the vendor as payment for the small purchase. If not, the purchasing officer will need to forward an approved Purchase Order to the vendor for processing.
Small Purchases awards for goods, services and construction $2,500 and above must be posted to the SPO website. All small purchase awards for health and human services shall be posted to the SPO Health and Human Services contract awards website.
Once it has been decided in the planning process that competitive sealed bidding is the appropriate method, the process below shall be followed. The Competitive Sealed Bidding process is outlined in the graphic below, and detailed in the following sections.
In accordance with HAR §3-122-21, the following are the minimum required components of any IFB:
Agencies are encouraged to incorporate these elements and any other agency-specific requirements into a checklist to ensure compliance with all requirements prior to releasing the IFB.
The IFB document may require internal agency reviews and approvals prior to posting the Public Notice or releasing the IFB on an eProcurement system.
Once approved, the purchasing agency must advertise the bid opportunity to potential bidders through a public notice.((Solicitations posted on an eProcurement system satisfy this public notice requirement. Advertisement through a public notice is intended to maximize competition.))
For the Executive Branch
At a minimum, public notices shall be posted on the SPO notices site and may also be publicized by other means including but not limited to:
A public notice must include the following information:
All bid opportunities are required to be published for a minimum of ten (10) calendar days between the first posting date and the date set for receipt and opening of bids. During the advertisement period, prospective bidders may only contact the purchasing agency for inquiries and clarifications in accordance with the solicitation requirements. Inquiries and responses shall be made uniformly available to all potential bidders and, if required, the procurement officer shall issue an addendum to the IFB that details any changes to the IFB.
Addenda are typically used to communicate material changes to the IFB, correct minor defects, and provide information or clarification to potential bidders. If the purchasing agency must amend the IFB, it may need to consider the impact to the potential bidder and determine if additional time should be given for submission of bids.
A pre-bid conference is conducted to explain the procurement requirements to a potential bidder and allow a potential bidder to ask questions.
In accordance with HRS 103D-303.5, a pre-bid conference is required for all construction projects with a total estimated contract value of $500,000 or more and design-build projects with an estimated value of $100,000 or greater. IFBs for goods and services and construction below the dollar thresholds, may include a pre-bid conference. Such events shall be specified in the IFB, including date, time and location of the event.
Construction projects and design-build project within the dollar thresholds, shall allow for a minimum of fifteen (15) calendar days between the date of the pre-bid conference and the date set for receipt of bids. This gives the purchasing officer time to make any required changes to the IFB, if needed, and provide the contractors adequate time to incorporate information learned at the conference into their bids. Pre-bid conferences for non-construction procurements are optional.
Upon receipt by the purchasing agency, bid documents shall be date and time stamped but not opened. Bids shall be stored in a secure place until the time and date set for bid opening. At the time, date and place designated in the IFB for bid opening, the Procurement Officer and at least one witness shall publicly open all bids received. The names of the bidders and the amounts of their bids shall be read aloud and made available to the persons present. This information should be recorded at the time of opening in a bid tabulation or bid abstract. The name and address of the required witnesses shall also be documented.
Bids are publicly available for IFBs conducted on an eProcurement system, upon the date and time of closing. The purchasing agency must inspect all bids to ensure they are signed by the bidder, verify and secure any required bid bond and remove any documents designated by the bidder to be confidential. All other documents shall be available for public inspection at the time of bid opening.
Any bids that arrive after the official due date and time are considered late and shall be returned unopened to the bidder.
For IFBs conducted in an eProcurement system bid information is publicly available online at the due date and time set forth in the IFB.
For the Executive Branch
Users must establish a free account with the State eProcurement system in order to view offers and abstracts.
A bidder may correct a mistake in a bid prior to the time of opening by giving written notice to the purchasing agency of intent to withdraw the bid for modification or to withdraw the bid completely. Changes in a bid after opening are acceptable only if the change is made to correct a minor error that does not affect price, quantity, quality, delivery, or contractual conditions. In case of a mathematical error in extension of price, unit price shall govern.
After bid opening, award is not automatic and the initial information obtained during the bid opening results in only an apparent low bidder. The apparent low bidder may or may not be awarded the contract. Bid award shall be made to the lowest responsible and responsive bidder whose bid meets the requirements and criteria set forth in the IFB. As such, after the bids are opened they must be evaluated to determine compliance with all IFB requirements, specifications and ability of the bidders to perform the contract. The Procurement Officer responsible for the procurement will examine the bid for compliance with all mandatory requirements and substantial conformity with the requirements contained in the IFB.
After all applicable preferences are considered, bids are then evaluated to determine which bid offers the lowest cost to the state in accordance with the IFB. See discussion below on determining fair and reasonable prices via cost and/or price analysis.
If only one responsive bid is received, HAR §3-122-35 states that award may be made to the single bidder if:
If any of these conditions are not true, the bid may be rejected and either a new solicitation may be conducted, the procurement may be canceled, or the goods, services and construction are procured using an alternate procurement method.
If bids are received that are identical in price and meet all of the requirements established in the solicitation, award may be made in any permissible manner that will resolve the tie bid as specified in the IFB. Examples include, but are not limited to:
A written record of a low tie bid, and its resolution, must be maintained with the procurement file. Use of this method to resolve the tie may not be allowable in contracts utilizing federal funds. The procurement officer must review federal requirements to determine if the tie bid resolution process may be used.
A contract may only be awarded to a responsive and responsible bidder. A responsive bid is one that complies with the solicitation in all acceptability and material respects and contains no material defects. A material defect is one that affects price, quality, quantity, or delivery terms. Material deficiencies affecting responsiveness may not be corrected.
Some examples of non-responsiveness are:
Responsibility relates to the capability of the vendor to actually perform the work or provide the items the state is seeking. Responsibility may include a vendor’s ability to secure bonding, obtain insurance, or hire sufficient staff. Matters of responsibility may sometimes be addressed or corrected before contract award.
Considerations for determining responsibility may include but are not limited to, the following:
Responsibility determinations require due diligence on the part of the Procurement Officer. If the lowest responsive bidder is believed to be non-responsible, it is highly recommended to work with the agency’s attorney general (AG) or corporation counsel (COR) to determine the best means of moving forward.
Note: There is a wide body of judicial rulings that further define and refine the limits of responsiveness and responsibility. Therefore, when faced with a matter of either responsiveness or responsibility during your bid evaluation, SPO highly suggests you coordinate with your AG or COR to ensure your interpretation and any resulting determination comports with the most recent judicial rulings on these matters.
The multi-step competitive sealed bidding method of procurement, is a combination of the competitive sealed proposals process (Phase 1) and the sealed bidding process (Phase 2). This method is desirable to use when it is determined that award to the lowest responsive, responsible bidder is desired, but it is not practical to initially prepare a definitive purchase description which will be suitable to permit an award based on price. The multi-step competitive sealed bidding method allows the purchasing agency to; (Phase 1) evaluate technical proposals, rank bidders, perform discussions, and allow revised priced proposals, if necessary; and (Phase 2) to identify the lowest, responsive and responsible bidder.
In this process, priced bids may be submitted in a separately sealed envelope along with the technical proposals, or alternatively, the purchasing agency may instruct that priced bids be submitted after technical proposals have been submitted, evaluated and discussions are completed. Regardless of the approach, the priced bids are only considered in step two and only for those bidders whose unpriced technical proposals are found acceptable in step one.
Unless price proposals were submitted during Phase 1, notification of the due date and time for priced proposals should be issued only to offerors deemed acceptable in Phase 1.
If a separate submittal of the priced bid is required in Phase 2, the purchasing agency must provide all bidders whose unpriced technical proposals are found acceptable in Phase 1 an opportunity to submit their priced bid.
The Competitive Sealed Proposal process is outlined in the graphic below, and detailed in the following sections.
In accordance with HRS 103D, once the purchasing agency has developed a detailed specification or statement of work it must incorporate this information in a solicitation document, known as a Request for Proposals (RFP) which should include the following:
In accordance with HAR §3-122-46, the following are the minimum required components of any RFP:
To assist agencies in developing RFP documents, the SPO has developed an RFP Template. If the Procurement Team has developed a comprehensive Procurement Strategy Plan, including detailed scope and specifications, the template will expedite development of the RFP. Ideally, the template should provide the required content and components outlined above in an easy to use way for agencies to insert additional required elements and information.
Internal approvals may be required prior to posting the Public Notice. Check your departmental procedures. The Procurement Officer should ensure that it receives all required approvals prior to posting the Public Notice.
Once the RFP document is completed and approved, the purchasing agency shall advertise the opportunity to potential offerors through a public notice to maximize competition. At a minimum, public notices shall be posted on the SPO website ((Solicitations posted on an eProcurement system satisfy this public notice requirement.))and may also be publicized by other means to include, but not limited to:
A public notice must include the following information:
All RFPs shall be published for a minimum of thirty (30) calendar days between the first posting date and the date set for receipt of proposals, unless the Procurement Officer makes a written determination justifying that a shorter time will provide for adequate competition.
All inquiries and government responses shall be provided to all potential offerors and should be issued by an addendum to the solicitation. Addenda are typically used to correct minor defects, and provide information or clarification to potential offerors. If the RFP must be amended, the impact to the potential offeror shall be considered, and the proposal due date shall be extended if applicable.
Addenda should be published in the same location and manner as the RFP. It is the responsibility of the prospective offeror to keep current on any addenda and consider these changes in their proposal.
In accordance with HRS §103D-303.5, a pre-proposal conference is required for all construction projects with a total estimated contract value of $500,000 or more and design-build projects with an estimated value of $100,000 or greater. RFP’s for goods and services and construction below the dollar thresholds above, may include a pre-proposal conference. Such events shall be specified in the RFP, including date, time and location of the event.
Construction and design-build projects within the dollar thresholds, shall allow for a minimum of fifteen (15) calendar days between the date of the pre-proposal conference and the date set for receipt of proposals. This gives the purchasing officer time to make any required changes to the RFP, if needed, and provide the contractors adequate time to incorporate information learned at the conference into their proposals. Pre-proposal conferences for goods and services are optional.
Upon receipt by the purchasing agency, proposals, shall be date and time stamped but not opened. Proposals shall be stored in a secure place unopened until the closing date and hour set out in the solicitation.
After the date established in the RFP for receipt of proposals, the Procurement Officer and at least one witness shall open all proposals received as of the advertised opening date. Upon opening the proposals the Procurement Officer shall prepare a register of proposals which shall be made available to the public upon posting of the award.
Any proposals arriving after the closing date and time are considered late and shall be returned to the offeror unopened.
In order to guide the committee during proposal evaluation, please refer to your evaluation strategy plan developed during the market research phase, see Section 3.9. Following receipt of responses to the RFP, the proposals shall be examined for general conformity and acceptability or potential acceptability, in accordance with the RFP.
Proposals shall be initially evaluated to determine if they are acceptable, potentially acceptable or unacceptable. If the evaluation committee determines there is a need for discussions, the evaluation committee will establish a Priority List of Offerors. Responsible offerors whose proposals are deemed acceptable or potentially acceptable are eligible to be placed on the priority list. If numerous proposals are received and the evaluation team wishes to establish a competitive range then the team must rank, at a minimum, three (3) responsible offerors in priority order based on the proposal evaluation scores. Only offerors on the Priority List of Offerors are eligible to enter discussions, receive further addenda to the RFP, and submit Best and Final Offers (BAFOs).
Discussions are an exchange of information to promote understanding of a state agency’s requirements and an offeror’s proposal, and to facilitate arriving at a contract that will be the best value to the State, taking into consideration the evaluation factors set forth in the request for proposals. Although discussions are allowable in an RFP procurement, it is not required and proposals may be accepted on evaluation without discussion and proceed to award.
Discussions are limited to offerors on the Priority List of Offerors developed by the Evaluation Committee. The evaluation committee chair must establish procedures and schedules for conducting discussions and keep a record of the date, place, purpose of meetings, and those attending. All priority-listed offerors shall be afforded equal treatment. If there are any substantial oral clarifications of a proposal during discussion, the offeror shall be required to provide the clarifications to the evaluation committee, in writing, in response to a request for BAFO.
Once discussions are concluded, a BAFO request may be issued via addendum to the priority-listed offerors, requesting any changes to an offeror’s proposal based on discussions.
A request for BAFO may be used for any of the following reasons:
Overall, the BAFO is a good tool to ensure priority-listed offerors are accorded fair and equal treatment with respect to any opportunity for discussions and revisions of proposals.
When the need for a BAFO arises, the BAFO addendum to the RFP will be provided to the Priority List of Offerors only. When issued, the Procurement Officer will establish a date and time for the priority-listed offerors to submit the response to the BAFO. Included in the BAFO, priority-listed offerors shall be informed if they do not submit a best and final offer or a notice of withdrawal, their immediate previous offer will be construed as their best and final offer. After best and final offers are received, final evaluations and scoring will be conducted for an award.
Award shall be made to the responsible offeror whose proposal is determined to be the most advantageous to the State considering price and the evaluation factors set forth in the RFP.
Once the Procurement Officer or evaluation committee has completed its final evaluation and has made a recommendation for award, the Procurement Officer will document the recommendation of award for the procurement file. Refer to Section 4.7.2.
The purchasing agency shall post the notice of award on the SPO website, or jurisdictional equivalent, for a minimum of five (5) working days. Upon posting the award the contract file shall be available for public inspection pursuant to HAR §3-122-58. At a minimum the procurement file shall include:
If a person requests to inspect portion(s) of an offeror’s proposal designated as confidential pursuant to HAR §3-122-46(9), the inspection shall be subject to written determination by the respective attorney general or corporation counsel for confidentiality in accordance with HRS 92F.
If only one responsible offeror submits an acceptable proposal, pursuant to HAR §3-122-59, award may be made if the Procurement Officer determines that the price submitted is fair and reasonable, and other prospective offerors had reasonable opportunity to respond or there is not adequate time for a re-solicitation. If any of these conditions are not met, the offer may be rejected and either a new solicitation may be conducted, the procurement may be canceled, or the goods, services, or construction may be procured using an alternate procurement method.
In accordance with HRS §103D-303(i) and other provisions of that section, construction projects may be solicited through a request for proposals utilizing the design-build method; provided that:
Note: A pre-proposal conference shall be held fifteen days prior to proposal submission for construction projects $500,000 or greater or design-build projects $100,000 or greater.
As discussed in the planning stage, professional services are those services as defined by HRS 103D-104 including the professional and scientific occupation series contained in the United States Office of Personnel Management’s Qualifications Standards Handbook.
Design professional services furnished by licensees under HRS Chapter 464 shall be procured by this method. ((Only if the emergency requirements of HRS §103D-307 are met can professional design services be procured utilizing the emergency procurement method.)) Other professional services may be procured by this process but may also be procured using other available methods of procurement.
The professional services procurement method require the purchasing agency to perform a multi-phased procurement process. The high-level process with phases and associated steps for each is provide below.
The detailed process flow the Procurement Officer will follow is shown in the diagram below.
Prior to the beginning of the fiscal year during which the agency anticipates the need to contract for professional services, or as soon as the need is identified, a notice shall be published on the SPO Procurement Notices site, or jurisdictional equivalent. The agency may also use additional methods deemed useful to advertise the need to vendors, such as newspapers, publications, mail, email, and fax.
The notice shall request all applicants interested in providing professional services for the agency to submit an expression of interest and a statement of qualifications for evaluation.
Pursuant to HRS §103D-304(c), the HOPA shall designate a Review Committee to evaluate statements of qualifications for the purpose of compiling a list of qualified professionals. The Review Committee reviews and evaluates the submitted documents, and prepares a list of qualified professionals. The Review Committee shall consist of no less than three persons with sufficient education, training, licenses or credentials for the professional services required. If the notice states, firms may be added to the list of qualified professionals throughout the year. Firms included on the list of qualified persons may amend their statements of qualifications as necessary or appropriate. Once established, professional services may be procured from the relevant list of qualified professionals developed by the Review Committee(s). Deputy Directors or equivalent appointed positions shall not serve on Review or Selection Committees.
When the purchasing agency identifies a need for professional services during the fiscal year, the HOPA must designate a Selection Committee, which consists of at least three persons with sufficient education, training, and licenses or credentials in the area of service required. The Selection Committee establishes selection criteria for the project, and using the list of qualified professionals, recommends a minimum of three qualified professionals, in rank order, to the HOPA.
In accordance with HRS §103D-304(e) the following selection criteria, set forth in descending order of importance, shall be used to evaluate the list of qualified professionals:
The selection committee shall evaluate the submissions of qualified professionals on the list against the selection criteria. The committee may conduct confidential discussions with any person who is included on the list regarding the services required and the services they are able to provide. In conducting discussions, there shall be no disclosure of any information derived from the competing professional service offerors.
The selection committee shall rank a minimum of three persons based on the selection criteria and send the ranking to the HOPA. The contract file shall contain a copy of the summary of qualifications for the ranking of each of the persons provided to the head of the purchasing agency for contract negotiations. If more than one person holds the same qualifications under this section, the selection committee shall rank the persons in a manner that ensures equal distribution of contracts among the persons holding the same qualifications. The recommendations of the selection committee shall not be overturned without due cause.
Individuals serving on the Selection Committee must complete an affidavit (Form SPO-024 or equivalent) to attest there are no potential conflicts of interest, to attest to a non-disclosure of source selection information and to advise members their names become public upon contract award.
In accordance with HRS §103D-304(h), based on the ranking developed by the Selection Committee, the HOPA, or designee, shall negotiate a contract with the first ranked person including a rate of compensation which is fair and reasonable, established in writing, and based upon the estimated value, scope, complexity, and nature of the services to be rendered. If negotiations fail with the first ranked professional then negotiations shall be formally terminated and negotiations with the second ranked professional shall be pursued. Failing to reach an agreement with the second ranked person, negotiations with the third ranked firm, shall commence. Should negotiations fail to reach an agreement with the third ranked firm then the Selection Committee may be called upon to select a minimum of three additional qualified service providers with which to begin negotiations. See discussion below on determining fair and reasonable prices via cost and/or price analysis.
If there are less than three (3) qualified professionals to be submitted by the Selection Committee, the head of the agency shall:
Professional services contracts exceeding $5,000 shall be posted to the applicable agency website within seven (7) days of contract award. Information that shall be posted includes:
With the exception of design professionals licensed under Chapter 464, professional services contracts under the small purchase threshold established in HRS §103D-305, may be negotiated by the HOPA with at least two persons from the list of qualified professionals in the manner described above. Qualified professionals must still be ranked and negotiations conducted in accordance with the criteria and procedure outlined above. Please see Section 4.8 for debrief and protest procedures, as required.
The Competitive Purchase of Service utilizes the request for proposals process and is the most frequently used procurement method for purchasing health and human services. In this process, award is made to the applicant whose proposal is determined to be the most advantageous to the State, based on the evaluation criteria set forth in the RFP.
The purchasing agency may engage in discussions with applicants for the purpose of clarification to assure full understanding of, and responsiveness to, the solicitation requirements. Applicants must be accorded fair and equal treatment with respect to any opportunity for discussion and revision of proposals. In conducting discussions, there shall be no disclosure of any information derived from proposals submitted by competing applicants.
The Competitive Purchase of Services process is outlined in the graphic above, and detailed in the following sections.
Applications for federal funding: Refer to Section 4.7.3.2.
The RFI is required to be in writing, but responses can be received in various ways, including but not limited to writing, a meeting, by email, or by other electronic media.
The public notice for the RFI shall be posted on the internet for a minimum of seven days. For the executive branch and participating jurisdictions, the public notice is posted on the SPO Procurement Notices website.
In accordance with HAR §3-142-202, the RFI must be conducted whenever developing/preparing to issue a RFP. “. . . At a minimum, a purchasing agency shall prepare a request for information prior to the development of a request for proposals to obtain community input, and facilitate community planning activities…” More than one RFI may be issued, especially if it is a new or complex procurement, but at least one shall be conducted.
The RFI allows providers to plan for services more effectively and it benefits the clients as well.
The recommended time to conduct a RFI is two (2) to nine (9) months prior to issuing the RFP depending if it‘s a new or repetitive procurement and also the complexity of the services. If issuing a RFP that is the same as the one that is expiring, at least one RFI is required to be conducted.
The following shall be included in the RFI notice:
There are also two statements that are required to be included in the RFI:
The RFI and summary of responses shall be included in the procurement file and mentioned in the RFP as part of planning activities.
The RFI for federal grant applications shall include, but is not limited to:
Refer to Section 4.7.3.2 for more information on federal grant applications.
In accordance with HAR §3-143-201, the following are the minimum required components of any RFP for a competitive purchase of services procurement:
To assist agencies in developing the RFP, an RFP Template is available. If the Procurement Team has developed a comprehensive Procurement Strategy Plan, including detailed specifications, the template will expedite RFP development.
The RFP may require agency-level approval prior to posting the Public Notice. The Procurement Officer should ensure the required approvals are received prior to posting.
The purchasing agency shall advertise the approved RFP to potential applicants through a public notice pursuant to HAR §3-143-202. Public notice is intended to maximize competition. At a minimum, public notices shall be posted on the SPO Internet site. In addition, the purchasing agency has several options for public notice including, but not limited to the following:
A public notice shall include the following information:
Opportunities shall be published for a minimum of twenty-eight (28) calendar days prior to the proposals submittal deadline unless the Procurement Officer makes a written determination that a shorter time will provide for adequate competition and the shorter period will allow potential applicants reasonable time to prepare their proposals.
During the solicitation period, prospective applicants may contact the purchasing agency for inquiries and clarifications in accordance with the solicitation requirements. These inquiries may require the RFP to be amended, corrected, or clarified by way of an addendum. The purchasing agency shall consider the addendum impact to potential applicants and extend the proposal submittal deadline, if applicable.
A provider orientation is mandatory and shall be conducted for all competitive purchase of services to provide greater efficiency and uniformity in the planning and procurement of health and human services.
The orientation information shall be specified in the RFP, including date, time and location of the event. The orientation shall be held between five (5) and fifteen (15) working days following the Public Notice, or long enough after the request for proposals has been issued to allow applicants to become familiar with the request for proposals, but sufficiently before proposal deadline to allow consideration of the orientation in preparing their proposals.
An orientation shall be conducted on the island on which the requested service will be provided. If a request for proposals seeks services to be provided on multiple islands, then the purchasing agency shall hold its orientation on the island that will receive the largest share of the requested services at the location or locations specified in the request for proposals.
Best Practice: Use of electronic media is encouraged to include potential applicants from neighbor islands to participate in the orientation.
The competitive purchase of services process allows for discussions to be held with providers during the period after public notice of the procurement and before the deadline set for receipt of proposals. During this phase, the purchasing agency may engage in discussions with applicants as often as the purchasing agency deems necessary or convenient. During the discussion period, the purchasing agency must ensure the reasonably fair and equal treatment of all prospective applicants if discussions are conducted.
Discussions during this period provides an opportunity for the prospective applicant to better understand the agency’s service needs and associated requirements. If at any time during discussions a prospective applicant provides details of the prospective proposal to the purchasing agency, the agency is required to hold that information in confidence and prevent disclosure of proposed proposal contents to competing applicants.
All written proposals received by the purchasing agency shall be kept secure and unopened until the proposal submittal deadline set forth in the solicitation. Proposals shall be date-stamped and if possible, time stamped.
Hand delivered proposals shall be considered received when actually received. Proposals submitted by U.S. mail shall be considered received on the postmark date, provided the proposal is actually received within 10 days from the postmark date (submittal deadline). Proposal received electronically shall only be allowed as authorized by the RFP.
Within 10 working days, a register of proposals shall be prepared and made available for public inspection. For all proposals, the register must include:
Any proposals submitted after the proposal submittal deadline are considered late. A notice of rejection shall be given to the applicant and the rejected proposal may be disposed of after 30 days, or the applicant may retrieve the proposal from the purchasing agency.
The Procurement Officer may schedule an initial evaluation committee meeting where evaluators are provided copies of the proposals and are given a brief overview of the general rules for the RFP evaluation. An additional evaluation committee meeting to score the proposals is scheduled after adequate time is allowed for evaluators to review the proposals.
The evaluation committee may score proposals as individuals or as a group. Individual evaluations become part of the procurement file. In group scoring, only the group evaluations become part of the procurement file. Evaluation of proposals shall be based solely upon the evaluation criteria and relative priorities as established in the request for proposals. Numerical evaluations shall be accompanied by written explanation of scores. The written evaluations shall be part of the procurement file and made available for public inspection after execution of all contracts. After evaluation, the proposals shall be ranked from most to least advantageous based on the evaluations.
Once the final scores have been determined, proposals shall be ranked from most advantageous to least advantageous, based on the evaluation criteria set forth in the RFP.
The purchasing agency may engage in discussions with applicants as often as the purchasing agency deems necessary or convenient. During this discussion period, the purchasing agency must ensure the reasonably fair and equal treatment of all applicants.
Discussions at this stage provide an opportunity for the purchasing agency to:
The purchasing agency must maintain the confidentiality of the contents of individual proposals during the course of any discussions conducted in order to prevent the disclosure to competing applicants.
To allow fair and equal opportunity to all responsive and responsible applicants, a purchasing agency may request applicants to submit final revised proposals. The final revised proposal enables an applicant to make a best and final offer or to respond to matters raised during discussions.
To request final revised proposals, the purchasing agency shall issue an addendum to all responsive and responsible applicants that includes the following information:
Unless specifically stated in the addendum, the final revised proposals should be submitted in the same manner as stipulated in the original RFP.
Upon review of the final revised proposals, unless the purchasing agency determines, in writing, that there is a need to issue an additional addendum requesting another final revised proposal, final evaluations shall be conducted for an award.
Award shall be made to the provider(s) whose proposal is considered most advantageous to the State based on factors set forth in the RFP.
The notice of award shall be sent to each responsive and responsible applicant by U.S. mail.
Each notice of award shall contain a statement of findings and decision that includes:
An aggrieved applicant may protest an award, in writing, within five working days after the postmark date on the notice of award. Refer to Section 4.8.2.2.
Discussion may be held during this period to negotiate a more advantageous contract for the state. Discussion shall be limited to:
Material change is one that would adversely affect the proposal’s rating during the evaluation process.
Inadequate response to an RFP exists when:
Refer to HAR §3-143-609 for procedures for inadequate responses to a RFP.
((Requirements discussed in this Section do not apply to procurements conducted under HRS 103F.))
The State of Hawaii has several statutory preferences an agency must consider as it develops a solicitation document and evaluation plan. Each of these preferences may impact an agency’s solicitation or the evaluation of the bid or price submitted in response to the solicitation. Preferences apply to Requests for Sealed Bids and Requests for Sealed Proposals for goods, services and construction.
Should more than one statutory preference apply, the evaluated price shall be based on application of applicable preferences in the order specified below. The sum of the preferences, where applicable, shall be applied to the original price, except that preferences (1) and (4) shall be subtracted from the specific Hawaii products or recycled products proposed price only.
A description of these preferences, their application, and their consideration in the evaluation process is provided below.
To encourage the procurement of products produced or manufactured within the state, the State of Hawaii seeks to award contracts to the lowest responsible and responsive bidders, with preference given to qualified and registered Hawaii products. In Request for Proposals this preference shall apply to price evaluation.
In developing an IFB/RFP, the Procurement Team must consider if any of the specifications required by the solicitation can be provided with Hawaii products. If so, the IFB/RFP must include a description of the products that are listed in the Hawaii products list that may be used to complete the scope of work specified in the solicitation. Alternatively, the procurement officer may allow the respondent to self-certify that the Hawaii products they are providing qualify for preference in response to the solicitation. Procurement Officers should ensure they follow the requirements set forth in HRS §103D-1002 and HAR 3-124 Subchapter 1 when evaluating and qualifying products.
Respondents are required to designate in their bids/proposals which individual product, and its price, is to be supplied as a Hawaii product. If a bid/proposal contains Hawaii products, then for the purpose of identifying the lowest bid, the bid offered for a Hawaii product item shall be decreased by subtracting ten percent (10%) for class I Hawaii product items bid, or fifteen percent (15%) for class II Hawaii product items bid. If all bids or proposals contain only Hawaii products, no preference shall be considered. The purchasing agency should be sure to note that the actual contract amount is the bid price, exclusive of the preference.
A sortable and searchable listing of Hawaii products can be found on the SPO Website.
For an IFB involving printing, binding, and/or stationery work, the purchasing agency, in evaluation of the bid, must first determine if ALL the work is to be completed in-state. After the bid evaluation is complete, if the in-State bidder is lowest, then the purchasing agency awards to the in-State bidder. If, however, an out-of-state bid is lowest, the bid amount by the out-of-state bidder shall be increased by fifteen percent (15%). The lowest total bid, taking the preference into consideration, shall be awarded the contract. Refer to HAR 3-124 Subchapter 2.
The purchasing agency should be sure to note that the contract amount is the price bid, exclusive of the preference.
Many states provide their in-state bidders with various preferences. As such, the State of Hawaii allows for the application of reciprocal preferences where applicable. The application of the reciprocal preference is at the option of the Chief Procurement Officer. In addition, the purchasing agency must also include a reference to the application of the preference in the IFB. Refer to HAR 3-124 Subchapter 3.
When determining the lowest evaluated bid price, the percentage of preference given to out-of-state bidders in their home state is added to the out-of-state bidder’s price. As an example, if the low bidder is from a state that grants a ten percent (10%) in-state preference to its own state bidders, and Hawaii does not have a comparable preference, the Hawaii agency must add ten percent (10%) to the out-of-state bidder’s price when evaluating the bid.
If the out-of-state bidder’s state has a preference comparable to a Hawaii preference, the reciprocal preference shall be the amount the out-of-state preference exceeds the Hawaii preference. As an example, if the low bidder is from California and that state grants a ten percent (10%) California Products preference to its own-in-state bidders, and the Hawaii bidder has a three percent (3%) Hawaii Products preference, the Hawaii agency must add seven percent (7%) to the California bidder’s price when evaluating the bid. The purchasing agency should be sure to note that the actual contract amount will be the bid price, exclusive of the preference.
For Executive Branch
The application of the reciprocal preference may be made at the option of the HOPA.
To encourage the use of recycled products, the State of Hawaii seeks to award contracts to the lowest responsible and responsive bidders, with preference given to the products containing recycled material. Refer to HAR 3-124 Subchapter 4.
In developing the IFB, the Procurement Team must consider if any of the specifications required by the solicitation can be provided with recycled products. If so, the IFB must include a description of the product(s) and the percent of recycled content required to qualify the product(s) for a preference. The purchasing agency should then provide Form SPO-008 in the bid for the bidder to complete and submit with a bid, certifying the recycled content of the product(s) offered. The bidder must also submit sufficient information to support the stated recycled content of the product(s) offered, such as a product specification or a product certification. The agency’s procurement officer may request additional information deemed necessary in order to qualify the product(s).
If a bid contains recycled products, then for the purpose of identifying the lowest bid, the bid offered for a recycled product shall be decreased by subtracting the applicable percentage for the product bid. If a bid requires all recycled product(s) then the preference is not applied.
In addition to the preference provided bidders, State purchasing agencies shall purchase office paper and printed material with recycled content pursuant to HRS §103D-1005(e). The purchasing agency should be sure to note that the actual contract amount will be the bid price, exclusive of the preference.
To promote the use of Hawaii software development businesses by state purchasing agencies, the State of Hawaii has established a preference for 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 percent (80%) of the labor for software development from persons domiciled in Hawaii. Refer to HAR 3-124 Subchapter 5.
If a purchasing agency’s solicitation requires software development services, it should provide Form SPO-009, and require that the bidder or offeror complete the form certifying that they are a Hawaii Software Development Business if they are seeking the preference. The bidder must also submit sufficient information to support their claim for the preference.
If offers are received from 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 percent (10%).
To ensure fair competition for bidders that are subject to the applicable Hawaii general excise tax and the applicable Hawaii use tax, the State of Hawaii has established a preference for taxpaying bidders. The purchasing agency must include a notice in the IFB stating that a tax preference will be given to taxpaying bidders. Refer to HAR 3-124 Subchapter 7.
If bids are received from both tax-exempt and taxpaying bidders, for the purpose of selecting the lowest bid, the bid from 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.
The Department of Labor and Industrial Relations (DLIR) establishes criteria for QCRPs. These programs are afforded a preference under statute, therefore a purchasing agency must consider whether the goods or services it is seeking in a solicitation can be provided by such programs. The SPO maintains a list of the Partners in Employment Program that identifies goods or services offered by QCRP. A purchasing agency should review this list prior to issuing their solicitation. Refer to HAR 3-124 Subchapter 8.
If the purchasing agency finds that the goods or services it is seeking are provided by a QCRP it may, without competing the need, purchase goods or services provided by qualified QCRP serving persons with disabilities that have indicated an interest in supplying the goods or services.
Alternatively, the purchasing agency may choose to compete its need and provide a preference for QCRP in the solicitation. In this instance, any bid or offer from an organizations listed in the partners in employment program qualifies for a preference.
If bids or offers are received from both QCRP and non-QCRP vendor, for the purpose of selecting the lowest offer only, the offer by a non-QCRP vendor shall be increased by five percent (5%).
In accordance with HRS §103D-1012, to promote the use of biofuels in the State of Hawaii, a preference has been established for the contracts for the purchase of diesel and boiler fuel where biofuel or biofuel blends are bid.
When purchasing fuel for use in diesel engines, the purchasing agency shall provide a preference of five cents ($.05) per gallon of one hundred percent (100%) biodiesel. For blends containing both biodiesel and petroleum-based diesel, the preference shall be applied only to the biodiesel portion of the blend.
When purchasing fuel for use in boilers, the preference shall provide a preference of five cents ($.05) per gallon of one hundred percent (100%) biofuel. For blends containing both biofuel and petroleum-based boiler fuel, the preference shall be applied only to the biofuel portion of the blend.
State agencies and jurisdictions should only award contracts at fair and reasonable prices. Even prices proposed in competitive procurements should be analyzed to ensure the price proposed is fair and reasonable. Analysis of proposed pricing can be accomplished using either price analysis or cost analysis. The determination of price fair and reasonableness along with the method used to analyze the price should be documented in the contract file along with the award determination.
Price analysis is the process of deciding if the proposed price for a product or service is fair and reasonable, without examining the specific cost elements and profit calculations the vendor used in arriving at the price. It involves an evaluation of the prices for the same or similar supplies, services or construction. While there is a formal name for this analysis process it should be noted that almost all Procurement Officers already engage in this process when they analyze competitive bids and award to the lowest-priced bidder. Price analysis always involves a comparison of proposed prices against other known indicators of reasonableness. Examples of price analysis criteria include but are not limited to a comparison of proposed prices with:
Price Analysis must be considered for every procurement and every post-award modification that effects the cost. Price Analysis is conducted to determine whether the price is fair and reasonable. Agencies typically use price analysis whenever they are comparing lump sum prices received from contractors in a competitive pricing situation. In making the analysis, consideration must be given to any differing terms and conditions. Remember to document your determination of fair and reasonable price in your contract file. See HAR 3-122 Subsection 15 and our Basic Pricing Guide for further guidance.
As discussed in the Market Research Section, the Procurement Team’s development of an internal government estimate for the requirement will be invaluable in sole source negotiations or instances where only one bid or proposal is received. This information is useful in comparing the government estimate with the proposed price and determining if the proposed prices received in response to an agency’s solicitation are fair and reasonable.
It is often difficult to find comparable items or services. In these situations, it may be necessary to rely on a more technical approach, that is, a cost analysis, to determine price reasonableness. While time consuming, this is the best method to use when estimating or validating cost in a procurement where competition is lacking. Cost analysis is also mandated in circumstances discussed below.
Cost is the amount paid by the vendor to produce a product or provide a service. Cost analysis is the element-by-element examination of the estimated or actual cost of contract performance to determine the probable cost to the vendor. The goal is to form an opinion on whether the proposed costs are in line with what reasonably economical and efficient performance should cost. Cost analysis is generally used whenever a purchasing agency does not have adequate price competition or when price comparisons are not available due to the specifics of the procurement. In accordance with HRS §103D-312 sets forth the instances when certified cost and pricing data are required to be submitted by the vendor and HAR 3-122 Subchapter 15 discusses cost and price analysis techniques and when it is required.
Cost or pricing data, which shall be provided by the Contractor in instances set forth in HRS §103D-312, are the basis for conducting cost analysis. Such data provides factual information about the costs that the Contractor says may be incurred in performing the contract. Cost analysis should be performed in those situations where price analysis does not yield a fair and reasonable price and where cost data are required in accordance HRS, HAR and/or prime contract clauses.
Cost analysis techniques are used to break down a Contractor’s cost or pricing data so as to verify and evaluate each component. Cost analysis includes the appropriate verification of cost or pricing data, and the use of this data to evaluate:
Evaluations of cost or pricing data should include comparisons of costs and prices of an offeror’s cost estimates with those of other offerors and any independent state price and cost estimates. They must also include consideration of whether the costs are reasonable and allocable under the pertinent pricing principles provisions of HAR 3-123.
HRS §103D-323 and HRS §103D-324 require the purchasing agency to obtain bid security, contract performance bonds and payment bonds from bidders and contractors on certain contracts. The following is a description of each:
Bid Security is required in the following circumstances:
Bid security, when required, shall be in an amount equal to at least five percent (5%) of the base bid and additive alternates or, if applicable, in an amount required by the terms of federal funding. Should a vendor fail to submit the bid security with its bid/offer the bid/offer will be deemed non-responsive.
Contract Performance and Payment Bonds are required in the following circumstances:
All documentation related to the bonds provided to the purchasing agency shall contain the original signatures, signed in ink.
The amounts of the performance and payment bonds, when required, shall be as follows:
Performance and payment bonds shall be delivered by the Contractor to the State at the same time the contract is executed. If the contractor fails to deliver the required performance and payment bonds, the contractor’s award shall be cancelled, the contractor shall be subject to a claim by the State for all resulting damages, its bid security shall be enforced, and award of the contract may be made to the next lowest offeror.
Acceptable bid security and contract performance and payment bonds include:
In accordance with HAR 3-122 Subchapter 4.5, in situations where time or economic situations preclude the use of other methods provided, purchasing agencies may, with the approval of the HOPA, issue a request for interest to select a provider or providers for a federal grant ONLY.
A Request for Interest is a document utilized for soliciting interest in providing goods, services, or construction under a federal grant. Typical content of a Request for Interest includes, but is not limited to the following:
Public notice of the Request for Interest must be made in the same manner as an IFB or RFP, and must include a statement that the purpose of the request is to select a provider or providers for federal grants.
Selection of a provider or providers to provide goods, services or construction under the federal grant is based on the criteria established in the Request for Interest. Notice of the selected provider or providers must be posted to the agency’s applicable notice website. For executive agencies notification shall be posted to the SPO notice website.
Applying for federal funds to provide health and human services does not exempt a purchasing agency from HRS 103F. When federal funds awarded to the state does not specify a specific provider or is not stated in the federal grant award, competitive purchase of service method of procurement shall be used, unless an alternate method is allowed by statute or rule.
If the federal application requires a purchasing agency to describe the use of the funds and in some cases identify the provider(s), the purchasing agency may utilize the RFI process to assess and consider interested applicants for inclusion in the federal grant application prior to applying or receiving the federal funding. Selection of the provider(s) shall be based on the criteria and requirements established in the RFI, or discretion of the HOPA. Written justification for the provider(s) selected shall be included in the procurement file.
Refer to Section 4.6.1.2 for RFI procedures for federal grant applications.
For the competitive sealed proposals (HRS §103D-303 & HAR §3-122-60) and procurement of professional services (HRS §103D-304 & HAR §3-122-70) methods of procurement, non-selected offerors may request a debrief from the purchasing agency. To request a debrief, the non-selected offeror must submit a written request for a debriefing within three (3) working days after posting the public notice of award. The debriefing should be held by the Procurement Officer or designee, within seven (7) working days. If multiple requests have been received, the Procurement Officer or designee may determine whether or not to conduct individual or combined debriefings.
The purpose of the debrief is to inform the non-selected offerors of the basis for the source selection decision and contract award. The debrief is a forum to discuss the unsuccessful offeror’s proposal only. It is not a forum to discuss the submissions of other offerors. It is a best practice to maintain a list of all attendees along with a summary of the debriefing in the contract file.
Procurement officers should ensure best judgement is used when debriefings are conducted to ensure the regulatory purpose of the debrief is met. The following are topics that are not appropriate for a debrief:
An informal request for explanation for award/non-award of a contract can be made for both a restrictive or competitive purchase of services under HRS 103F. An informal request made under this section shall not extend the time period to submit a protest in any way.
The purchasing agency may respond as practicable to informal requests for explanations but the failure to respond to an informal request shall not be grounds for a formal protest or objection.
In accordance with HRS 103D Part VII & HAR 3-126 Subchapter 1, any actual or prospective bidder, offeror, or contractor who is aggrieved in connection with the solicitation or award of a contract may protest to the CPO or a designee as specified in the solicitation. A protest must be submitted in writing within five (5) working days as indicated below.
The protest must contain, at a minimum, the following:
When a protest is received no further action can be taken until the protest has been resolved, unless the CPO makes a written determination, after consulting with the HOPA, that the award of the contract is necessary to protect the substantial interests of the State. The protest and the procurement file must be provided to the CPO, or designee, for review. The CPO, or designee as specified in the solicitation must review the protest and all relevant information and shall render a final decision on the protest. The final decision must be in writing and shall contain, at a minimum, the following information:
Once a final decision has been reached, the protestor must be informed as to whether the protest was denied or sustained.
If the protest is denied, the party protesting shall be informed of the final decision and the right to request an administrative hearing if they disagree with the final decision in accordance with HAR 3-126 Subchapter 5. After consultation with the respective attorney general or corporation counsel, as applicable, if the protest is sustained, the following are potential remedies based on when the protest is made:
Pursuant to HRS §103D-701.5, information on all protests shall be submitted to the State Procurement Office on form SPO-043.
For the Competitive and Restrictive Purchase of Services methods of procurement, allowable protests under HAR §3-148-103 are limited to:
For Competitive Purchase of Services, the Notice of Protest shall be submitted in writing within five (5) working days of the postmark of the notice of findings and decision, or notice of rejection. For Restrictive Procurement of Services, the Notice of Protest must be submitted in writing by the deadline stipulated in the public notice.
The Notice of Protest shall be submitted by U.S. mail or hand delivered and contain the name and address of the applicant, appropriate identification of the solicitation, a statement of reasons for the protest, and evidence regarding the protest. Notices of protest submitted by hand-delivery are deemed to have been submitted when actually received, and protests submitted by United States mail are deemed to have been submitted on the date they are post-marked rather than the date they are actually received.
When a Notice of Protest is received no further action or award can be made until the protest has been settled or resolved, unless the CPO makes a written determination, after consulting with the HOPA, that the award of the contract is necessary to protect the health, safety or welfare of a person from an imminent and serious threat.
Within three (3) working days of receiving a notice of protest, the HOPA or designee shall organize and conduct a settlement and scheduling conference with the protestor and the Procurement Officer in charge of the protested award. The settlement and scheduling conference may be conducted face to face, by telephone conference, or other electronic communications medium. At a minimum, the conference must address the following topics:
If the protest cannot be resolved by mutual agreement the HOPA or designee shall issue a Scheduling Order (form SPOH-803) for the Executive Branch setting the deadlines for the following:
To the extent practicable, the submission of protests, responses, requests for clarification, and replies should be completed within ten (10) working days. Subsequently, if applicable, the written decision by the HOPA shall be issued within five (5) working days, unless extended in writing.
If the applicant determines there is need to continue the protest process, the applicant shall submit a formal written protest (form SPOH-806) to the HOPA and the Procurement Officer of the purchasing agency by the date provided in the Scheduling Order. Protests shall be hand-delivered or sent by U.S. mail. Upon receipt of the formal protest the purchasing agency shall respond to the protest (form SPOH-807) by the date provided in the Scheduling Order. An applicant can then choose to reply, if necessary, (form SPOH-808), submitting the reply to the HOPA by the date provided in the Scheduling Order.
The HOPA will then review all documentation available and come to a decision regarding the protest. Refer to HAR Chapter 3-148 for form, contents, and submission requirements for protests, responses, and decision by the HOPA.
Protests shall be settled by mutual agreement or resolved only by the following methods, singularly or in any combination:
After receipt of the HOPA’s decision regarding the protest, the applicant may submit a Request for Reconsideration (form SPOH-810) to the CPO within five (5) working days after the receipt of the HOPA’s decision. The CPO will review all information and make a final decision within fifteen (15) calendar days of the receipt of the request for reconsideration, unless the CPO determines that an extension to a certain date is necessary and gives written notice of the extended deadline to the parties.
Every decision issued in resolution of a protest shall be in writing, and at a minimum, shall contain the following:
Copies of the decision shall be submitted to the protestor, the Procurement Officer in charge of the protested procurement and the HOPA.