Opinion ID: 871558
Heading Depth: 2
Heading Rank: 1

Heading: The legislature clearly intended to preclude judicial review of protests brought pursuant to HRS chapter 103F

Text: ANK, Hamamoto, and the ICA are in agreement that chapter 103F does not allow for judicial review. See id. at 206, 257 P.3d at 219. As explained below, when the legislature adopted chapter 103F, it specifically declined to bring health and human services procurement under the general Public Procurement Code, chapter 103D, and instead created a new chapter that did not contain chapter 103D's detailed provisions concerning judicial review. Because the legislature specifically declined to apply the provisions of chapter 103D to health and human services procurement, see HRS § 103F-104 (Supp.2008) (Contracts to purchase health and human services required to be awarded pursuant to this chapter shall be exempt from the requirements of chapter 103D, unless a provision of this chapter imposes a requirement of chapter 103D on the contract or purchase.), the absence of judicial review provisions in chapter 103F evidences the legislature's intent to preclude judicial review under that chapter, see State v. Ribbel, 111 Hawai`i 426, 430, 142 P.3d 290, 294 (2006) (Where a statute with reference to one subject contains a given provision, the omission of such provision from a similar statute concerning a related subject is significant to show that a different legislative intent existed.). I therefore respectfully disagree with the majority's conclusion that judicial review is not prohibited by chapter 103F. Majority opinion at ___ - ___, 277 P.3d at 1004-06. Chapter 103D, the Hawaii Public Procurement Code applies to all procurement contracts made by governmental bodies[,] HRS § 103D-102 (Supp.2008), while chapter 103F, the health and human services procurement code, specifically applies to all contracts made by state agencies ... to provide health or human services to Hawaii's residents[,] HRS § 103F-101 (Supp.2008). The health and human services procurement code provides that the protest procedures and remedies set forth in chapter 103F shall be the exclusive means available for persons aggrieved in connection with the award of a contract to resolve their concerns. HRS § 103F-504 (Supp.2008). Protests concerning an award of a health and human services contract may be submitted to the head of the purchasing agency, as follows: (a) A person who is aggrieved by an award of a contract may protest a purchasing agency's failure to follow procedures established by this chapter, rules adopted by the policy board, or a request for proposals in selecting a provider and awarding a purchase of health and human services contract, provided the contract was awarded under section 103F-402 or 103F-403. Amounts payable under a contract awarded under section. 103F-102 or 103F-403, and all other awards of health and human services contracts may not be protested and shall be final and conclusive when made. HRS § 103F-501 (Supp.2008). A protesting party may seek reconsideration of the decision of the head of the purchasing agency, as follows: (a) A request for reconsideration of a decision of the head of the purchasing agency under section 103F-501 shall be submitted to the chief procurement officer not later than five working days after the receipt of the written decision, and shall contain a specific statement of the factual and legal grounds upon which reversal or modification is sought. (b) A request for reconsideration may be made only to correct a purchasing agency's failure to comply with section 103F-402 or 103F-403, rules adopted to implement the sections, or a request for proposal, if applicable. (c) The chief procurement officer may uphold the previous decision of the head of the purchasing agency or reopen the protest as deemed appropriate. (d) A decision under subsection (c) shall be final and conclusive. HRS § 103F-502 (Supp.2008) (emphasis added). Chapter 103D similarly provides that [t]he procedures and remedies provided for in this part, and the rules adopted by the policy board, shall be the exclusive means available for persons aggrieved in connection with the solicitation or award of a contract, a suspension or debarment proceeding, or in connection with a contract controversy, to resolve their claims or differences. HRS § 103D-704 (1993 & Supp.2008). Chapter 103D further provides that [a]ny actual or prospective bidder, offeror, or contractor who is aggrieved in connection with the solicitation or award of a contract may protest to the chief procurement officer or a designee as specified in the solicitation. HRS § 103D-701(a). The aggrieved bidder, offeror, or contractor may seek further review of the chief procurement officer's decision before a hearings officer of the Department of Commerce and Consumer Affairs (DCCA). HRS § 103D-709(a) (Supp.2008). Significantly, the hearings officer shall have power to issue subpoenas, administer oaths, hear testimony, find facts, make conclusions of law, and issue a written decision not later than forty-five days from the receipt of the request [for further review], that shall be final and conclusive unless a person or governmental body adversely affected by the decision commences an appeal [.] HRS § 103D-709(b) (Supp.2008) (emphasis added). Chapter 103D also contains detailed procedural provisions that govern the timing and standard of judicial review. HRS § 103D-710 (Supp. 2008). In sum, HRS § 103F-502 provides only that the reconsideration decision of the chief procurement officer shall be final and conclusive. I agree with the majority that the words final and conclusive, standing alone, might not be sufficient to evidence a clear intent to preclude judicial review. Majority opinion at ___ - ___, 277 P.3d at 1004-05. However, when the phrase final and conclusive in HRS § 103F-502 is viewed alongside the language of HRS § 103D-709(b), the legislature's intent to preclude judicial review is clear. Again, in contrast to HRS § 103F-502, which provides only that the reconsideration decision of the chief procurement officer shall be final and conclusive[,] HRS § 103D-709(b) provides that the reconsideration decision of the DCCA hearings officer shall be final and conclusive unless a person or governmental body adversely affected by the decision commences an appeal [.] (Emphasis added). Ribbel, 111 Hawai`i at 430, 142 P.3d at 294 ([T]he omission of such provision from a similar statute concerning a related subject is significant to show that a different legislative intent existed.). In addition, chapter 103F does not contain any provisions governing judicial review. Compare chapter 103F with HRS § 103D-710. Moreover, the legislative history of chapter 103F confirms that the legislature specifically intended to omit the appeal and judicial review provisions contained in chapter 103D. See First Ins. Co. of Hawaii v. A & B Props., 126 Hawai`i 406, 415, 271 P.3d 1165, 1174 (2012) (noting that, where the language of a statute is ambiguous, we may look to the statute as a whole and its legislative history for guidance in construing the language in question.). Accordingly, a review of the historical context in which both chapter 103F and chapter 103D arose is instructive. Article VII, section 4 of the Hawai`i Constitution was adopted in 1978, and provides the foundation for appropriating public funds to private entities. Haw. Const. art. VII, § 4 (No grant of public money or property shall be made except pursuant to standards provided by law. ) (emphasis added). In 1981, cognizant of the 1978 constitutional amendment, the legislature adopted a statutory regime to govern three types of appropriations: grants, subsidies, and purchase of service. [7] 1981 Haw. Sess. Laws Act 207, § 1 at 394. Act 207 was subsequently codified as HRS chapter 42. HRS chapter 42 (Supp.1981). Under chapter 42, potential providers submitted proposals for review by the appropriate agency. HRS § 42-4(b)-(e) (Supp.1981). The agency's recommended proposal would be included in the executive or judiciary budget for consideration by the legislature, HRS § 42-5(a) (Supp.1981), or would be submitted by way of a separate bill, HRS § 42-6(a) (Supp.1981). Chapter 42 did not provide for a protest procedure or an appeals process. See HRS chapter 42 (Supp.1981). In 1991, the legislature repealed chapter 42 and replaced it with chapter 42D.1991 Haw. Sess. Laws Act 335, §§ 1, 15 at 1047-55, 1060. Chapter 42D included new standards and procedures for the award of purchase of service contracts, which required that agencies identify and assess the need for services, submit a recommended budget to the legislature, and advertise for proposals upon appropriation of lump sum funds. [8] HRS §§ 42D-21 through 42D-24 (Supp. 1991). In addition, each agency was required to establish an appeals process to reconsider any recommendations for funding made by the agency. HRS § 42D-6 (Supp. 1991). Chapter 42D was amended in 1992 to include a sunset date of July 1, 1996. 1992 Haw. Sess. Laws Act 194, §§ 20 at 425. The 1992 amendments also provided for, inter alia, the establishment of two councils: the Executive Coordinating Council, which made policy recommendations to the Governor, and the Advisory Council, which made recommendations to the Executive Coordinating Council. Id., codified at HRS §§ 42D-4, 42D-5 (Supp.1992). With regard to the reconsideration process, the 1992 amendments provided that: Requesting organizations not recommended for funding or not satisfied with the recommended level of funding may submit a written request to the executive coordinating council for reconsideration within ten days of receipt of the agency's statement of findings and recommendations. The coordinating council shall respond in writing to the requesting organization within ten days of the receipt of the written request for reconsideration. HRS § 42D-23(d) (Supp.1992). Chapter 42D did not otherwise provide for any form of review or appeals process. In 1993, the legislature adopted Act 8, later codified as HRS chapter 103D, the Hawai`i Public Procurement Code. 1993 Haw. Special Sess. Laws Act 8, § 2 at 38-68. The purpose of Act 8 was to promote economy, efficiency, and effectiveness in the procurement of goods and services[.] H. Stand. Comm. Rep. No. S11-93, in 1993 Special Sess. House Journal, at 64. Noting that the procurement code was vague, inconsistent, and inefficient, the; legislature explicitly repealed this piecemeal system by deleting provisions in HRS chapter 103 that related to procurement, and establishing the Public Procurement Code under chapter 103D. [9] S. Stand. Comm. Rep. No. S8-93, in 1993 Special Sess. Senate Journal, at 39; 1993 Haw. Special Sess. Laws Act 8, §§ 25-47 at 79-80. Nevertheless, the procurement of some purchase of service contracts continued to be governed by chapter 42D. See HRS § 42D-1 (1993). However, in 1996, the legislature determined that chapter 42D was no longer an effective procurement mechanism. S. Stand. Comm. Rep. No. 2075, in 1996 Senate Journal, at 1005 (noting great consensus that the present purchase of service process under chapter 42D, HRS, is not working). Accordingly, the legislature extended chapter 42D's sunset date to July 1, 1998, but began the process to transfer the entire purchase of service system to chapter 103D, to provide for procurement of all services under one chapter. [10] 1996 Haw. Sess. Laws Act 310, §§ 2 and 3 at 973. Act 310 also directed the administrator of the State Procurement Office (SPO) to develop and implement a transition plan to replace the procedures previously provided under chapter 42D. Id. The SPO administrator was directed to submit a report to the legislature by December 31, 1996 regarding these new procedures, together with a draft of any proposed language necessary to implement the administrator's proposals. Id. § 4, at 974. In its December 1996 Report to the Hawaii State Legislature, the SPO advised against the legislature's intent to include health and human services procurement in chapter 103D: To avoid confusion with the current State Procurement Code (Chapter 103D, HRS), we do not recommend that this new [purchase of service] law be placed under that chapter. The POS law should have its own stand-alone and designated chapter under the [HRS]. State Procurement Office, Purchase of Service (POS), Act 310, Session Laws of Hawaii 1996, Report to the Hawaii State Legislature (Dec. 1996) (hereinafter SPO Report) at 33 (emphasis in original). The SPO explained that its draft legislation significantly strengthens the law yet also goes a long way to clarify, streamline, and modernize the entire process to procure health and human services. Id. at 34. The SPO noted that providers had complained that the existing purchase of service system contained burdensome and sometimes duplicative bureaucratic requirements. Id. at 19. The SPO further noted that the existing system was marked by inconsistent and fragmented contract administration resulting in late contracts and delayed payments. According to providers, there have been instances in which contracts and payments have been delayed for up to six months. In one instance, there was an eleven-month delay. Such actions place an undue hardship on the providers[.] Id. The SPO also noted that various stake-holders expressed concern with regard to the reconsideration procedure, which was described as a flawed and biased process because the `appeals' body consisted] of individuals responsible for making the original selection and funding recommendations. Id. at 15. Nevertheless, the SPO proposed a similar, agency-directed process for protests under the new chapter: Chapter 42D included a Request for Reconsideration (RFR) or appeal process. This reconsideration process is for service providers who are not recommended for funding or not satisfied with their recommended level of funding. The new protest and reconsideration process, proposed in the draft legislation, will be clear and uncomplicated. Under the new process, any provider who is aggrieved in connection with the award of a contract may protest in writing within five working days to the head of the purchasing agency. The head of the purchasing agency or a designee may settle and resolve a protest of an aggrieved provider by, among other things, canceling the proposed award or re-doing the selection process in compliance with the law or rules. If the protest is not resolved by mutual agreement, a written decision must be issued by the purchasing agency. The decision must state the reasons for the actions taken and inform the protesting applicant of the protester's right to further review. Reconsideration of a decision of the head of the purchasing agency regarding an award may be requested by the protesting provider organization. The request for [reconsideration must be submitted to the chief procurement officer in writing within five working days after receipt of the initial decision. The basis for a request for reconsideration is limited to a fraudulent decision or non-compliance with statutes or rules in the solicitation or award of the contract. The chief procurement officer may uphold the previous decision of the head of the purchasing agency or reopen the protest as deemed appropriate. A decision of the chief procurement officer is final. Id. at 48-49. Accordingly, although the SPO's draft legislation was apparently modeled after provisions contained in chapter 103D, the SPO omitted those provisions of chapter 103D concerning judicial review. Compare id. at Appendix B with HRS chapter 103D. In 1997, the legislature adopted the SPO's recommendation to create a separate chapter, chapter 103F, for the procurement of health and human services contracts. 1997 Haw. Sess. Laws Act 190, § 1 at 351. The legislature also adopted, with modifications, the SPO's proposed protest and reconsideration process. See id. Accordingly, the legislature did not import the judicial review provisions of chapter 103D into chapter 103F. Id. The legislative history of chapter 103F indicates that the statute was intended to promote greater fairness, efficiency, effectiveness, and accountability. H. Stand. Comm. Rep. No. 940, in 1997 House Journal, at 1461. The Senate Committee on Ways and Means stated: [T]he intent of providing a separate process for health and human services is to ensure fair and equitable treatment of all those who apply to and are paid to provide those services. Your Committee finds that this process will result in a simpler, standardized process for both state agencies and providers to use, and will optimize information-sharing, planning, and service delivery efforts. S. Stand. Comm. Rep. No 1465, in 1997 Senate Journal, at 1448 (emphasis added). Thus, the majority is correct that one of the purposes of chapter 103F was to promote fairness. Majority opinion at ___ - ___, 277 P.3d at 1005-06. However, in light of the history indicating that the legislature, at the SPO's recommendation, declined to incorporate provisions concerning appeal and judicial review into chapter 103F, it cannot be said that an intent to promote fairness is indicative of an intent to permit judicial review. Rather, for the foregoing reasons, chapter 103F clearly evidences the legislature's intent to preclude judicial review, and to rely upon the administrative review procedures set forth in chapter 103F to provide a fair review process.