Bill
GM 1308
Creates the State Procurement Automation Special Fund, funded by vendor fees and appropriations, to run and upgrade Hawaii's procurement system and align governance across agencies.
Overview
GM1308 communicates that on June 25, 2025, the Governor signed HB987, HD1, SD1, CD1 into law as Act 206. The bill focuses on modernizing and funding the State’s procurement automation system and aligning procurement governance across state entities, including the School Facilities Authority (SFA).
Purpose and Intent
- Modernize procurement processes to improve efficiency, consistency, and data accuracy.
- Create a dedicated funding mechanism to support the procurement automation system’s administration, operation, maintenance, and upgrades.
- Align procurement leadership for the School Facilities Authority with the Hawaii Public Procurement Code.
Key Provisions
1) Establishment of the State Procurement Automation System Special Fund
- A new fund (State Procurement Automation Special Fund) would be established within the State Treasury, administered by the State Procurement Office.
- Sources of funding:
- Vendor-collected transaction fees from the procurement automation system (per section 103D-206(7)).
- Legislative appropriations to the fund.
- Uses of the fund:
- Administration, management, operation, maintenance, and upgrade of the procurement automation system (including Marketplace and eProcurement modules) and related system expansion.
- Purpose: Ensure the system remains current with industry standards and supports ongoing improvements.
2) Governance and Chief Procurement Officer (CPO) Designations
- The executive director of the School Facilities Authority would be designated as the chief procurement officer for the SFA.
- The State Procurement Office administrator would serve as the chief procurement officer for the executive branch bodies listed (including the Senate, House, Judiciary, Office of Hawaiian Affairs, University of Hawaii, Department of Education, Hawaii Health Systems Corporation, and SFA).
- This aligns the governance structure of procurement across major state entities.
3) Administration and Staffing Details
- The State Procurement Office administrator would be a full-time public official serving a four-year term.
- Salary: not to exceed 87% of the salary of the Director of Human Resources Development.
- The act clarifies the administrator’s role as the COP for the listed entities.
4) Repeals/Conforming Amendments
- The act makes targeted amendments to Hawaii Revised Statutes (Chapter 103D) to reflect the new fund, the COP designations, and related administrative provisions.
- Certain sections are restated or stricken to implement the changes.
Effectiveness and Timing
- Effective upon approval of Act 206 (June 25, 2025).
- The procurement automation system’s vendor transaction fees and related dynamics are addressed going forward, with the new fund intended to provide ongoing financial support for system enhancements and maintenance.
Who is Affected
- State procurement entities and agencies within the executive branch.
- The State Procurement Office (administrative implementation and fund management).
- The School Facilities Authority (through its designated COP role).
- Vendors using the procurement automation system (subject to transaction fees deposited into the new fund).
Notes
- The bill references estimated general fund savings of about $1.2 million annually from the procurement automation system.
- The legislation restores a dedicated fund mechanism that previously existed only as vendor-held fees, granting the state direct control over related revenues and expenditures.
Compiled from official sources — confirm details with the bill’s official record.
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