Attachment 3 HCDA General Provisions for Construction Contracts.pdf

GENERAL PROVISIONS

FOR CONSTRUCTION CONTRACTS

2008 EDITION

HAWAII COMMUNITY DEVELOPMENT AUTHORITY

DEPARTMENT OF BUSINESS, ECONOMIC DEVELOPMENT AND TOURISM

STATE OF HAWAII

ATTACHMENT 3

Honuakaha Hot Water Return System Modifications

IFB HCDA-CIP-2026-03

PREFACE

The State of Hawaii Procurement Code forms the basis for portions of this General Provisions.

The Hawaii Administrative Rules Procurement Code is not physically included in this General Provisions, but shall govern if any provisions used in this General Provisions are not consistent with the Hawaii Administrative Rules Procurement Code.

Copies of the Hawaii Administrative Rules Procurement Code may be obtained from the State Procurement Office, Department of Accounting and General Services, State of Hawaii, Fourth Floor, Kalanimoku Building Room 416, 1153 Punchbowl Street, Honolulu Hawaii.

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TABLE OF CONTENTS

Title Page

ARTICLE 1 – DEFINITIONS 1

ARTICLE 2 - PROPOSAL REQUIREMENTS AND CONDITIONS 8

2.1 Qualification of Bidders 8

2.1.1 Notice of Intention to Bid 8

2.1.2 Tax Clearance 10

2.1.3 Compliance with the Requirements of Section 103D-310(c), HRS 11

2.1.4 Wrongful Refusal to Accept a Bid 11

2.2 Interpretation of Quantities in Bid Schedule 11

2.3 Contents of Proposal Forms 12

2.4 The Site and Proposed Contract Documents 12

2.5 Addenda and Bid Clarifications 13

2.6 Substitution Before Contract Award 13

2.7 Preparation of Proposal 14

2.8 Bid Security 14

2.9 Delivery of Proposals 16

2.10 Withdrawal or Revision of Proposal 16

2.10.1 Withdrawal of Proposals 16

2.10.2 Modification of Proposals 17

2.11 Public Opening of Proposals 17

2.12 Disqualification of Bidders 17

2.13 Protest 18

2.14 Cost for Plans and Specifications 18

ARTICLE 3 - AWARD AND EXECUTION OF CONTRACT 18

3.1 Consideration of Proposals; Cancellation 18

3.2 Irregular Proposals 18

3.3 Correction of Bids and Withdrawal of Bids 19

3.4 Award of Contract 20

3.5 Cancellation of Award 21

3.6 Return of Bid Security 21

3.7 Requirement of Performance and Payment Bonds 21

3.8 Execution of the Contract 22

3.9 Failure to Execute the Contract 22

3.9.1 Before the Award 22

3.9.2 After the Award 22

3.9.3 Executive Director’s Options 23

3.10 Notice to Proceed 23

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Title Page

ARTICLE 4 - SCOPE OF WORK 24

4.1 Intent of Contract, Duty of Contractor 24

4.2 Changes 24

4.2.1 Minor Changes 24

4.2.2 Oral Orders 24

4.2.3 Field Orders 25

4.2.4 Change Orders 25

4.2.5 Claim Notification 25

4.2.6 Proceeding with Directed Work 26

4.3 Duty of Contractor to Provide Proposal for Changes 26

4.3.4 Pricing or Negotiating Costs Not Allowed 26

4.4 Price Adjustment 26

4.5 Allowances for Overhead and Profit 27

4.6 Payment for Deleted Material 28

4.6.1 Canceled Orders 28

4.6.2 Returned Materials 28

4.6.3 Uncanceled Materials 28

4.7 Variations in Estimated Quantities 29

4.8 Variations in Bottom Elevations 29

4.9 Differing Site Conditions 29

4.10 Utilities and Services 30

4.10.2 Unknown Utilities 30

4.10.4 Restoration of Damaged Utilities 31

ARTICLE 5 - CONTROL OF WORK 31

5.1 Authority of the Engineer 31

5.2 Authority of the Inspector 32

5.3 Authority of Consultant(s) 32

5.4 Shop Drawings and Other Submittals 32

5.4.2 Submittal Variances 35

5.4.3 Review and Acceptance Process 35

5.5 Coordination of Contract Documents 36

5.5.1 Addenda 36

5.5.2 Special Provisions and Proposal 36

5.5.3 Specifications 36

5.5.4 Specification Error 36

5.5.5 Drawings 37

5.6 Interpretation of Drawings and Specifications 38

5.7 Examination of Drawings, Specifications, Project Site 38

5.8 Cooperation Between the Contractor and the HCDA 39

5.8.1 Furnishing Drawings and Specifications 39

5.8.2 Superintendent 39

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5.8.3 Engineering Work 39

5.8.4 Use of Structure or Improvement 40

5.9 Inspection 41

5.10 Removal of Defective, Non-Conforming and Unauthorized Work 41

5.11 Value Engineering Incentive 42

5.11.2 Value Engineering Change Proposal 42

5.11.3 VECP Required Information 42

5.11.4 Required Use of Licensed Architect or Engineer 43

5.11.6 Acceptance of VECP 43

5.11.7 VECP Price Adjustments 44

5.12 Subcontracts 45

5.12.1 Replacing Subcontractors 45

5.12.2 Notice of Replacing Subcontractor 45

5.12.3 Adding Subcontractor 46

5.12.4 Subcontracting 46

ARTICLE 6 - CONTROL OF MATERIALS AND EQUIPMENT 46

6.1 Materials and Equipment 46

6.2 Source of Supply and Quality of Materials 46

6.2.3 Engineer’s Authorization to Test Materials 46

6.2.4 Unacceptable Materials 47

6.3 Substitution After Contract Award 47

6.3.2 Substitution After Contract Award 47

6.4 Asbestos Containing Materials 48

6.5 Test Samples 48

6.6 Material Samples 49

6.7 Non-Conforming Materials 49

6.8 Handling Materials 49

6.9 Storage of Materials 50

6.10 Property Rights in Materials 50

6.11 Assignment of Antitrust Claims for Overcharges for Goods Purchased 50

ARTICLE 7 - PROSECUTION AND PROGRESS 50

7.1 Prosecution of the Work 50

7.1.4 Working Prior to Notice to Proceed 51

7.2 Commencement Requirements 51

7.2.1 Identification of the Superintendent 51

7.2.2 Proposed Working Hours 51

7.2.3 Permits and Licenses 52

7.2.4 Schedule of Prices 52

7.2.5 Proof of Insurance Coverage 52

7.3 Insurance Requirements 52

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7.3.1 Obligation of Contractor 52

7.3.7 Types of Insurance 53

7.4 Permits and Licenses 55

7.5 Normal Working Hours 55

7.6 Hours of Labor 55

7.7 Prevailing Wages 55

7.7.2 Wage Rage Schedule 56

7.7.4 Posting Wage Rate Schedule 56

7.8 Failure to Pay Required Wages 57

7.9 Payrolls and Payroll Records 57

7.10 Overtime and Night Work 57

7.10.2 Overtime Notification 58

7.11 Overtime and Night Payment for State Inspection Service 58

7.11.2 Payment for Inspection Services 59

7.12 Limitations of Operations 59

7.13 Assignment or Change of Name 59

7.13.1 Assignment 59

7.13.3 Recognition of a Successor in Interest Assignment 60

7.13.4 Change of Name 60

7.14 Laws to be Observed 60

7.15 Patented Devices, Materials and Processes 61

7.16 Sanitary, Health and Safety Provisions 61

7.17 Protection of Persons and Property 62

7.17.8 Emergencies 63

7.18 Archaeological Sites 63

7.19 Responsibility for Damage Claims; Indemnity 64

7.20 Character of Workers or Equipment 65

7.20.2 Character and Proficiency of Workers 65

7.20.3 Insufficient Workers 66

7.20.4 Equipment Requirements 66

7.21 Contract Time 66

7.21.2 Calculation of Contract Time 66

7.21.3 Modifications of Contract Time 67

7.21.4 Delays for Permits 67

7.21.5 Delays Beyond Contractor’s Control 67

7.21.6 Delays in Delivery of Materials 68

7.21.7 Delays for Suspension of Work 69

7.21.8 Contractor Caused Delays 69

7.21.9 Reduction in Time 70

7.22 Construction Schedule 70

7.23 Statement of Working Days 71

7.24 Suspension of Work 71

7.24.1 Procedure to be Followed 71

7.24.2 Partial, Total Suspension of Work 72

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7.24.3 Payment 72

7.24.4 Claims Not Allowed 73

7.25 Disputes and Claims 73

7.25.1 Required Notification 73

7.25.2 Continued Performance of Work 74

7.25.4 Requirements for Notice of Claim 74

7.25.6 Final Statement for Claim 74

7.25.10 Decision on Claim/Appeal 75

7.25.11 Payment and Interest 75

7.25.13 Waiver of Attorney’s Fees 76

7.26 Failure to Complete the Work on Time 76

7.26.2 Acceptance of Liquidated Damages 77

7.26.3 Payments for Liquidated Damages 77

7.27 Termination of Contract for Cause 77

7.27.1 Default 77

7.27.2 Additional Rights and Remedies 78

7.27.3 Costs and Charges 78

7.27.4 Erroneous Termination for Cause 78

7.28 Termination for Convenience 79

7.28.1 Termination 79

7.28.2 Contractor’s Obligations 79

7.28.3 Right to Construction and Goods 79

7.28.4 Compensation 79

7.29 Correcting Defects 80

7.30 Final Cleaning 81

7.31 Substantial Completion and Final Inspection 81

7.31.1 Substantial Completion 81

7.31.2 Final Inspection 82

7.31.4 Revoking Substantial Completion 82

7.32 Project Acceptance Date 83

7.32.2 Protection and Maintenance 83

7.32.4 Punchlist Requirements 83

7.32.7 Failure to Correct Deficiencies 83

7.33 Final Settlement of Contract 84

7.33.1 Necessary Submissions 84

7.33.2 Failure to Submit Closing Documents 84

7.34 Contractor’s Responsibility for Work; Risk of Loss 85

7.35 Guarantee of Work 85

7.35.2 Repair of Work 85

7.35.3 Manufacturer’s and Installer’ Guarantee 86

7.36 Work of and Charges by Utilities 86

7.37 Right to Audit Records 87

7.38 Records Maintenance, Retention and Access 87

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ARTICLE 8 - MEASUREMENT AND PAYMENT 88

8.1 Measurement of Quantities 88

8.2 No Waiver of Legal Rights 88

8.3 Payment for Additional Work 89

8.3.4 Force Account Method 89

8.4 Progress and/or Partial Payments 95

8.4.1 Progress Payments 95

8.4.3 Partial Payment for Materials 96

8.5 Prompt Payment 96

8.5.3 Bona Fide Disputes 97

8.5.4 Filing Non-Payment Complaint 97

8.6 Retainage 97

8.7 Warranty of Clear Title 98

8.8 Final Payment 98

8.9 Claims Arising Out of Payment for Required Work 98

APPENDIX - SAMPLE FORMS

Surety [Bid] [Proposal] Bond Performance Bond - Surety Performance Bond - Contractor Labor and Material Payment Bond – Surety Labor and Material Payment Bond – Contractor Combination Performance and Payment Bond Contractor Acknowledgment Form Surety Acknowledgment Form Non-Gratuity Affidavit Form A

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ARTICLE 1 - DEFINITIONS

Whenever the following terms or pronouns are used in these Bidding and Execution of Contract Requirements, and General Provisions, or in any Contract Documents or instruments where these Bidding and Execution of Contract Requirements, and General Provisions govern, the intent and meaning shall be interpreted as follows

1.1 ADDENDUM (plural - Addenda) - A written or graphic document, including Drawings and Specifications, issued by the HCDA during the bidding period which modify or interpret the bidding documents, by additions, deletions, clarifications or corrections which shall be considered and made a part of the bid proposal and the contract when executed.

1.2 ADDITION (to the contract sum) - Amount added to the contract Sum by Change

Order.

1.3 ADMINISTRATIVE RULES - Hawaii Administrative Rules for Chapter 103-D of the

Hawaii Revised Statutes.

1.4 ADMINISTRATOR - The Executive Director, Hawai‘i Community Development

Authority (HCDA).

1.5 ADVERTISEMENT - A public announcement soliciting bids or offers.

1.6 AMENDMENT - A written document properly executed by the Contractor and the

Executive Director and issued to amend the existing contract between the HCDA and the Contractor.

1.7 BAD WEATHER DAY - When weather or other conditions prevent a minimum of four hours of work with the Contractor’s normal work force on controlling items of work at the site.

1.8 BENEFICIAL OCCUPANCY - The point of project completion when the HCDA can use the constructed facility in whole or in part for its intended purpose even though substantial completion may not be achieved.

1.9 BID - See Offer.

1.10 BID SECURITY - The security furnished by the bidder from which the HCDA may recover its damages in the event the bidder breaches its promise to enter into a contract with the HCDA and fails to execute the required bonds covering the work contemplated, if its proposal is accepted.

1.11 BIDDER - See Offeror.

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1.12 BIDDING DOCUMENTS (or SOLICITATION DOCUMENTS) - The advertisement solicitation notice and instructions, Offer requirements, Offer forms, and the proposed Contract Documents including all addenda, and clarification issued prior to receipt of the Offer.

1.13 BULLETIN - A written notice to the Contractor requesting a price and/or time proposal for contemplated changes preparatory to the issuance of a field order or change order.

1.14 BY OR TO THE ENGINEER - To avoid cumbersome and confusing repetition of expressions in these General Provisions, it is provided that whenever the following words or words of like import are used, they shall be understood as if they were followed by the words “by the Engineer” or “to the Engineer”, unless the context clearly indicates another meaning: contemplated, required, determined, directed, specified, authorized, ordered, given, designated, indicated, considered necessary, deemed necessary, permitted, reserved, suspended, established, approval, approved, disapproved, acceptable, unacceptable, suitable, accepted, satisfactory, unsatisfactory, sufficient, insufficient, rejected or condemned.

1.15 CALENDAR DAY - Any day shown on the calendar beginning at midnight and ending at midnight the following day. If no designation of calendar or working day is made, “day” shall mean calendar day.

1.16 CHANGE ORDER - A written order signed by the Engineer that establishes the full payment and final settlement of all claims for direct, indirect and consequential costs, including costs of delays, and establishes any adjustments to contract time related to the work covered and affected by one or more field orders, or for change work done or agreed to be done without issuance of a separate field order. A change order signed by all the parties to the contract constitutes a supplemental agreement.

1.17 COMPLETION - See SUBSTANTIAL COMPLETION and FINAL COMPLETION.

1.18 COMPTROLLER - The Comptroller of the State of Hawaii, Department of Accounting and General Services.

1.19 CONSULTANT - A person, firm or corporation having a contract with the HCDA to furnish services with respect to the project.

1.20 CONTRACT - The written agreement between the Contractor and the HCDA by its

Executive Director, by which the Contractor is bound to furnish all labor, equipment, and materials and to perform the specified work within the contract time stipulated, and by which the HCDA is obligated to compensate the Contractor therefor at the prices set forth therein. The contract shall include the Contract Documents and also any and all amendments and change orders that are required to complete the construction in an acceptable manner.

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1.21 CONTRACT COMPLETION DATE - The calendar day on which all work on the project, required by the contract, must be completed. See CONTRACT TIME and

FINAL COMPLETION.

1.22 CONTRACT DOCUMENTS - The Contract, Addenda (which pertain to the Contract

Documents, Contractor’s Proposal (including Wage Schedule, List of Subcontractors and other documentation accompanying the Bid and any post bid documentation submitted prior to the Notice of Award) when attached as an exhibit to the Contract, the Notice to Proceed, the Bonds, these GENERAL PROVISIONS, the SPECIAL PROVISIONS, the Specifications and the Drawings as the same are more specifically identified in the Contract together with all written Amendments, Change Orders, Field Orders, a written order for minor changes in the work and Engineer’s written interpretations and clarifications issued on or after the effective date of the Contract.

1.23 CONTRACT PRICE - The amount designated on the face of the contract for the performance of work including allowances for extra if any.

1.24 CONTRACT TIME (or CONTRACT DURATION) - The number of calendar (or working) days provided for completion of the contract, inclusive of authorized time extensions. The number of days shall begin running on the effective date in the Notice to Proceed. If in lieu of providing a number of calendar (or working) days, the contract requires completion by a certain date, the work shall be completed by that date.

1.25 CONTRACTING OFFICER - The Executive Director of the Hawaii Community

Development Authority.

1.26 CONTRACTOR - Any individual, partnership, firm, corporation, joint venture, or other legal entity undertaking the execution of the work under the terms of the contract with the State of Hawaii, and acting directly or through its agents, or employees.

1.27 DEPARTMENT - The Department of Business, Economic Development and Tourism

(abbreviated DBEDT), State of Hawaii.

1.28 DRAWINGS (or PLANS) - The contract drawings in graphic or pictorial form, which show the design, location, character, dimensions and details of the Work to be done and which shall be a part of the Contract Documents.

1.29 ENGINEER - The HCDA Director of Planning and Development, acting either directly or through authorized assistants.

1.30 EQUAL OR APPROVED EQUAL - Whenever this term is used in the drawings or specifications, it shall be interpreted to mean a brand or article, prequalified in accordance with Section 6.3 SUBSTITUTION AFTER CONTRACT AWARD, that may be used in place of the one specified.

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1.31 EXECUTIVE DIRECTOR - Executive Director, Hawai‘i Community Development Authority.

1.32 FIELD ORDER - A written order issued by the Engineer or the Engineer’s authorized representative to the Contractor requiring the contract work to be performed in accordance with a change or changes in the work. A field order may (1) establish a price adjustment and/or time adjustment in an amount the Engineer believes is reasonable for the change; or (2) may declare that the Engineer does not intend to adjust contract time or price for the work; or (3) may request the Contractor to submit a proposal for an adjustment to the contract time and/or price by a certain date.

1.33 FINAL COMPLETION - The date set by the Executive Director that all work required by the contract and any amendments or changes thereto is in full compliance with the contract.

1.34 FORCE ACCOUNT - Term used when Work is ordered to be done without prior agreements as to lump sum or unit price cost thereof and is to be billed for at cost of labor, materials and equipment, insurances, taxes, etc., plus an agreed percentage for overhead and profit.

1.35 GOODS – Materials.

1.36 GUARANTEE - Legally enforceable assurance of the duration of satisfactory performance of quality of a product or Work.

1.37 HAZARDOUS MATERIALS - Any and all radioactive materials, asbestos, polychlorinated biphenyls, petroleum, crude oil, chemicals known to cause cancer or reproductive toxicity, pollutants, contaminants, toxic substances or materials cited in Hazardous Material Laws. Abandoned motor vehicles or parts thereof are not hazardous material.

1.38 HCDA - Hawai‘i Community Development Authority acting through its authorized representatives.

1.39 HOLIDAYS - The days of each year which are set apart and established as State holidays pursuant to Chapter 8, Hawaii Revised Statutes.

1.40 INSPECTOR - The person assigned by the Contracting Officer to inspect and monitor construction operations.

1.41 JOBSITE COMPLETION DATE - The date when on-site construction must be completed.

1.42 JOBSITE START DATE - The date when on-site construction may start.

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1.43 LAWS - All Federal, State, City and County Laws, ordinances, rules and regulations, and standard specifications, including any amendments thereto effective as of the date of the call for sealed bids.

1.44 LETTER OF AWARD - A written notice from the Executive Director to the successful bidder(s) stating that its proposal has been accepted by the State.

1.45 LIQUIDATED DAMAGES - The amount prescribed in the General Provisions, Section

7.26 FAILURE TO COMPLETE THE WORK ON TIME to be paid to the State or to be deducted from any payments due or to become due the Contractor for each working day or calendar day (as applicable) delay in completing the whole or any specified portion of the work beyond the Contract Time.

1.46 MAJOR UNIT PRICE ITEM - A unit price item which, when extended on its estimated quantities in the proposal form, exceeds five percent (5%) of the total base bid proposal less any allowance and contingent items included in the proposal.

1.47 NON-CONFORMING WORK - Work that does not fulfill the requirements of the

Contract Documents.

1.48 NOTICE TO CONTRACTOR - See Solicitation.

1.49 NOTICE TO PROCEED - A written notice from the HCDA to the Contractor establishing the applicable Contract Duration, Project Start Date, Jobsite Start Date, Jobsite Completion date, and Contract Completion date.

1.50 OFFER (or BID) - The executed document submitted by an Offeror in response to a solicitation request, to perform the work required by the proposed Contract Documents, for the price quoted and within the time allotted.

1.51 OFFER FORM (or BID FORM) - The form prepared by the HCDA on which the

Offeror submits the written offer or bid. By submitting an offer or bid, the Offeror adopts the language on the form as its own.

1.52 OFFEROR - Any individual, partnership, firm, corporation, joint venture or other legal entity submitting directly or through a duly authorized representative or agent, an Offer for the work or construction contemplated.

1.53 POST CONTRACT DRAWINGS - Drawings issued after the award of the contract for the purpose of clarification and/or changes to the work indicated in the original drawings and which may be made a part of the contract.

1.54 PROJECT ACCEPTANCE DATE - The calendar day on which the Engineer accepts the project as sufficiently completed in compliance with the contract so that the State can occupy or utilize the Work for its intended use. See SUBSTANTIAL COMPLETION.

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1.55 PROJECT CONTRACT LIMITS (or CONTRACT ZONE) - The portion of the site as delineated on the drawings, which define the Contractor’s primary area of operation for the prosecution of the work. It does not define the exact limits of all construction that may be required under the contract.

1.56 PROJECT CONTROL BUDGET - The amount of funds set aside for the construction of the Project.

1.57 PROJECT GUARANTEE - A guarantee issued by the Contractor to the HCDA. See

GUARANTEE.

1.58 PROJECT START DATE - The date established in the Notice to Proceed when the

Contractor shall begin prosecution of the work and the start of contract time.

1.59 PROPOSAL (BID) - See Offer (or Bid).

1.60 PROPOSAL FORM - See Offer Form (or Bid Form).

1.61 PUNCHLIST - A list compiled by the Engineer (or Contractor) stating work yet to be completed or corrected by the Contractor in order to substantially complete or finally complete the contract requirements.

1.62 QUESTIONNAIRE - The specified forms on which the bidder shall furnish required information as to its ability to perform and finance the work.

1.63 SHOP DRAWINGS - All drawings, diagrams illustrations, schedules and other data or information which are specifically prepared or assembled by or for Contractor and submitted by Contractor to illustrate some portion of the Work.

1.64 SOLICITATION - An Invitation to Bid or Request for Proposals or any other document issued by the HCDA to solicit bids and offers to perform a contract. The solicitation may indicate the time and place to receive the bids or offers and the location, nature and character of the work, construction or materials to be provided.

1.65 SPECIAL PROVISIONS - Supplements or modifies the standard clauses of the

GENERAL PROVISIONS setting forth conditions or requirements peculiar to the individual project under consideration, which are not thoroughly or satisfactorily covered, described or explained in these GENERAL PROVISIONS.

1.66 SPECIFICATIONS (or TECHNICAL SPECIFICATIONS) - That portion of the

Contract Documents consisting of written descriptions for materials, equipment, construction systems, standards, workmanship, directions, provisions and requirements that pertain to the method and manner of performing the work and certain administrative requirements applicable thereto.

1.67 STATE - The State of Hawaii acting through its authorized representative.

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1.68 SUBCONTRACT - Any written agreement between the Contractor and its subcontractors, which contains the conditions under which the subcontractor is to perform a portion of the work for the Contractor.

1.69 SUBCONTRACTOR - An individual, partnership, firm, corporation, joint venture or other legal entity, as covered in Chapter 444, Hawaii Revised Statutes, which enters into an agreement with the Contractor to perform a portion of the work for the Contractor.

1.70 SUBSTANTIAL COMPLETION - The status of the project when the Contractor has completed all the work and (1) all utilities and services are connected and working, (2) all equipment is in acceptable working condition, (3) additional activity by the Contractor to correct punchlist items as described herein will not prevent or disrupt use of the work or the facility in which the work is located, and (4) the building, structure, improvement or facility can be used for its intended purpose.

1.71 SUPERINTENDENT - The employee of the Contractor who is charged with the responsibility of all the Work.

1.72 SURETY - The qualified individual, firm or corporation other than the Contractor, which executes a bond with and for the Contractor to insure its acceptable performance of the contract.

1.73 UNUSUALLY SEVERE WEATHER - Uncommonly harsh weather including but not limited to hurricanes, tornados, tropical storms and tropical depressions, or as otherwise defined in the SPECIAL PROVISIONS.

1.74 WORK (or CONTRACT WORK) - The furnishing of all labor, materials, equipment, and other incidentals necessary or convenient for the successful completion of the project and the execution of all the duties and obligations imposed by the contract.

1.75 WORKING DAY - A calendar day, exclusive of Saturdays, Sundays and State-recognized legal holidays for the month in question.

ABBREVIATIONS

HAR Hawaii Administrative Rules

HRS Hawaii Revised Statutes

VECP Value Engineering cost Proposal

DOTAX State Department of Taxation

IRS Internal Revenue Service

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ARTICLE 2 - PROPOSAL REQUIREMENTS AND CONDITIONS

2.1 QUALIFICATION OF BIDDERS - Prospective bidders must be capable of performing the work for which bids are invited, and must be capable of entering into a public contract of $25,000 or more.

2.1.1 Notice of Intention to Bid

2.1.1.1 In accordance with Section 103D-310, HRS, and Section 3-122-

108, Hawaii Administrative Rules, a written notice of intention to bid must be filed for the construction of any public building or public work when the bid is $25,000 or more. A written notice of intention to bid need not be filed for the mere furnishing and installing of furniture, equipment, appliances, material and any combination of these items when a Contractor’s license is not required under Chapter 444 of the HRS, as amended, and the rules and regulations of the Contractor’s License Board.

2.1.1.2 The written notice must be addressed to the Executive Director, Hawai‘i Community Development Authority, who is the officer charged with letting the contract. The words, “INTENTION TO BID” must be clearly written or typed on the face of the envelope containing the written notice of intention to bid. The notice may be faxed, hand carried or mailed to the office indicated in the Notice to Bidders.

2.1.1.3 The written notice must be received by the office(s) indicated in the Notice to Bidders no later than 2:00 p.m. on the 10th calendar day prior to the day designated for opening bids. If the 10th calendar day prior to the day designated for opening bids is a Saturday, Sunday, or legal State holiday, then the written notice must be received by said office no later than 2:00 p.m. on the last working day immediately prior to said Saturday, Sunday, or legal State holiday. The written notice will be time stamped when received by said office. The time designated by the time stamping device in said office shall be official. If the written notice is hand carried, then the bearer is responsible to ensure that the notice is time stamped by said office. If the notice is faxed, the time of receipt by the HCDA fax machine shall be official.

2.1.1.4 It is the responsibility of the prospective bidder to ensure that the written notice of intention to bid is received in time and the HCDA assumes no responsibility for failure of timely delivery caused by the prospective bidder or by any method of conveyance chosen by the prospective bidder.

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2.1.1.5 If two (2) or more prospective bidders desire to bid jointly as a joint venture on a single project, they must file an affidavit of joint venture with their notice of intention to bid. Such affidavit of joint venture will be valid only for the specific project for which it is filed. No further license is required when all parties to the joint venture possess current and appropriate contractor’s licenses. Joint ventures are required to be licensed in accordance with Chapter 444 of the HRS, as amended, and the rules and regulations of the Contractor’s License Board when any party to the joint venture agreement does not hold a current or appropriate contractor’s license. The joint venture must register with the office of the Director of Commerce and Consumer Affairs in accordance with Chapter 425 of the HRS, as amended.

2.1.1.6 No persons, firm or corporation may bid where (1) the person, firm, or corporation, or (2) a corporation owned substantially by the person, firm, or corporation, or (3) a substantial stockholder or an officer of the corporation, or (4) a partner or substantial investor in the firm is in arrears in any payment owed to the State of Hawaii or any of its political subdivisions or is in default of any obligation to the State of Hawaii or to all or to any of its political subdivisions, including default as a surety or failure to perform faithfully and diligently any previous contract with the Department.

2.1.1.7 The Executive Director may, in accordance with Section

103D-310, HRS, require the prospective Bidder to submit answers to questions contained in the STANDARD QUALIFICATION

QUESTIONNAIRE FOR OFFERORS, ISSUED BY THE

PROCUMENT POLICY BOARD, JUNE 16, 2003, on the form provided by the HCDA, properly executed and notarized, setting forth a complete statement of the experience of such prospective Bidder and its organization in performing similar work and a statement of the equipment proposed to be used, together with adequate proof of the availability of such equipment, at least two

(2) working days prior to the time advertised for the opening of bids. If the information in the questionnaire proves satisfactory, the Bidder’s proposal will be received. All information contained in the answers to the questionnaire shall be kept confidential. The questionnaire will be returned to the Bidder after it has served its purpose.

2.1.1.8 If upon review of the Questionnaire, or otherwise, the Bidder appears not fully qualified or able to perform the intended work, the Executive Director shall, after affording the Bidder an opportunity to be heard and if still of the opinion that the Bidder is

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2.1.1.9 Failure to complete and submit the prequalification questionnaire by the designated deadline will be sufficient cause for the HCDA to disqualify a prospective Bidder.

2.1.2 Tax Clearance

2.1.2.1 Contractors are required to provide both state and federal tax clearances as a prerequisite to entering into a public contract of $25,000 or more. To meet this requirement, all Bidders shall submit valid tax clearances with their bid proposals when the bid is $25,000 or more. An additional tax clearance will be required before final payment can be made.

2.1.2.2 Tax clearances may be obtained by completing the Tax Clearance

Application (Form A-6) and submitting it to the Hawaii State Department of Taxation (DOTAX) or the Internal Revenue Service (IRS). The application may be obtained from the DOTAX or the IRS. The application may be mailed in or walked in to either the DOTAX or the IRS. Both tax agencies encourage the use of their mail-in process, which should be completed within twenty-one

(21) calendar days. Tax clearance certificates will be issued to the applicant upon determination that the applicant has filed all tax returns due, and has paid all amounts owing on such returns, including penalty and interest.

2.1.2.3 Only original tax clearance certificates or certified copies will be accepted for this purpose. Failure to submit the required tax clearance certificates may be sufficient grounds for the HCDA to refuse to receive or consider the prospective bidder’s proposal.

2.1.2.4 Tax clearance certificates are valid for six (6) months. The six-month period will begin with the later approval date stamped on the tax clearance. Only an original copy of a tax clearance that bears an original green certified copy stamp will be accepted by the HCDA for final payment. The period of validity is for tax clearance certificate for final payment is two months.

2.1.2.5 The tax clearances submitted with the bid proposals must be valid on the solicitation’s first legal advertisement date or any date thereafter up to the bid opening date. Valid tax clearances submitted with the proposal will remain valid for the contract award and encumbrance.

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2.1.2.6 Any person, firm or corporation that is not presently doing business in the State of Hawaii and submits a Notice of Intention to Bid must submit along with said Notice of Intention to Bid a certified letter stating that said person, firm or corporation is not doing business in the State of Hawaii and is not in default of any obligations due to the State or any of its political subdivisions.

2.1.2.7 If a business cannot obtain a tax clearance certificate because of tax delinquencies, it may submit a “special letter” from DOTAX and/or the IRS. The “special letter” may only be obtained if (1) the business has an existing installment agreement with the tax agency, or (2) the delinquency is the subject of an administrative or judicial appeal. The bidder is cautioned that the “special letter” from the IRS must be certified by DOTAX. All conditions applied to tax clearance certificates for this purpose are applicable to these “special letters”. Instructions to obtain the “special letter” are available from each respective tax agency.

2.1.2.8 Various combinations of tax clearance certificates and “special letters” are acceptable for this purpose as follows:

(a) Tax clearance certificate signed by both tax agencies;

(b) Individual tax clearance certificates from each tax agency, respectively;

(c) Tax clearance certificate from one tax agency and a

“special letter” from the other tax agency;

(d) “Special letters” from both tax agencies.

2.1.3 Compliance with the Requirements of Section 103D-310(c), HRS - All

Offerors must comply with the requirements set forth in HAR §3-122-112 upon award of contract. Failure to meet the requirements of HAR §3-122-112 will result in contract not being awarded to the Offeror.

2.1.4 Wrongful Refusal to Accept a Bid - In the event the Executive Director, for any reason, wrongfully refuses to accept what would otherwise be a responsive and responsible lowest bid, the exclusive remedy for such lowest bidder shall be the recovery of the reasonable actual costs of preparing the bid.

No other bidder shall have any claim for damages. Refer to 2.13 PROTEST.

2.2 INTERPRETATION OF QUANTITIES IN BID SCHEDULE

2.2.1 When quantities for individual items of work are listed in the proposal form for which respective unit prices are asked, said quantities are estimated or

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2.2.2 After determining the low bidder by comparison of bids submitted in accordance with the proposal form and Section 3.1 CONSIDERATION OF PROPOSALS; CANCELLATION in these specifications, the quantities of unit price items of work may increase or decrease.

2.2.3 On unit price bids, payment will be made only for the actual number of units incorporated into the finished project at the unit price bid, subject to Section

4.7 VARIATIONS IN ESTIMATED QUANTITIES.

2.3 CONTENTS OF PROPOSAL FORMS

2.3.1 Prospective bidders will be furnished with proposal forms giving the location, description, and the contract time of the work contemplated for which a lump sum bid price is asked or containing a schedule of items, together with estimated quantities of work to be performed and materials to be furnished, for which unit bid prices and/or lump sum bid prices are asked.

2.3.2 All papers bound with or attached to the proposal form shall be considered a part thereof and shall not be detached or altered when the proposal is submitted.

2.3.3 The drawings, specifications and other documents designated in the proposal form will also be considered a part thereof whether attached or not.

2.3.4 By submitting a bid on the proposal form, a bidder accepts the language therein as its own.

2.4 THE SITE AND PROPOSED CONTRACT DOCUMENTS

2.4.1 The Bidder shall examine carefully the Project Site contemplated and the proposal, drawings, specifications, supplemental specifications, SPECIAL PROVISIONS, and any documents or items referenced therein and contract and bond forms therefore. The submission of a bid shall be considered as a warranty that the Bidder has made such examination and is informed of the conditions to be encountered in performing the Work and of the requirements of the drawings, specifications, supplemental specifications, SPECIAL PROVISIONS and any documents and items referenced therein, and contract and bonds.

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2.5 ADDENDA AND BID CLARIFICATIONS

2.5.1 The terms and requirements of the bid documents (i.e., drawings, specifications and other bid and Contract Documents) cannot be changed prior to the bid opening except by a duly issued addenda or bid clarification.

2.5.2 The HCDA may alter, increase or decrease the scope of the work or the contract time, provisions and conditions by issuing a written addendum, which sets forth such alterations, increase or decrease.

2.5.3 Bid Discrepancy - If a bidder discovers what it considers to be a discrepancy, ambiguity, omission or doubt as to the meaning of drawings, specifications and any other bid or Contract Documents, the bidder shall request interpretation in writing no later than 14 days before the bids are opened.

2.5.4 Addenda to the bid documents will be provided to all prospective bidders at the respective offices furnished for such purposes. Each addendum shall be an addition to the Contract Documents.

2.5.5 Upon providing an addendum, all bidders shall be deemed to be on notice of the information therein whether or not the addendum or bid clarification is actually received. All addenda and bid clarifications so issued shall become part of the Contract Documents.

2.5.6 No claim for additional compensation and/or time for performance will be allowed if the Contractor discovered, or in the exercise of reasonable care, should have discovered a discrepancy, ambiguity, omission or doubt for which an interpretation was not requested.

2.6 SUBSTITUTION BEFORE CONTRACT AWARD

2.6.1 For substitutions after the Letter of Award is issued; refer to Section 6.3

SUBSTITUTION AFTER CONTRACT AWARD.

2.6.2 Unless specifically required otherwise in the Contract Documents, Offerors shall not submit products, materials, equipment, articles or systems for review or approval prior to submitting their Offers.

2.6.3 Offerors shall prepare their Offer forms based on the performance requirements of the materials, equipment, articles or systems noted on the drawings and specifications. If trade names, makes, catalog numbers or brand names are specified, Offeror shall infer that these items indicate the quality, style, appearance or performance of the material, equipment, article, or systems to be used in the project.

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2.7 PREPARATION OF PROPOSAL

2.7.1 The Bidder’s proposal must be submitted on the proposal form furnished by the HCDA. The proposal must be prepared in full accordance with the instructions thereon. The Bidder must state, both in words and numerals, the lump sum price or total sum bid at which the work contemplated is proposed to be done. These prices must be written in ink or typed. In case of a discrepancy between the prices written in words and those written in figures, the words shall govern over the figures. The Bidder shall sign the proposal in the spaces provided with ink. By submitting a bid, the Bidder adopts the language of the proposal as its own.

2.7.2 If the proposal is made by an individual, the person’s name and post office address must be shown in the space provided. If made by a partnership the name and post office address of each member of the partnership must be shown and the proposal signed by all partners or evidence in the form of a partnership agreement must be submitted showing the authority of the partner to enter, on behalf of said partnership, into contract with the HCDA. If made by a corporation the proposal must show the name, titles, and business address of the president, secretary and treasurer and also evidence in the form of a corporate resolution must be submitted showing the authority of the particular corporate representative to enter on behalf of said corporation into contract with the HCDA. If made by a joint venture the name and post office address of each member of the individual firm, partnership or corporation comprising the joint-venture must be shown with other pertinent information required of individuals, partnerships or corporations as the case may be. The proposal must be signed by all parties to the joint-venture or evidence in the form of a Joint-Venture Agreement must be submitted showing the authority of the joint-venture’s representative to enter on behalf of said joint-venture into contract with the HCDA.

2.7.3 Pursuant to the requirements of Section 103D-302, HRS, each Bidder shall include in its bid the name of each person or firm to be engaged by the Bidder on the project as joint contractor or subcontractor indicating also the nature and scope of work to be performed by such joint contractor and/or subcontractor and their respective contractor’s license number. A joint contractor or subcontractor performing less than or equal to one percent of the total bid amount is not required to be listed in the proposal. The Bidder shall be solely responsible for verifying that their joint contractor or subcontractor has the proper license at the time of the submitted bid.

2.8 BID SECURITY

2.8.1 Subject to the exceptions in §3-122-223(d), HAR, all lump sum bids of

$25,000 and higher, or lump sum base bids including alternates of $25,000

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-15-and higher, that are not accompanied by bid security are non-responsive.

Pursuant to §3-122-222(a), HAR, bid security shall be one of the following:

2.8.1.1 Surety bid bond underwritten by a company licensed to issue bonds in this State which shall be substantially in the form of the Surety Bid Bond form in the Appendix; or

2.8.1.2 Legal Tender; or

2.8.1.3 Certificate of Deposit; Credit Union share certificate; or cashier’s, treasurer’s, teller’s or official check drawn by, or a certified check accepted by, and payable on demand to the HCDA by a bank, a savings institution, or credit union insured by the Federal Deposit Insurance Corporation or the National Credit Union Administration.

(a) These instruments may be utilized only to a maximum of

$100,000.

(b) If the required security or bond amount totals over

$100,000, more than one instrument not exceeding $100,000 each and issued by different financial institutions shall be accepted.

(c) CAUTION - Bidders are cautioned that certificates of deposit or share certificates with an early withdrawal penalty must have a face value sufficient to cover the maximum penalty amount in addition to the proposal guaranty requirement. If the certificate is made out to two names, the certificate must be assigned unconditionally to the HCDA.

2.8.2 Unless otherwise stated, the bid security shall be in an amount equal to at least five percent (5%) of the lump sum bid or lump sum base bid including alternates or in an amount required by the terms of the federal funding, where applicable.

2.8.3 If the Bidder is a corporation, evidence in the form of a corporate resolution, authorizing the corporate representative to execute the bond must be submitted with the proposal. If the Bidder is a partnership, all partners must sign the bond or evidence in the form of a partnership agreement must be submitted showing the authority of the partner.

2.8.4 If the Bidder is a joint venture, all parties to the joint venture must sign the bond; provided, that one party to the joint-venture may sign on behalf of the joint-venture if evidence in the form of a joint-venture agreement or power of

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-16-attorney, is submitted showing the authority of the signatory to sign the bond on behalf of the joint-venture.

2.8.5 In the case where the award will be made on a group or item basis, the amount of bid security shall be based on the total bid for all groups or items submitted.

2.8.6 Bidders are cautioned that surety bid bonds which place a limit in value to the difference between the bid amount and the next acceptable bid, such value not to exceed the purported amount of the bond, are not acceptable. Also, surety bid bonds that place a time limit on the right of the HCDA to make claim other than allowed by statutes or these GENERAL PROVISIONS are not acceptable. Bidders are hereby notified that a surety bid bond containing such limitation(s) is not acceptable and a bid accompanied by such surety bid bond will be automatically rejected.

2.9 DELIVERY OF PROPOSALS - The entire proposal shall be placed together with the bid security, in a sealed envelope no smaller than 9-1/2” x 12” so marked as to indicate the identity of the project, the project number, the date of bid opening and the name and address of the bidder and then delivered as indicated in the Notice to Contractors. Bids, which do not comply with this requirement, may not be considered. Proposals will be received up to the time fixed in the public notice for opening of bids and must be in the hands of the official by the time indicated. The words “SEALED BID” must be clearly written or typed on the face of the sealed envelope containing the proposal and bid security.

2.10 WITHDRAWAL OR REVISION OF PROPOSAL - Proposals may be modified prior to the deadline to submit the offers by any of the following documents.

2.10.1 Withdrawal of Proposals

2.10.1.1 A signed, written notice received in the office designated in the solicitation; or

2.10.1.2 A written notice faxed to the office designated in the solicitation;

or

2.10.1.3 A telegraphic message received by telephone by the office designated in the solicitation from the receiving telegraph company office, provided the telegraph company confirms the telephone message by sending a written copy of the telegram showing that the message was received at such office prior to the time and date set for the opening.

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2.10.2 Modification of Proposals

2.10.2.1 A written notice received in the office designated in the solicitation, stating that a modification to the offer is submitted;

and

2.10.2.2 The actual modification sealed securely in a separate envelope or container, accompanying the written notice.

2.11 PUBLIC OPENING OF PROPOSALS - Proposals will be opened and read publicly at the time and place indicated in the Notice to Bidders. Bidders, their authorized agents and other interested parties are invited to be present.

2.12 DISQUALIFICATION OF BIDDERS - Any one or more of the following causes will be considered as sufficient for the disqualification of a Bidder and the rejection of its proposal or proposals:

2.12.1 Non-compliance with Section 2.1 QUALIFICATION OF BIDDERS.

2.12.2 Evidence of collusion among bidders.

2.12.3 Lack of responsibility and cooperation as shown by past work such as failing to complete all of the requirements to close the project within a reasonable time or engaging in a pattern of unreasonable or frivolous claims for extra compensation.

2.12.4 Being in arrears on existing contracts with the State of Hawaii, or having defaulted on a previous contract with the State of Hawaii.

2.12.5 Lack of proper equipment and/or sufficient experience to perform the work contemplated, as revealed by the Standard Questionnaire and Financial Statement for Bidders.

2.12.6 No contractor’s license or a contractor’s license which does not cover type of work contemplated.

2.12.7 More than one proposal for the same work from an individual, firm, partnership, corporation or joint venture under the same or different name.

2.12.8 Delivery of bids after the deadline specified in the advertisement calling for bids.

2.12.9 Failure to pay, or satisfactorily settle, all bills overdue for labor and materials of former contracts in force at the time of issuance of proposal forms.

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2.12.10 Debarment or suspension pursuant to the provisions of Chapters 103D, 104 and 444, HRS, as amended.

2.13 PROTEST

2.13.1 Protests shall be adjudicated in accordance with §103D-701, HRS and as amended.

2.13.2 No protest based upon the contents of the solicitation shall be considered unless it is submitted in writing to the Executive Director, HCDA prior to the date set for the receipt of proposals.

2.13.3 A protest of an award or proposed award pursuant to §103D-302 or §103D-

303, HRS, shall be submitted in writing to the Executive Director within five

(5) working days after the posting of the award of the Contract.

2.13.4 In addition to any other relief, when a protest is sustained and the protestor should have been awarded the contract under the solicitation but is not, then the protestor shall be entitled to the actual costs reasonably incurred in connection with the solicitation, including bid or proposal preparation costs but not attorney’s fees.

2.14 COST FOR PLANS AND SPECIFICATIONS - The amount paid by the prospective bidders in order to obtain the plans and specifications shall not be refunded. Bidding documents do not have to be returned to the HCDA. The cost of the bidding documents shall be as indicated in the “Notice to Contractor”.

ARTICLE 3 - AWARD AND EXECUTION OF CONTRACT

3.1 CONSIDERATION OF PROPOSALS; CANCELLATION - After the proposals are opened and read, the figures will be extended and/or totaled in accordance with the bid prices of the acceptable proposals and the totals will be compared and the results of such comparison shall be made public. In the event of a tie bid, the low bidder shall be determined by lot. In the comparison of bids, words written in the proposals will govern over figures and unit prices will govern over totals.