2010-10-22 Cost of Government Commission Minutes

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automatic stay, that within itself can generate another protest. And then it would be frozen again. Some protests have resulted in lack of services being held up because you can protest, you go to the hearing’s officer, decision making level in Honolulu. Then it goes to Circuit Court, then it goes to Supreme Court. So, a protest, a simple protest of a purchase like tires, $15 tire, or whatever, can be held up and end up costing several thousand dollars in litigation fees. Not really though. Attorney’s get paid the same so it doesn’t cost the county that much but, as far as time wise, it costs a lot. It costs a lot for discovery and for flying to Honolulu and such. But what the main thing it does is it holds up any procurement of the item or of the service. So, in some cases like we had one for cleaning storm drains, because that thing was held up, county storm drains were not cleaned for about a year and a half. And of course, as things build up, it doesn’t stop the debris from building up so the next year your costs are even higher. So, that’s a procurement protest, but it can go all the way up to Supreme Court. And it’s an automatic stay. That’s the hard part about it. It really doesn’t concern you folks so much but because there is so much protest, a lot of them are really unfounded and when times get hard, people start using it as a tactic. Small guys can’t last that long, but big guys can fight out, survive on their research for a long time. Now what they built into the law as of a year and a half ago was that if somebody wants to file a protest, they have to put a bond. So, if they lose, then they lose their bond. So they can’t just willy-nilly file a protest just to try to stump the other competitor. Hope that answered your question. MS. WONG: Yes, a lot. Thank you. MS. O’HARA: Just following up on that, is there a dollar amount for that bonding requirement? MR. MASUDA: Yes. It’s based upon the value of the protest itself. The value of the contract. MS. O’HARA: So in the last five years, how many protests have we had to deal with? MS. CRAWFORD: I’m not so sure about construction because actually authority for handling procurement protests on construction has been delegated to the director of Public Works. MR. MASUDA: No, but I get them. MS. CRAWFORD: Oh you do? MR. MASUDA: We’ve had about five or six, but we’ve knocked them out before the hearing. And that’s what we always try to do, is do an early knock out before it starts accumulating a lot of costs. That’s what our office does too. Part of their focus is, what’s the catch phrase he uses? Preventive lawyering. So now we do classes and stuff like that. Compared to other jurisdictions and the state, we have significantly less then they do. Significantly. Why? I don’t know. MS. CRAWFORD: Cause we have good tight specifications. 8