Bill > SB2075

This bill establishes a five percent "local preference" for qualified Hawaii businesses bidding on state contracts, meaning their bids will be evaluated as if they were five percent lower. To qualify, a business must have a physical presence in Hawaii for at least two consecutive years and meet other criteria to be considered a "Hawaii bidder" or "Hawaii offeror," with specific definitions provided for these terms. This preference applies only when a Hawaii business competes against a non-Hawaii business, not between two Hawaii businesses, and has a cap of $500,000 on the total preference amount and is limited to contracts under $10,000,000, unless federal funding restrictions prevent it. Businesses receiving this preference must certify that at least 51% of the direct labor hours for the contract will be performed in the state and that they will maintain their qualification throughout the contract. The procurement officer will verify eligibility before awarding the contract, and failure to maintain qualification can lead to price adjustments or debarment, which is a prohibition from bidding on future state contracts. The bill also clarifies that making false statements to obtain this preference is a cause for debarment and requires the Procurement Policy Board to create rules for implementing and verifying these preferences, including standardized forms, verification procedures, and audit processes. This new local preference program is distinct from existing provisions for "Hawaii products" and will take effect on July 1, 2026.