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HomeMy WebLinkAboutCOM 0358.032 2004-2006 o~Mty^g.N~ Lincoln S.T. Ashida Harr Kim y4i6 Corporation Counsel Y Mayor Gerald Takase ;r,,; Assistant Corporation o:'M~'~ Counsel COUNTY OF HAWAII OFFICE OF THE CORPORATION COUNSEL 101 Aupuni Street, Suite 325 Hilo, Hawaii 96720-4262 (808) 961-8251 Fax (808) 961-8622 September 13, 2005 ~onorable Stacy K. Higa Chair, Hawaii County Council 25 Aupuni St. Hilo, HI 96720 Honorable Virginia Isbell Vice Chair, Hawaii County Council , 25 Aupuni St. Hilo, HI 96720 Dear Chair Higa and Vice Chair Isbell: RE: Contracting of Solid Waste Disposal Technology We received the enclosed letter from the State Procurement Office regarding the suggestion that the County may enter into a sole source contract, based upon (1) the vendor having a patent to a "unique" technology, and (2) there being an "emergency" situation within the County with respect to solid waste disposal. Deputy Corporation Counsel Bobby Jean Leithead-Todd sought the guidance of the State Procurement Office, based upon representations made by Francis Jung, Esq., an attorney for a vendor of solid waste disposal technology, who alleged via memorandum and representations before the Hawaii County Council that State law provided for such sole source procurement. Ms. Leithead- Todd included Mr. Jung's memorandum (attached) to the State Procurement Office, so they could make a comprehensive analysis and render an informed opinion. Based on the foregoing, it is the opinion of the State Procurement Office that both the (1) sole source argument and (2) emergency situation argument could not be supported by prevailing State purchasing law. Please advise our office if further action with respect to this particular issue is desired. If not, we will consider this particular issue closed. Although this theory was worth exploring on behalf of the County, it appears it will not ~j Q Comm. No. Hawaii County is an Equal Opportunity Employer and Provider Ref. To: PrH6B ~ei~ Reif. C a'~~ 4 1 CUU3 Honorable Stacy K. Higa Honorable Virginia Isbell September 13, 2005 Page 2 comport with existing and prevailing State law. Thus, we cannot recommend that the County pursue this option, as it may expose the County to unneeded liability exposure. You may contact Ms. Leithead-Todd at (808) 961-8251, if you would like to discuss this matter further. Also, please feel free to contact me any time via direct telephone at (808) 961-8304, extension 118, or via email at Lashida(~co.hawaii.hi. us. Thank you both for your kind attention to this matter. Very truly yours, V" LINCOLN S. T. ASHIDA Corporation Counsel Encls. c: Bobby Jean Leithead-Todd, Deputy Corporation Counsel (w/ encls.) Honorable William T. Takaba, Finance Director (w/ encls.) S: DepartmentslCounciULSA Misc./Letter re sole source Procurement Office opinion 9-9-OSILSAmr ~o~ i LINDA LINGLE f _ _ _ PROCUREMENT POLICY BOARD GOVERN00. _ GORDON K T. INO ~ I ~I GREGORY L KING WINIFRED N. ODO RU93I(. SVTO a .•,_•„Hy' MYRON L TONG ~~~pp~5 RI<HARD G. TOTTEN gpAINISTHATOR STATE OF IwJCVllblln 7 n~ 1 ~ STATE PROCUREMENT OFFICE 1,~. SPO 06-0031 September 2, 2005 ~Y Ms. Bobby Jean Leithead-Todd, Esq. Office of the Corporation Counsel County of Hawaii 101 Aupuni Street, Suite 325 Hilo, Hawaii 96720-4262 Dear Ms. Leithead-Todd SUBJECT: Request for Information on Contracting of Solid Waste Disposal for East Hawaii This is in response to your request of August 25, 2005 regarding contracting for future solid waste disposal in East Hawaii and the use of procurement methods (sole source and emergency). The question posed was whether it would be permissible to enter into a sole source or emergency contract with a contractor(s) who is proposing to use a unique, patented technology to dispose of East Hawaii's trash. The sole source procurement method requires that a good, service, or construction have a unique feature, characteristic, or capability that is essential for the agency to accomplish its work and, more importantly, that there is only a single source to provide the good, service, or construction. Based on the documents submitted with your request, it appears that the County of Hawaii has not determined that any one technology is the only one that will serve their needs, Also, the County of Hawaii is aware of other waste to energy companies that may offer different patented technology approaches that may be considered as possible alternative solutions. The fact that a contractor has a patented technology, by itself, does not establish it to be a sole source procurement. In this case, it appears that the County of Hawaii has not determined that only one technology is the only solution for their disposal of solid waste situation and, therefore, the criteria for sole source has not been met. With regards to utilizing the emergency procurement method, it does not appear that a long term contract for handling of the disposal of solid waste due to a planned closure of a landfill would fall within this process. Chapter 103D-307, Hawaii Revised Statutes, provides that this process be used to address an emergency situation when specific conditions exist and, further, may be utilized to purchase only the immediate needs of the emergency and not subsequent non-emergency requirements. In this specific situation, the disposal of solid waste is an ongoing process and the closure of the landfill was not unforeseen or unexpected. Therefore, the emergency procurement method to dispose of the solid waste may be appropriate only if no other provisions are in place to dispose of the solid waste at the time of the landfill closure and then only allowable for a temporary period of time until a permanent solution is in place. P.O. Box 119 • Honolulu, Hawaii 96610-0119 • Tel: (808) 587-4700 • Fax: (808) 587-4703 www.spo.hawaii.gov Ms. Bobby Jean Leithead-Todd SPO 06-0031 September 2, 2005 Page 2 We hope this response adequately provide clarification on this subject. Sincerely, uth E. Yamaguchi Acting Administrator State Procurement Office CT:sk STATE OF HAWAII INQUIRIES ON CHAPTER 103D, HRS AND/OR ADMINISTRATIVE RULES TO: Administrator Fax No. (808) 587-4703 State Procurement Office E-mail: ruth.vamaauchi(c~hawaii.gov FROM: Office of the Corporation Counsel Date: August 25, 2005 County of Hawaii Contact Name: Bobby Jean Leithead-Todd Phone No./Fax No. 961-8251/961-8622 E-mail: bitoddCa.co.hawaii.hi.us Question(s): Hawaii County's landfill in Hilo is expected to close in Mazch, 2006. The County wishes to enter into a contract for a landfill altemative, awaste-to-energy facility to take care of the East Hawaii waste stream for the next 20 to 40 yeazs. The County has a landfill at Puuanahulu, approximately 90 miles away from the site of the Hilo landfill. Closure of the Hilo landfill will require the County to truck all of the East Hawaii trash, approximately 200 to 250 tons per day, to Puuanahulu. This will add an additional 12 to 90 trucks per day to the island's traffic, depending upon the size of the trucks. The County received a memorandum from a private attorney, postulating that his company's altemative technology could be contracted as a "sole source" vendor, as they have a unique patented technology. He also opined that the closure of the landfill was an emergency and that the County could contract with his company under the emergency procurement provision of the Procurement Code. I have attached his memoranda and my response to it. Could you please review the situation and tell us whether it would be permissible to enter into a sole source or emergency contract with either Mr. Jung's client or another "unique, patented" technology to dispose of East Hawai`i's trash? Response given: Other Comments (e.g., Attorney General): Reference to HRS/HAR: Response provided by: Ju1vG & Vass~x, P.C. AT7'ORNEVS AT LAW A LAw CoRroaAnoN i-~ ~ , ~ ~ 75170 HUALALAI ROAD. 3Urrc D-214 KAa.UA-KONA, HI %740 2005 P;;3 2 '~l 3 36 FRANCIS L JUNG (N7. DC k Kil 3264852 WASH014TON 0.C OPl1Ct 'f110MAb W. VA~AK (Mq VA, DC! tlq CG FA W1I7sr u511A KILFA77UCIC KOTIIR IK40R) FAX (808) 3267904 l.. _ ARILlGION, VA 7771L73p GNOI. NONAWN JUNG (N4 UT) Frlllia )DK~W®~l.K[[ i[L NU Kt71d BY_. FAK to «671« ..wnr.abrrba. MEMORANDUM TO: Bobby Jean Leithead-Todd, Esquire Office of the Corporation Counsel County of Hawaii FROM: Francis L. Jung, Esq.' ` _ DATED: August 1, 2005 RE: The Necessity for Requests For Proposals ("RFP'~ for Solid Waste Disposal Contracts by and between the County of Hawaii and Private Contractors This Memorandum addresses the question of whether or not an RFP would be required, prior to the execution of an agreement by and between the County of Hawaii and a grivate corporation to build a facility that would convert solid waste to energy utilizing patented technology. This question was raised during Pacific Waste's informational meeting with you, the Mayor, and his staff earlier in July. For purposes of legal analysis only, the facts surrounding Pacific Waste and BRI's technology will used to discuss application of Hawaii law to the need for RFPs in inatansva where: I) patented technology is unavailable to parties other than patent licensees, such as Pacific Waste and, 2) from a County perspective, emergency situations have arisen. Under no cil+cumstances is the following to be construed as a bid proposal of any kind under Hawaii Law. ISSUE: Is the County of Hawaii required by law to issue a Request For Proposals ("RFP'~ for purposes of contracting for the removal and disposal of solid waste from 1) existing landfills and transfer stations and/or 2} the collection and disposal of solid waste by and between commercial haulers and landfills and/or energy generating facilities? , Bobby Jean Leithead-Todd, Esquire August 1, ?005 Page Two ANSWER: The Answer with respect to question 1 above is "not necessarily." With respect to question 2 above, the answer is "no." When contracting for the removal and disposal of solid waste from County landfills, as a general rule, the County of Hawaii is required by law to issue an RFP in connection with the solicitation of proposals for the "proctrrement or disposal of goods or services, or for construction." HRS § ] 03D-104. There are, however, two primary exceptions to this requirement: 1) when the specific treed of the County can only be acquired from a sole source (HRS § 103D-306); and 2) when an emergency situation requires the prompt execution of a contract without as RFP (HRS § t 03D-30'n. Consequently, where contracts require the use of protected patented technology as an integral part of the services to be provided, and/or where such services are sought in an emergency or crisis situation, no RFP would be required. With respect to item 2 above, no RFP is t+equired where contracts are between private solid waste disposal companies and cotnmereial haulers so long as the County is not a party to such agreement and the contract does not involve the "proctaement or disposal of goods or services, or for construction" by, or to, the County. APPLICABLE LAW: The following provisions of Chapter 103D of the Hawaii Revised Statutes are applicable to the pt~esent situation. Particularly relevant provisions are highlighted for ease of reading. § 103D-102 Application of this chapter (a) This chapter shall apply to all procwernent contracts made try govmuental bodies whether the consideration for the contract is cash, rcveoues, realiatiotts, receipts, or esmiags, aay of which the Sttae receives or is owed; in-kind benefits; or forbeararroe; povided tFat notlting in this chapter or rules adopoed heretmder shall P~'mt mY gnu 6mr ~P~B wilh the terms and conditions of arry odter tGfi. ~9~ ar cooperative agreement. (b) Notwithstanding subsection (a), this chapter shall not apply W contracts by governmental bodies: (I) Solicited or entered into before July I, 1994, unless the parties agree to its application to a contract solicited or entered into prior to July I, 1994; (2) To disburse funds, irtespecdve of the"v source: Bobby Jean I.eithead-Todd, Esquire August I, 2005 Page Three (A) For grants or subsidies as those terms arc defined in section 42F-101, made by the State in accordance with standards provided by law as required by article VII, section 4, of the State Constitution; or by the counties pursuant to then respective charters or ordinances; (B) To make payments to or rm behalf of public officers and employees for salaries, fringe benefits, professional fees, or reimbursements; (C) To satisfy obligations that the State is required to pay by law, including paying fees, permanent settlements, subsidies, or other claims, making refunds, and returning funds held by the State as trustee, custodian, or bailee; (D) For entitlement programs, including public assistance, memployment, and workers' compensation programs, established by state or federal law; (E) For dues and fees of organiiaHons of which the State or its officers and employees are members, including the National Association of Governors, the National Association of State and County Governments, and the Multi-State Tax Commission; (F) For deposit, investment, or safekeeping, including expenses rchued to their deposit, investment, or safekeeping; (G) To governmental bodies of the State; (H) As loans, ands loan programs administmed by a governmental body; and (I) For contracts awarded in accordance with chapter 103E (3) To procure goods, services, or construction from a govrernmental body other than the University of Hawaii bookstores, from the federal government, or from smother state or its political subdivision; (4) To procure the following goods or services which are available from multiple sources but for which procurement by competitive means is either not practicable or not advantageous to the State: (A) Services of expert witnesses for potential and actual litigation of legal tnatrcrs involving the State, its agencies, and its officers and employees, including adminishative qussi judicial procecdiogg; (B) Works of art for museum or public display; (C) Research and reference materials including books, maps, periodicals, and pamphlets, which are published in print, video, audio, mra®tetic, or electronic form; (D) Meats and foodstutTs for the Kalaupapa settlement; (E) Opponrnts for athletic contests; (F) Utility services whose rates or prices are fixed by regulatory processes or agencies; (G) Performances, including emextainment, speeches, and cultural and artistic presentations; (H) Goods and services for commercial resale by the State; (1) Services of primers, rating agencies, support facilities, fiscal and paying agents, and registrars for the issuance and sale of the State's or counties' bonds; Bobby lean Leithead-Todd, Esquire August 1, 2005 Page Four (J) Services of attorneys employed or retained to advise, represent, or provide any outer legal service to the State or any of its agencies, on matters arising tinder {awl of atrothu state or foreigo courttry, or in an action brought in another state, federal, or foreign jurisdiction, when substantially all legal services arc expected to be performed outside this State; (K) Financing agreements under chapter 37D; amd (L) Amy other goods or services which Ute policy board determines by rules or the chief procurement officer determines in writing is available from multiple sources but Cor which procurement by competitive means is either not practicabk a not sdvantagwus to the State; and (5) Which are specific procurements expressly exempt from any or all of the requirements of this chapter by: (A) References in state or federal bw to provisions of this chapter or a section of this chapter, or references to a particular requirement of this ehepber; and (B) Trade agreement, including the Uruguay Round General Agreemem on Tariffs and Trade (GATT) which require certain non~onstruction and non-software development procurements by tfie comptroller to be conducted in accordance with its terms. (C) Unless other kws expressly exempt a goveromemai body from the requirements of this chapter or any of its provisions, this chapter and all rules adopted by the policy board pursuant to section 103D-21 l shall apply to all governmenW bodies ofthia State; except that any camty may mly on other provisions established by charter, ordinance, or roles adopted m acrnrdence with chapter 91 provided that those provisions are comsisterrt with the requiranents of this chapter. § 103D-104 Definitions As used in this chapter, unless the context clearly requires otherwise: "Business" means atry corporation, pumership, imdividual, sole proprietorship, joint stock tompaoy, joint venture, or any other private legal entity. "Chmge order" means a writrem or~r signed by the procrrement officer, directing the wntractor to make changes which the changes clause of the contract authorizes the procurement officer to order without the consent of the comtractor. "Construction" means the process of building, altering, repairing, improvimg, or demolishing arty public structure or building, or other public improvements of any kind to arty public real property. The term includes the routine operation, routine repair, ar routine mainterteoce of exisdrtg stnrcbnes, buiklirtgs, or real property. 'Contract" mesrts all typal of agreement, regardless of whir dtry maybe called, for the procuremrnt or disposal of goods or servicaa, or for comstrttction. "Contract modification" means any written alteration in specifications, delivery point, rete of delivery, period of performance, price, quantity, or other provisions of any contract accomplished by mutual action of the parties to the contract "Contractor" means any person having a contras with a governmental body. "Cost-reimbursemrnt contract" means a contract under which a contractor is reimbursed for cost which arc allowable and allocable in aaordance with the contract temrs and the provisions of this chapter, and a fee, if arty. Bobby Jean Leitltead-Todd, Esquire August 1, 2005 Page Five "Data" means recorded information, regardless of form or characteristic. "Employee" means an individual drawing a salary fi+ottt a governmental body, whether elected or not, and any noncompensated individual performing xrvices for any governmental body. "Established catalogue price" means the price included ht a catalogue, price list, schedule, or other form that: (1) [s regularly maintained by a manufacturer or connector; (2) Is either published or otherwise available for inspection by customers; and (3) States prixs at which ales are ctnrsttty or wets last made to a significant rttuaber of any category of buyers or buyers consrituting the general buying public for the goods a services involved. "Goods" roeaoa all property, htchtding brtt not tirnihd to equipment, equipment leases, materials, supplies. Pm~8. , and procaxa, iahtditrg aysEema and aotlwars. excluding hind or a permment interest in lart4 kssd of reel property, sad office rentals. "GovertttaeaW body' meats uty department, cammiasion, camcil, bold, bureau, authority, committee, irtstittttioa, legislative body, egetscy, government capaatim, a other establishment or ot&x of the exectnive, legislative, or judicial branch of the State, iochtdiog the otBa of Hawaiian stl'airs, artd the aevetal counties of the Stale. "Grant" means the famishing of assistance, whether financial or otherwise, to any person to support a program authorized by law. The farm does not ialude m sward whose prkrary purpose is to procure an end product, whether ~ in the forth of goods, services, a' construction; a corrtrsct resulting from such an award is not a gram but a procurement contract. "Invitation for bids" means all documents, whether attached or incorporated by reference, utilimd for soliciting bids. "Polity board" means the procuremem polity board created in sa:don 103D-201. "Procrnemant" rnesrs buying, purchesiag, tenWtB. leasing, or otherwise aWu~i mY BPod. service, or constrtwtioa. The term abo includes all finrctlam thu pertain to the obtaining of any good, service. or conwtction. including description of requirerrenta, xhxtion end solicitation of sources, prcpuatien and award of contracts, end ell phases of connect adminiatrui~. "Procraement cud" means a charge card, with prodetermined limitations, used by govermtert agencies in plxe of cash or purchase orders for the purchax of goods, services, or coostnrcdon. "Prtrcruemem officer" means any person authorized to enter into and administer contracts and make written determinations with respect tfieroto. The term also includes an authorized reprexntative acting within the limits of authority. "Professional xrvices" means thox services widrin the scope of the practice of architecture, landscape architecture, professional engineering, land surveying, real property appraisal, law, medicine, accounting, dentistry, public finance bond underwrit®g, publk finance bard ioveatmerA budaog, err arty odser ptacdoa defined as professional by the laws of this State or the professional and scientific occttpatioo series contained in the United States Office of Personnel ManagemenPs Qualification Standards Handbook. Bobby Jean Leithead-Todd, Esquire August t, 2005 Page Six "Purchase descriprion" means the words used hr a solicitation to describe the goods, services, or construction to be purchased, and includes specifications att~hed to, ar made a part of, the solicitation. "Purchasing agency" means any governmental body which is authotv~d by this chapter or its implementing rules and procedures, or by way of delegation, to enter into contracts for the procuremem of goods, services, or construcrioo. "Request for proposals" meam all documents, whether attached or incorporated by reference, utilized for solicitutg proposals. "Responsible bidder or offeror" means a person who has the capability in all respects to perform fully the contract requirements, and the integrity and reliability which will assure good faith performance. "Resporoive bidder" means a person who has submitted a bid which conforms in all material respells to the invitation for bids. "Services" means the famishing of labor, time, or effort by a contractor, not involving the delivery of a specific end product other than reports which aro meetly incidental to the required performance. "Specificatiasra" means any description of the physical or fimdioml cberacteristics, or of the name of a good, service, or construction item. The term includes descriptions of any re<lunemem for inspecting, testin& or PrcP~g a good, servix, or construction item for delivery. i "Using agency" means arty govermnemal body which utilizes any goods, services, or construction procured under this chapter. § 103D-301 Methods of source selection Unless otlrerwise authorized by kw, all contracts shall be awarded by competitive sealed bidding pursuant to section 103D-302, except as provided in: (I) Section 103D-303 (Competitive sealed proposals); (2) Section 103Q304 (Professional services procurement); (3) Section 103D-305 (Small Purchases); (4) Sectiar I03Q306 (Sole sormx procurement); end (5) Section 103x307 (F.rnergenry procrtremems). § 103Q306 Sole source procurement (a) A contract rosy be awarded for goods, services, or construction without competition when the head of a purchasing agency determines in writing that these is only one souce for the regttired good, service, or construction, the determination is reviewed sod approved by the chief procrQeroerrt officer. the wriCeo detaminetion is posted in the manrter descn'bedm rules adopted by the potiey boatct, sod oo abjedioa is ouuurdmg. 7be written determination, arty objection, and a written summary of the disposition of enY objection shell be included in the contract file. Bobby Jean Leithead-Todd, Esquire August 1, 2005 Page Seven (b) The written determination shall cattain such information as the rules of the polity board require. Persons may file written objections to the of a wntract pursuant to this section. Rule of the policy board shall provide for the disposition of objection, including a written summary of the disposition. (c) The risks of the polity board shall include anon-exhaustive list of procurements which wnstitute sole source procurements and criteria for determining whm a particular procurement may be determined to be a cok source. The rules shall also proscribe when cost or pricing data moat be considered end how they are to be used in establishing the price, terms, and conditions, if any, for a contract awarded pursuant to this section. § 1031307 Emergency procurements (a) The head of a purchasing agency may obtair s good, service, or conatrrrcti~ essential to meet sn emergenry by mean other than specified k this chapter whm the following caditiom exist: (I) A situati~ of ao unusual or compelling urganry amtes a threat to life, public health, welfiue, or safety by reason of major natural disaster, epidemic, riot, fire, or arch other reason as may be determined by the head of that P~~kB ~cY+ (2) The earergenry condition generates ao immediate sod carious need for goods, sarvioa, or construction that cannot be met through normal proeurameat methods and the government would be seriously injured if the purchasing agency is not permitted oo employ the means it proposes to use to obtain the goods, services, or constmction; and (3) Without the needed good, service, or conttnrctior, the continued fimctioning of government, the preservation or protection of'urephreeabk property, or the heshh and safely of arty person will be ceriornly threatened. (b) The emerg~cy proanement shell be Dude with such competition m is practicable order the circunntarces and, where practicable, approval from the chief procuramau ot6oer shell be obtained prior to the procurement. A written determination of dte basis for the emagarey and for the selection of the particular contractor dull ba included in the contract file. FACTS ASSUMED: For purposes of this Memorandum, we have made the following assumptions of fact: 1. The Environmental Protection Agency ("EPA") is requiring that the Hilo Landfill, presently being utilized to dispose of solid waste in East Hawaii, be closed by March 2006; 2. With the closure of the Hilo Landfill, there exists no facility in East Hawaii legally capable of accepting East Hawaii's solid waste; Bobby Jean Leithead-Todd, Esquire August 1, 2005 Page Eight 3. The County of Hawaii has not yet issued an RFP for development and implementation of another East Hawaii Landfill; and 4. Unless a new East Hawaii Landfill is created and accepted by the EPA, or the life of the present East Hawaii Landfill is extended, East Hawaii's currently generated solid waste will require that said solid waste be transported to a West Hawaii Landfill for disposal. LEGAL ASSERTIONS 1. Patented rights by their nature grant exclusive right to use the technology patented to the patent owners See, e.g. U.S. Patent Abstracts 6,340,581 and 5,821,111 attached hereto as Exhibits "1" and "2", providing patents for certain technology capable of converting solid waste to ethanol and electricity while reducing the mass of solid waste generated for disposal and the need to transport the same to other transfer stations and landfills; and 2. Patent holders or owners may license third parties to utilize such technology exclusively. See also e.g. ,Letter from Bill Brace, President of BRI to Virginia Isbell dated July 28, 2005, affirming Pacific Waste's exclusive right to utilize BRI's patented technology in Hawaii, attached as Exhibit "3." DISCUSSION: The Soutlt Hilo Landfill is located in Hilo and the United States Environmental Protection Agency ("EPA's, for health and safety reasons, is requiring that this facility be closed by March 2006. With the closure of Hilo's landfill, there will be no facility in East Hawaii that will be able to accept East Hawaii's solid waste. At present, the County of Hawaii does not have an RFP issued requesting bids for development of a solid waste landfill to be located in East Hawaii or an RFP for transporting solid waste from East to West Hawaii. To date, the County has contracted with a law firm located on the East Coast to draft an RFP. That proposal will become due, however, well past the March 2006 deadline. Bobby Jean Leithead-Todd, Esquire August 1, 2005 Page Nine An Emer¢e~y Situation Under such circumstances, it would appear that the provisions of HRS § 103D- 307 apply if the "head of a purchasing agenc)~' determines that, (I) A situation of an unusual or compeUimg urgency creates a thmat to life, public 6ulth, welfaro, or safety by reason of major natural diaasoer, epidemic, rim, 5re, m suth other maven as may be determimed by the head of drat purchasing aB~Y+ (2) The emergency condition generates sn mrmediate and serious need for goods, services, err wrowctioa that cannot be met tluorrg6 normal procuremart mtethodf amd the govermnamt would be seriously injured if the purchuing agency is not permitted to employ the meam it proposes to use to obtain the goods, services, or comstrtrction; srrd (3) Without the needed good, service, or coatbuctimr, the wotimued fimctioning ofgoverament, the preservation or protectiam of irmphwaabb property, or the heahh amd ssfety of any parson wiU be seriously threatened. Under the present circumstances, viz. the EPA mandated closing of the Hilo Landfill, the law would permit the bead of the procuring County agency to determine that a public health and safety emergency situation exists, and that under such circumstances, the need for a timely and efficient remedy outweighs the need for delay inherent in the RFP process. This could be effected if an emergency was declared by ordinance by the County Council pursuant to the provisions of HRS 91F and 103D-102 (c) cited above. Sole Source Additionally, using BRI as an example, where a company has developed patented technology which efficiently and economically transforms solid waste to ethanol and electricity, (see e.g., "A Report on a New Txhnology that addresses multiple Energy and Waste Disposal solutions" attached as Exhibit "4"), the head of a procuring agency has the right to reject the use of an RFP and offer a contract to a "sole source" if, (a) A oontmct may be awarded for goods, services, or ca~xion withont competition when the head of a purchasing agency determines in writing that there is only one source for the requirod good, advice, or consnvaiorr, the determination is mvkwed anti approved by the chiefprocrmerrrent officer, the written deurmination is posted in the rrmrrer desen'bedm rules adopud by the policy bwrd, and no objection is outstaodiog. The written dererminstion, arty objection, and a written summery of the diapwition of any objection shall be included in the contract fik. (b) The written determination shall rnntain such information u the rules of the policy board require. Persons may fik written objections to the issusrrx of a contract pursuant to this section. Rules of the policy board shall provide for the disposition of objections, inchding a written sumrrrary of the disposition. Bobby Jean I.eithead-Todd, Esquire August 1, 2005 Page Ten (c) The rules of the policy board shall include a non-exhauseive list of gocurcmenu which conuitute sok source procurements and criteria for determining when a particular proctaernart ruay be determined to be a sole source. The rake shall also prescribe when coat ar pricing dale must be considered and how thry arc to be used in establishing the prix, terms, and conditions, if any. for a contract awarded pursunrt to this section. Where patented technology is essential in providing a service to the County, in BRI's case, the technology only works when a patented micro-organism capable of digesting solid waste and converting said waste to ethanol is utilized. Using BRI as an example, BRI has obtained patents for its technology. (See copies of the patent abstracts, attached hereto as Exhibits "1"and "2.") B1tI also has an Exclusive Agreement with Pacific Waste to market its product in the State of Hawaii.. (See Letter From BRI to Virginia Isbell dated Jtily 28, 2005, see attached hereto as Exhibit "3.'~ Consequently, only B12I, its assignees and/or licensees can use BRI's technology. As Pacific Waste has obtained the sole and exclusive right to utilize this technology in Hawaii, it would appear that, for purposes of utilizing BRI's technology in Hawaii, the provisions of H1tS § 103D-306 are applicable and Pacific Waste is the "sole source" for such technology. Again, however, like the requirements of HRS § 103D-307 (emergency), HRS § 103D-306 also requires a determination by the "head of the purchasing agency" that the patented technology meets the solid waste needs of the Cotmty of Hawaii and that the sole source from which the patented technology can be obtained is the patented owner of the technology or its exclusive assignee. Contracts Between Non-Governmental Parties There is no legal basis upon which to conclude that contracts between non- governmental entities require the issuance of an RFP by the County of Hawaii. Consequently, solid waste haulers are free to dispose of their solid waste to such private landfills or energy producers as they wish. We hope that the foregoing will provide some indication and assistance to corporation counsel with respect to the need for 1tFFs in solving the solid waste problems confronting the County of Hawaii. Should you have any questions conveming the foregoing, please feel free to contact us at your convenience. Thank you for your consideration.