by Christi-Anne H. Kudo Chock
By the end of March 2011, the City and County of Honolulu had awarded contracts totaling nearly $2.5 billion in connection with the Honolulu High-Capacity Transit Corridor Project (i.e. rail project). With so much money on the line, it is not surprising that some of these awards are currently being challenged. Local news outlets have reported heavily on these “bid protests,” including two recent challenges brought against the City’s award of a contract to design, build, operate, and maintain the system control center and rail cars for the project. The protesting entities, competitors of the company that was awarded the City contract, had also submitted their own proposals. They claim, among other things, that the City failed to adhere to applicable law in awarding the contract.
Generally speaking, the Hawaii Public Procurement Code, Haw. Rev. Stat. Ch. 103D, governs “all procurement contracts made by governmental bodies[.]” This includes when the state or municipal government buys, purchases, or otherwise awards contracts for construction using public funds.
Typically, the governmental body will solicit offers for construction contracts by issuing either an invitation for bids or a request for proposals. Then, sealed bids or proposals are submitted by interested parties, and the contract is ultimately awarded based on the criteria set forth in the invitation or request. Where bids are solicited, the contract is awarded “to the lowest responsible and responsive bidder[.]” For proposals, the contract is awarded “to the responsible offeror whose proposal is determined in writing to be the most advantageous taking into consideration price and the evaluation factors set forth in the request for proposals.” The law also provides a mechanism by which actual or prospective bidders who are aggrieved in connection with the solicitation or award of a procurement contract may formally challenge, or protest, the award.
The Procurement Code is intended as a measure to promote competition for government contracts and, thereby, ensure that goods and services to be paid for with taxpayer funds are obtained at optimal prices. However, the procurement law (which includes bid protests like these) may sometimes result in a protracted process that may require the unwanted expenditure of additional time and resources. That being said, with taxpayer dollars up for grabs, it is important that the Procurement Code be consistently followed and evenly applied.
