Legislature proposes welfare for losing contractors

One of the more puzzling bills still alive in this year’s Legislature is HB 985, which allows the state to pay a “conceptual design fee” to some losing bidders on state contracts.

An amended version passed the Senate this week with only Sens. Donna Mercado Kim and Sam Slom objecting.

There have always been risks inherent in bidding on public works jobs, and there’s no legitimate public purpose in needlessly running up the cost of state contracts by paying off unsuccessful bidders for the cost of preparing their bids.

Rather, it seems a blatant attempt by lawmakers to give more of their political campaign donors a taste of the action at taxpayer expense — and at a time when the state is strapped for cash and others are in far greater need of a helping hand.

Hopefully this stinker will die in conference committee, where it’s headed after the House disagreed with Senate amendments.


Matt Levi is back on TV with a new series, “Hawaii Investigates.”

The first show, which looks into problems at the Hawai‘i Youth Correctional Facility, made its debut last night on KGMB and repeats at 6:30 tonight on KHNL.

Levi, a private investigator and former investigative reporter, first took cameras into HYCF 26 years ago and returns to talk to staff, young offenders and judges to see if conditions have improved.

The good news, he reports, is that there’s been significant improvement in both philosophy and management — especially since the federal government threatened to shut down the facility in 2005.

The bad news, Levi says, is that the issues with many of those incarcerated aren’t fundamentally criminal in nature, but the kids remain there at a cost of $131,000 per year because the courts have few viable — and cheaper — treatment options available.

“Hawaii Investigates” is produced by Hawaii Reporter.

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10 Comments on “Legislature proposes welfare for losing contractors”

  1. Capitol -ist/WassupDoc Says:


    Please clarify the following:

    but the kids remain there at a cost of $131,000 per year

    Is that the sum total for running the facility or does the $131,000 refer to the cost per bed?

  2. Manoa Kahuna Says:

    Could you please put a dateline on your posts. When is “tonight”?

  3. David Shapiro Says:

    Kahuna, the date posted is at the top of each post on the home page or at the bottom if you’re looking at the individual posts. Tonight is Friday, April 15.

    Cap, I heard $131,000 per kid per year.

  4. Kolea Says:

    Depending on the details, the idea of reimbursing contractors at least a portion of their costs for preparing a bid is not unreasonable, nor is it contrary to the public’s interest.

    For a large project, the costs can easily be in the tens, even hundreds of millions of dollars. A prospective bidder has to evaluate taking on those costs versus the probability of getting the contract. If a contractor suspects another contract has a sweetheart relationship with the state agency awarding the contract, perhaps due to campaign contributions to elected officials, they will be more likely to NOT incur the costs of bid preparation, thereby contributing to the perception, and perhaps the reality, that campaign donation are necessary if one wants to get fair treatment. I suggest the actual effect of such a bill would be to undermine tendencies towards cronyism rather than strengthen them.

    Obviously, you would not want to make the process of preparing a bid a moneymaker for contractors. But a partial reimbursement for such costs is likely to result in the state receiving more bids, increasing the competition.

    So I think the idea of reimbursing a portion of the costs is reasonable in principle. The debate should focus on the level of reimbursement.

    Of course, the probability of passing such a bill in these tight economic times is extremely low. And an elected official has to weigh the political costs of supporting such a measure against the probability such a bill would actually pass. So it will die.

    But not, IMO, because it “a blatant attempt by lawmakers to give more of their political campaign donors a taste of the action at taxpayer expense.”

  5. Kolea Says:

    EDIT: I had meant to write:

    “For a large project, the costs can easily be in the tens, even hundreds of THOUSANDS of dollars.”

  6. Michael Says:

    Bring back deportation of Criminals that are not American citizens or immigrants who are sponsored or on visas that do crime. Seems a free ride in life for many immigrants to come to Hawaii and America, do a crime and live with 3 meals a day and shelter while many born and raised here or immigrants who took time to become American Citizens live homeless.

    Second: Instead of charging tax payers dollars to keep drug addicts in prison, make the families take the burden to keep their family members. Then they will be stricter and keep their family in line. Any crime done, the family should suffer the cost not innocent people who pay taxes and are aware of the law and follow it. If I do a crime for example let my family pay for my being in prison. Make inmates work to pay for their rent.

    How much would we save if we went green? Electriciy versus keeping a criminal in prison.
    Just my opinion.

  7. WooWoo Says:


    That is a ridiculous stretch. Private sector projects get lots of bidders and they don’t pay off the losers. I’d love to see some of these legislators open their own business where they can test the theory of bringing down prices by paying losing bidders.

  8. Kolea Says:


    I think Dave’s original claim that this is ““a blatant attempt by lawmakers to give more of their political campaign donors a taste of the action at taxpayer expense,” is a much greater stretch. YThere is no question that potential bidders need to factor in the cost of preparing a bid against their assessment of the probability they will get the contract. That part is no stretch.

    It logically follows that reducing the cost of bid preparation will result in a larger pool of bidders.

    You can argue that the cost of submitting bids, with th understanding the bids might fail, is a means of “pre-qualifying” bidders, as only the largest firms will be able to absorb such expenses.

    But Dave’s reflexive cynicism does not make sense, unless he assumes all potential contractors are cronies of the politicians. Which kinda dilutes the meaning of “crony” if you have to expand it to include such a broad category. The bill could be accused of providing benefits to the broad class of potential government contractors, but not to “cronies.”

    The proposal may not make sense for other reasons, but Dave’s rationale says more about his cynicism than the actual merits (or not) of the bill.

  9. el guapo Says:

    All companies get the job specifications, determine the number of hours and/or cost of materials needed, and put their proposals together. They should have this down to a science and is a cost of doing business.

    If these contractors want to get money from the state, then they should put in lower bids and win the contract.

    According to the measure history, this great piece of legislation was introduced by MCKELVEY, Chong, Keith-Agaran, Souki, Yamashita.

  10. Michael Says:

    “Hawaii Investigates” Good show but it looked like old footage. I feel the correctional center after watching show, should be run by the Military and the inmates trained like in Boot Camp. If the inmate wants to change their lives, go through Boot Camp training and join the Military. Learn a trade in the different branches of service. I see that a Vietnam Vet ran the center or is running it. No easy way out. Either stay in the correctional center or join the military and start life all over again.

    A child can change if they wanted to. “Bureaucratic standards” for the reason because their parents did this or that to them. One wants the easy life of prison is by their choice.

    Mat looks the same as he did while reporting for KGMB9. Then it was news not now.

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