Hawaii Administrative Rules › Title 3 - DEPARTMENT OF ACCOUNTING AND GENERAL SERVICES › State Procurement Office › Hawaii Public Procurement Code › Chapter 126 - LEGAL AND CONTRACTUAL REMEDIES › Subchapter 4 - DETERMINATION THAT SOLICITATION OR AWARD VIOLATES LAW › Section 3-126-38 - Remedies after an award

Current through June, 2024
(a) When there is
					 no fraud or bad faith by a contractor:
(1)
					 Upon finding after award that a state or county employee has made an
					 unauthorized award of a contract or that a solicitation or contract award is
					 otherwise in violation of law where there is no finding of fraud or bad faith,
					 the chief procurement officer or designee may ratify and affirm, modify, or
					 terminate the contract in accordance with this section after consultation with
					 the respective attorney general or corporation counsel, as
					 applicable.
(2) If the violation
					 can be waived without prejudice to the State or other bidders or offerors, the
					 preferred action is to ratify and affirm the contract.
(3) If the violation cannot be waived without
					 prejudice to the State or other bidders or offerors, if performance has not
					 begun, and if there is time for resoliciting bids or offers, the contract shall
					 be terminated. If there is no time for resoliciting bids or offers, the
					 contract may be amended appropriately, ratified, and affirmed.
(4) If the violation cannot be waived without
					 prejudice to the State or other bidders or offerors and if performance has
					 begun, the chief procurement officer or designee shall determine in writing
					 whether it is in the best interest of the State to terminate or to amend,
					 ratify, and affirm the contract.
Termination is the preferred remedy. The following
						factors are among those pertinent in determining the State's best
						interest:
(A) The costs to the State
					 in terminating and resoliciting;
(B) The possibility of returning goods
					 delivered under the contract and thus decreasing the costs of
					 termination;
(C) The progress made
					 toward performing the whole contract; and
(D) The possibility of obtaining a more
					 advantageous contract by resoliciting.
(5) Contracts based on awards or
					 solicitations that were in violation of law shall be terminated at no cost to
					 the State, if possible, unless the determination required under paragraphs (2)
					 through (4) is made. If the contract is terminated, the State shall, where
					 possible and by agreement with the supplier, return the goods delivered for a
					 refund at no cost to the State or at a minimum restocking charge. If a
					 termination claim is made, settlement shall be made in accordance with the
					 contract. If there are no applicable termination provisions in the contract,
					 settlement shall be made on the basis of actual costs directly or indirectly
					 allocable to the contract through the time of termination, other than
					 attorney's fees. Such costs shall be established in accordance with generally
					 accepted accounting principles. Profit shall be proportionate only to the
					 performance completed up to the time of termination and shall be based on
					 projected gain or loss on the contract as though performance was completed.
					 Anticipated profits are not allowed.