Legal and Contractual Remedies

HRS div. 1, tit. 9, ch. 103D, pt. VII

in effect

HRS §103D-701 Authority to resolve protested solicitations and awards

103D-701. Authority to resolve protested solicitations and awards (a) 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 chief procurement officer or a designee as specified in the solicitation. Except as provided in sections 103D-303 and 103D-304, a protest shall be submitted in writing within five working days after the aggrieved person knows or should have known of the facts giving rise thereto; provided that a protest of an award or proposed award shall in any event be submitted in writing within five working days after the posting of award of the contract under section 103D-302 or 103D-303, if no request for debriefing has been made, as applicable; provided further that no protest based upon the content of the solicitation shall be considered unless it is submitted in writing prior to the date set for the receipt of offers. (b) The chief procurement officer or a designee, prior to the commencement of an administrative proceeding under section 103D-709 or an action in court pursuant to section 103D-710, may settle and resolve a protest concerning the solicitation or award of a contract. This authority shall be exercised in accordance with rules adopted by the policy board. (c) The chief procurement officer or a designee shall resolve any protest as expeditiously as possible. If the protest is not resolved by mutual agreement, the chief procurement officer or a designee shall issue a written decision to uphold or deny the protest. The decision shall: (1) State the reasons for the action taken; and (2) Inform the protestor of the protestor's right to an administrative proceeding as provided in this part, if applicable. If the protest of a construction contract or airport contract that is awarded pursuant to section 103D-302 or 103D-303 is not resolved by mutual agreement, the chief procurement officer or a designee shall issue a written decision to uphold or deny the protest within seventy-five calendar days of receipt of the protest; provided that the chief procurement officer or a designee may grant an extension based on written justification of the extenuating circumstances; provided further that the extension shall not exceed forty-five calendar days. (d) A copy of the decision under subsection (c) shall be mailed or otherwise furnished immediately to the protestor and any other party intervening. (e) A decision under subsection (c) shall be final and conclusive, unless any person adversely affected by the decision commences an administrative proceeding under section 103D-709. (f) In the event of a timely protest under subsection (a), no further action shall be taken on the solicitation or the award of the contract until the chief procurement officer makes a written determination that the award of the contract without delay is necessary to protect substantial interests of the State. (g) In addition to any other relief, when a protest is sustained and the protestor should have been awarded the contract under the solicitation but is not, then the protestor shall be entitled to the actual costs reasonably incurred in connection with the solicitation, including bid or proposal preparation costs but not attorney's fees. [L Sp 1993, c 8, pt of §2; am L 1997, c 352, §23; am L 1999, c 162, §1; am L 2003, c 52, §7; am L 2021, c 224, §2]

HRS §103D-701.5 Procurement statistics

103D-701.5. Procurement statistics The state procurement office shall keep statistics on solicitations and awards protested under section 103D-701 for the purpose of improving procurement procedures. The statistics shall include information on protests involving inadvertent errors. L 2012, c 173, §1

HRS §103D-702 Authority to debar or suspend

103D-702. Authority to debar or suspend (a) After reasonable notice to the person involved and reasonable opportunity for that person to be heard, the chief procurement officer, after consultation with the using agency and the attorney general or corporation counsel, may debar a person for cause from consideration for award of all public contracts and from performance on any public contract. The serious nature of debarment and suspension requires that these sanctions be imposed only in the public interest for a governmental body's protection and not for the purpose of punishment. An agency shall impose debarment or suspension to protect a governmental body's interests and only for cause and in accordance with this section. The debarment period shall not exceed three years. The same officer, after consultation with the using agency and the attorney general or corporation counsel, may suspend a person from consideration for award of all public contracts and from performance on any public contract if there is probable cause for debarment. The suspension period shall not exceed three months. The authority to debar or suspend shall be exercised in accordance with the procedures prescribed by rules adopted by the policy board and shall be applied only to causes, convictions, and violations under subsection (b) after the effective date of the rules adopted by the policy board. (b) The causes for debarment or suspension include the following: (1) Conviction for commission of a criminal offense as an incident to obtaining or attempting to obtain a public or private contract or subcontract, or in the performance of the contract or subcontract; (2) Conviction under state or federal statutes relating to embezzlement, theft, forgery, bribery, falsification or destruction of records, receiving stolen property, or any other offense indicating a lack of business integrity or business honesty which currently, seriously, and directly affects responsibility as a contractor; (3) Conviction under state or federal antitrust statutes arising out of the submission of bids or proposals; (4) Violation of contract provisions, as set forth below, of a character that is regarded by the chief procurement officer to be so serious as to justify debarment action: (A) Deliberate failure without good cause to perform in accordance with the specifications or within the time limit provided in the contract; or (B) A recent record of failure to perform or of unsatisfactory performance in accordance with the terms of one or more contracts; provided that failure to perform or unsatisfactory performance caused by acts beyond the control of the contractor shall not be considered to be a basis for debarment; (5) Any other cause the chief procurement officer determines to be so serious and compelling as to affect responsibility as a contractor, including debarment by another governmental entity for any cause listed in the rules of the policy board; and (6) Violation of the ethical standards set forth in chapter 84 and its implementing rules, or the charters and ordinances of the several counties and their implementing rules. (c) The existence of a cause for debarment does not necessarily require that a contractor be debarred. The seriousness of a contractor's acts or omissions and any remedial measure or mitigating factors shall be considered in making any debarment decision. Before arriving at any debarment decision, the chief procurement officer shall consider factors such as the following: (1) Whether the contractor had effective standards of conduct and internal control systems in place at the time of the activity constituting cause for debarment or had adopted those procedures prior to any government investigation of the activity cited as the cause for debarment; (2) Whether the contractor brought the activity cited as the cause for debarment to the attention of the appropriate government agency in a timely manner; (3) Whether the contractor fully investigated the circumstances surrounding the cause for debarment and made the result of the investigation available to the chief procurement officer; (4) Whether the contractor cooperated fully with government agencies during the investigation and any court or administrative action; (5) Whether the contractor has paid or has agreed to pay all criminal, civil, and administrative liability for improper activity, including any investigative or administrative costs incurred by the governmental body, and has made or has agreed to make full restitution; (6) Whether the contractor has taken appropriate disciplinary action against the individuals responsible for the activity constituting the cause for debarment; (7) Whether the contractor has implemented or agreed to implement remedial measures, including any identified by the governmental body or the chief procurement officer; (8) Whether the contractor has instituted or agreed to institute new or revised review and control procedures and ethics training programs; (9) Whether the contractor has had adequate time to eliminate the circumstances within the contractor's organization that led to the cause for debarment; and (10) Whether the contractor's management recognizes and understands the seriousness of the misconduct giving rise to the cause for debarment and has implemented programs to prevent its recurrence. The existence or nonexistence of any mitigating factors or remedial measures such as those set forth in this subsection shall not necessarily be determinative of a contractor's present responsibility. If a cause for debarment exists, the contractor has the burden of demonstrating to the satisfaction of the chief procurement officer the contractor's present responsibility and that debarment is not necessary. (d) The chief procurement officer shall issue a written decision to debar or suspend. The decision shall: (1) State the reasons for the action taken; and (2) Inform the debarred or suspended person involved of the person's rights to review as provided in this part. (e) A copy of the decision under subsection (d) shall be mailed or otherwise furnished immediately to the debarred or suspended person and any other party intervening. (f) The chief procurement officer shall transmit a copy of the decision to debar or suspend a contractor to the state procurement office, which shall distribute a list to all governmental bodies containing the names of persons or firms debarred or suspended from consideration for award of all public contracts and from performance on any public contract. (g) Upon written notification under subsection (f), the chief procurement officer shall make a written determination whether to allow the debarred or suspended person or firm to continue performance on any contract awarded prior to the effective date of the debarment or suspension. (h) A decision under subsection (d) shall be final and conclusive, unless the debarred or suspended person commences an administrative proceeding under section 103D-709. [L Sp 1993, c 8, pt of §2; am L 1997, c 352, §23; am L 1999, c 162, §2; am L 2004, c 216, §2]

HRS §103D-703 Authority to resolve contract and breach of contract controversies

103D-703. Authority to resolve contract and breach of contract controversies (a) This section applies to controversies between a governmental body and a contractor which arise under, or by virtue of, a contract between them, including, without limitation, controversies based upon breach of contract, mistake, misrepresentation, or other cause for contract modification or rescission. (b) The chief procurement officer or a designee is authorized, prior to commencement of an action in a court brought pursuant to section 103D-711, to settle and resolve a controversy described in subsection (a). This authority shall be exercised in accordance with rules adopted by the policy board. (c) If such a controversy is not resolved by mutual agreement, the chief procurement officer or a designee shall promptly issue a decision in writing. The decision shall: (1) State the reasons for the action taken; and (2) Inform the contractor of the contractor's right to initiate a judicial action as provided in this part. (d) A copy of the decision under subsection (c) shall be mailed or otherwise furnished immediately to the contractor. (e) The decision under subsection (c) shall be final and conclusive unless the contractor commences a judicial action in accordance with section 103D-711. (f) If the chief procurement officer or a designee does not issue the written decision required under subsection (c) within ninety days after written request for a final decision, or within such longer period as may be agreed upon by the parties, then the contractor may proceed as if an adverse decision had been received. [L Sp 1993, c 8, pt of §2; am L 1997, c 352, §23; am L 1999, c 162, §3]

HRS §103D-703.5 Settlement of default by contractor

103D-703.5. Settlement of default by contractor Upon default of a contractor, the purchasing agency may accept moneys in satisfaction of the contractor's obligation on a contract whether the moneys are realized from the performance surety's obligation on its bond, an insurer's obligation on the contractor's policy, or any other source of moneys paid to satisfy a contractor's default. Such moneys shall be deemed to be trust moneys and shall be deposited into a trust account with and under the control of the purchasing agency. These moneys and the interest earned thereon shall be used for the completion of such contract. Upon completion of the contract, any excess moneys shall be deposited in the general fund unless otherwise restricted. [L 1997, c 167, §1; am L 1999, c 149, §17]

HRS §103D-704 Exclusivity of remedies

103D-704. Exclusivity of remedies The procedures and remedies provided for in this part, and the rules adopted by the policy board, shall be the exclusive means available for persons aggrieved in connection with the solicitation or award of a contract, a suspension or debarment proceeding, or in connection with a contract controversy, to resolve their claims or differences. The contested case proceedings set out in chapter 91 shall not apply to protested solicitations and awards, debarments or suspensions, or the resolution of contract controversies. [L Sp 1993, c 8, pt of §2; am L 1997, c 352, §23]

HRS §103D-705 Solicitations or awards in violation of law

103D-705. Solicitations or awards in violation of law The provisions of section 103D-706 and section 103D‑707 apply where it is determined by the chief procurement officer or a designee under section 103D-701 or 103D-703 or where it is determined administratively under section 103D-709, or upon judicial review under section 103D-710 or judicial action under section 103D-711, that a solicitation or award of a contract is in violation of the law. [L Sp 1993, c 8, pt of §2; am L 1999, c 162, §4]

HRS §103D-706 Remedies prior to an award

103D-706. Remedies prior to an award If prior to award it is determined that a solicitation or proposed award of a contract is in violation of law, then the solicitation or proposed award shall be: (1) Canceled; or (2) Revised to comply with the law. [L Sp 1993, c 8, pt of §2]

HRS §103D-707 Remedies after an award

103D-707. Remedies after an award (a) If after an award it is determined that a solicitation or award of a contract is in violation of law, then: (1) If the person awarded the contract has not acted fraudulently or in bad faith: (A) The contract may be ratified and affirmed, or modified; provided that it is determined that doing so is in the best interests of the State; or (B) The contract may be terminated and the person awarded the contract shall be compensated for the actual expenses, other than attorney's fees, reasonably incurred under the contract, plus a reasonable profit, with such expenses and profit calculated not for the entire term of the contract but only to the point of termination; (2) If the person awarded the contract has acted fraudulently or in bad faith: (A) The contract may be declared null and void; or (B) The contract may be ratified and affirmed, or modified, if the action is in the best interests of the State, without prejudice to the State's rights to such damages as may be appropriate. (b) If the award of the contract was made in violation of law, and the award is rescinded and the contract, if executed, is terminated or declared null and void, then: (1) For solicitations issued pursuant to section 103D-302, the contract may be awarded to the next lowest responsive and responsible bidder; provided that all prices remain the same as originally bid; or (2) For solicitations issued pursuant to section 103D-303, the contract may be awarded to the next responsive and responsible offeror whose proposal is determined in writing to be the next most advantageous, taking into consideration the evaluation factors set forth in the solicitation; provided that all prices remain the same as originally offered. [L Sp 1993, c 8, pt of §2; am L 1999, c 162, §5; am L 2022, c 180, §1]

HRS §103D-708 Interest

103D-708. Interest Interest on amounts ultimately determined to be due to a contractor or the governmental body shall be payable at the statutory rate applicable to judgments against the State under chapter 662 from the date the governmental body receives notice of the written claim through the date of decision or judgment, whichever is later; except that if an action is initiated in circuit court pursuant to section 103D-711, interest under this section shall only be calculated until the time such action is initiated. [L Sp 1993, c 8, pt of §2; am L 1999, c 162, §6]

HRS §103D-709 Administrative proceedings for review

103D-709. Administrative proceedings for review (a) The several hearings officers appointed by the director of the department of commerce and consumer affairs pursuant to section 26-9(f) shall have jurisdiction to review and determine de novo, any request from any bidder, offeror, contractor, or person aggrieved under section 103D-106, or governmental body aggrieved by a determination of the chief procurement officer, head of a purchasing agency, or a designee of either officer under section 103D-310, 103D-701, or 103D-702. (b) Hearings to review and determine any request made pursuant to subsection (a) shall commence within twenty-one calendar days of receipt of the request. The hearings officers shall have power to issue subpoenas, administer oaths, hear testimony, find facts, make conclusions of law, and issue a written decision, not later than forty-five days from the receipt of the request under subsection (a), that shall be final and conclusive unless a person or governmental body adversely affected by the decision commences an appeal in the circuit court of the circuit where the case or controversy arises under section 103D-710. (c) Only parties to the protest made and decided pursuant to sections 103D-701, 103D-709(a), 103D-310(b), and 103D-702(g) may initiate a proceeding under this section. The party initiating the proceeding shall have the burden of proof, including the burden of producing evidence as well as the burden of persuasion. The degree or quantum of proof shall be a preponderance of the evidence. All parties to the proceeding shall be afforded an opportunity to present oral or documentary evidence, conduct cross-examination as may be required, and present argument on all issues involved. Fact finding under section 91-10 shall apply. (d) Any bidder, offeror, contractor, or person that is a party to a protest of a solicitation or award of a contract under section 103D-302 or 103D-303 that is decided pursuant to section 103D-701 may initiate a proceeding under this section; provided that: (1) For contracts with an estimated value of less than $1,000,000, the protest concerns a matter that is greater than $10,000; or (2) For contracts with an estimated value of $1,000,000 or more, the protest concerns a matter that is equal to no less than ten per cent of the estimated value of the contract. (e) The party initiating a proceeding falling within subsection (d) shall pay to the department of commerce and consumer affairs a cash or protest bond in the amount of one per cent of the estimated value of the contract. The cash or protest bond shall be returned to that party, minus administrative costs as determined by the office of administrative hearings of the department of commerce and consumer affairs; provided that full forfeiture of the cash or protest bond shall occur if the initiating party does not prevail in the administrative proceeding and the office of administrative hearings finds that the appeal was frivolous or made in bad faith, in which case the cash or protest bond shall be deposited into the general fund. (f) In addition to the bond required in subsection (e), the initiating party shall pay to the department of commerce and consumer affairs a non-refundable filing fee of: (1) $200 for a contract with an estimated value of $500,000 or more, but less than $1,000,000; or (2) $1,000 for a contract with an estimated value of $1,000,000 or more. Failure to pay the filing fee shall result in the rejection or dismissal of the request for review. The fee shall be deposited into the compliance resolution fund established pursuant to section 26-9(o) and used to help defray the costs of conducting the administrative proceeding for review. (g) The hearings officers shall ensure that a record of each proceeding which includes the following is compiled: (1) All pleadings, motions, and intermediate rulings; (2) Evidence received or considered, including oral testimony, exhibits, and a statement of matters officially noticed; (3) Offers of proof and rulings thereon; (4) Proposed findings of fact; (5) A recording of the proceeding which may be transcribed if judicial review of the written decision is sought under section 103D-710. (h) No action shall be taken on a solicitation or an award of a contract while a proceeding is pending, if the procurement was previously stayed under section 103D-701(f). (i) The hearings officer shall decide whether the determinations of the chief procurement officer or the chief procurement officer's designee were in accordance with the Constitution, statutes, rules, and the terms and conditions of the solicitation or contract and shall order such relief as may be appropriate in accordance with this chapter. (j) The policy board shall adopt other rules as may be necessary to ensure that the proceedings conducted pursuant to this section afford all parties an opportunity to be heard. (k) As used in this section, "estimated value of the contract" or "estimated value", with respect to a contract, means the lowest responsible and responsive bid under section 103D-302, or the bid amount of the responsible offeror whose proposal is determined in writing to be the most advantageous under section 103D-303, as applicable. [L Sp 1993, c 8, pt of §2; am L 1997, c 352, §23; am L 1999, c 162, §7; am L 2001, c 251, §2; am L 2007, c 142, §2; am L 2009, c 175, §§9, 14(2); am L 2010, c 107, §1; am L 2012, c 173, §§3, 5; am L 2019, c 73, §2; am L 2021, c 224, §3; am L 2024, c 162, §1]

HRS §103D-710 Judicial review

103D-710. Judicial review (a) Only parties to proceedings under section 103D-709 who are aggrieved by a final decision of a hearings officer under that section may apply for judicial review of that decision. The proceedings for review shall be instituted in the circuit court of the circuit where the case or controversy arises. (b) An application for judicial review shall not operate as a stay of the decision rendered under section 103D-709. (c) Within ten calendar days of the filing of an application for judicial review, the hearings officer shall transmit the record of the administrative proceedings to the circuit court of the circuit where the case or controversy arises. (d) The review shall be scheduled as expeditiously as practicable. It shall be conducted on the record of the administrative proceedings, and briefs and oral argument. No new evidence shall be introduced, except that the circuit court may, if evidence is offered which is clearly newly discovered evidence and material to the just decision of the appeal, admit the same. (e) No later than thirty days from the filing of the application for judicial review, based upon review of the record the circuit court may affirm the decision of the hearings officer issued pursuant to section 103D-709 or remand the case with instructions for further proceedings; or it may reverse or modify the decision and order if substantial rights may have been prejudiced because the administrative findings, conclusions, decisions, or orders are: (1) In violation of constitutional or statutory provisions; (2) In excess of the statutory authority or jurisdiction of the chief procurement officer or head of the purchasing agency; (3) Made upon unlawful procedure; (4) Affected by other error of law; (5) Clearly erroneous in view of the reliable, probative, and substantial evidence on the whole record; or (6) Arbitrary, or capricious, or characterized by abuse of discretion or clearly unwarranted exercise of discretion; provided that if an application for judicial review is not resolved by the thirtieth day from the filing of the application, the court shall lose jurisdiction and the decision of the hearings officer shall not be disturbed. All time limitations on actions, as provided for in section 103D-712, shall remain in effect. (f) Any party aggrieved by the decision of the circuit court may appeal in accordance with part I of chapter 641 and the appeal shall be given priority. [L Sp 1993, c 8, pt of §2; am L 1999, c 162, §8; am L 2001, c 251, §3; am L 2009, c 175, §§10, 14(2); am L 2010, c 107, §1; am L 2012, c 173, §§4, 5]

HRS §103D-711 Judicial action

103D-711. Judicial action (a) Only parties to the contract aggrieved by a decision issued pursuant to section 103D-703 by a state chief procurement officer or a designee may initiate an action under section 661-1. (b) A person aggrieved by a decision issued pursuant to section 103D-703 by a county chief procurement officer or a designee may initiate an action under, or by virtue of, the contract in controversy in the circuit court. (c) A governmental body aggrieved by a decision issued pursuant to section 103D-703 by a state or county chief procurement officer or a designee may initiate an action under, or by virtue of, the contract in controversy in the circuit court. (d) To the extent the remedies provided in this part, including provisions for interest, differ from the remedies available against the State under chapter 661, the remedies shall be as provided in this part. Only the attorney general may settle and resolve a matter filed in the courts against the State pursuant to this section. [L Sp 1993, c 8, pt of §2; am L 1999, c 162, §9]

HRS §103D-712 Time limitations on actions

103D-712. Time limitations on actions (a) Requests for administrative review under section 103D-709 shall be made directly to the office of administrative hearings of the department of commerce and consumer affairs within seven calendar days of the issuance of a written determination under section 103D-310, 103D-701, or 103D-702. (b) Requests for judicial review under section 103D-710 shall be filed in the circuit court of the circuit where the case or controversy arises within ten calendar days after the issuance of a written decision by the hearings officer under section 103D-709. (c) Complaints to initiate judicial actions under section 103D-711 shall be filed in the circuit court within six months of the issuance of a written determination under section 103D-703. [L Sp 1993, c 8, pt of §2; am L 1999, c 162, §10; am L 2001, c 251, §4]

HRS §103D-713 Defense of a governmental body

103D-713. Defense of a governmental body (a) No contract of less than $1,000,000 that is entered into on or after July 1, 2007, by any governmental body, and is exclusively for services that may only lawfully be provided by a person licensed under chapter 464, may require the contractor to defend the governmental body, or its officers, employees, or agents, from any liability, damage, loss, or claim, action, or proceeding arising out of the contractor's performance under the contract. (b) Subsection (a) notwithstanding, the contract may require the contractor providing the services to indemnify and hold harmless the governmental body and its officers, employees, and agents from and against any liability, damage, loss, cost, and expense, including reasonable attorneys' fees, and all claims, suits, and demands therefor arising out of or resulting from the negligent, reckless, intentional, or wrongful acts, errors, or omissions of the contractor, the contractor's employees, officers, agents, or subcontractors in the performance of the contract or the contractor's professional services, and the provisions may remain in full force and effect notwithstanding the expiration or early termination of the contract. (c) No person licensed under chapter 464 that has agreed in any contract to defend a governmental body, including those contracts entered into before or after July 1, 2007, shall be required to defend the governmental body in a lawsuit filed more than ten years beyond the substantial completion of the project, except that this subsection shall not apply to any lawsuit that has been filed prior to July 1, 2007. (d) As used in this section, "person" means any person, partnership, corporation, or other entity conducting business in the State. [L 2007, c 246, §2]

Source: Hawaii State Legislature (capitol.hawaii.gov), via Internet Archive capturesURL: http://www.capitol.hawaii.gov/hrscurrent/Vol02_Ch0046-0115/HRS0103D/HRS_0103D-.htmFetched: 11/10/2026