 Hey, we're back. We're live. I'm Jay Fidelis. You didn't know this is Think Tech Hawaii. And it's a given Thursday. We're happy about that. It's the day of the debate. We're going to see what happens tonight in the debate, the second debate, the presidential debate. Should watch it just to see how people conduct themselves. Okay. And we're talking tax with Tom Tom Yamachiga, the Hawaii Tax Foundation. And we're talking today about the revised suspension of the Hawaii procurement code. That reminds me of the new Borac movie. It's called Borac supplemental movie film. And it's opening also tomorrow. Very interesting. So welcome to the show, Tom. Thanks for having me on the show, Jay. You certainly know all that trivia. I don't consider Borac trivia. I saw the trailer and it's hysterical. And it's now, it's now, you'll see what I mean. It's very now. Very good. So, okay. So we're going to talk about the, we're talking about the procurement code. You know, I, I served on the high tech development corporation, just attached agency. They changed the name since to the Hawaii tech development corporation. And the procurement code was a pretty scary business. But I think it's a good idea to go through all these hoops to get anything done. And a lot of people in government didn't like it much. And I suppose that weighed heavy on David E. Gay, when he suspended it in his earlier proclamation on the subject. So can you talk about the procurement code. We've talked about it before. And can you tell us, you know, what people think of it and thought of it. And why it is at least some degree controversial. The procurement code is the process by which government agencies buy things. So it probably isn't out of most people's memory that, you know, before the procurement code was enacted, it was really the Wild West government could buy from where it knew he didn't have to have competitive bids. You had, you didn't really have to have criteria for considering the competitive bids when they did come in. And it was open to all kinds of arbitrariness and corruption, you know, not that it improved, but at least the possibility was there. The procurement code basically puts a framework around most of that, especially for the large purchases. So that you have sealed bidding for a lot of jobs. You have evaluation using no criteria. The criteria is made available to the bidders during the process. If, you know, one. Non successful bidder thinks that they have been wronged. Under the criteria in the procurement code, they can sue. And there's a process in the statute for that. Okay, now a couple of weeks ago on this show, you may recall, Jay, we talked about the procurement code. And, and I was complaining among other things that the procurement code was suspended in full with just one stroke of a pet. And, you know, let me show you on slide one here. What that looks like. This slide one is a page from the governor's emergency proclamation, the 13th emergency proclamation. As you can see, section 103 D and 103 F are listed in just two lines. And each line says the entire chapter is suspended in its entirety. Okay. Because the intro to the section where these entries are made is the following laws or portions of laws are suspended. Okay, so one sentence wipes out all of 103 D. One sentence. One sentence. One of three is the general procurement code. One of three. As it applies to health and human services. So, you know, is there a reason given? I mean, because this is supposed to be for an emergency. And it strikes me that that's, that's overkill. You don't need to knock out the procurement code. It's not just the time of COVID. Yeah, and that's the point. Yeah. That's what we discussed in our part in our show a couple of weeks ago. And also the point that was made in the civil beat article that came out shortly thereafter. You know, we said, Hey, look, you know, you've got some big, big projects. Like Honolulu rail in the stadium. They are. You know, the biggest expenditure of tax to a taxpayer dollars. Multiple millions, billions of dollars. And. If you tear up the entire process under which these purchases are made. You're going to lose a lot of taxpayer accountability. And apparently somebody was listening. A few days after the civil beat. Story broke. I got an email from. A very high place to, you know, person in not, not the government. But a communications firm. PR firm that was hired by the government. And they said, Oh, you know, you know, we don't do this. You know, we've, we go by the procurement code. Dex goes that by, by the procurement code. You know, everything's fair and above board. And I said, well, you look at, you look at the proclamation. You can't tell that. And, and, and my point is, you know, to the ordinary person. Trying to take a look at what government does. These laws are suspended in full. And what that means is there's no procurement code. There's no. Bidding process required. There is no bid contest process. So, you know, there's no, you know, there's no, you know, there's no necessary or allowed. And you're right. That's overkill. I said, I said in the article, I could see that if we got an actual emergency, we're trying to purchase emergency goods and services. And we don't have the time to, you know, futz around with, with the three months for bidding. Because we're an emergency. I said, I can see that. Even somebody has intended to just myself can see that. And I can't see that. So. Hypothetically. Um, there were, there was a need for masks and ventilators and PPE and what have you. And I'm just wondering, did the state government for that matter, the counties take advantage? I mean, as perhaps they should have. Of the lack of a procurement code in order to acquire. Masks and ventilators and PPE. effect? We don't know. I don't know. It could have happened. I'm not in the industry of providing face masks and stuff like that, so I don't know what the government's procurement documents looked like, if any, if any there were. So, from the time the proclamation came out, till the time you got this email indicating a governor's intention to reverse himself. How much time went by? And I'm asking you that because I know that emergency proclamations have a limited life. They don't last forever. So the question is, how long did this one stay in effect? And what was it consistent with the rule about emergency proclamations last, what, 60 days, I think? Well, you know, what's been happening is one emergency proclamation came out. Proclamations last for 60 days. Okay. And then on the, in the 50th to 59th day, a second emergency proclamation comes out saying, oh, by the way, we were still in an emergency. Emergency conditions still do exist. So I'm, you know, restating the proclamation in full, here it is. So we now have the first supplementary emergency proclamation. Okay. The one that we were talking about in the civil beat article two weeks ago was the 13th supplementary proclamations. So it's number 14 in the series. This is the number of times the proclamation's been renewed. Okay. And the one that came out two days ago was the 14th supplementary proclamation. This is where the changes occurred. So yeah, a couple of weeks ago, a few days later, I got the email. And then, you know, a couple of days ago, which was, you know, maybe a week after I responded to the email, the proclamation comes up with revised language. And let's see what the language says. So let's give you, can you pull up slide number two, please? Okay. So what they're saying in this is that the, is that the public procurement code is suspended only to the extent necessary, limited extent necessary, to procure goods and services in direct response to COVID-19, to procure goods and services using funding that must be expended on or before December 31st, 2020, and to procure goods and services not in direct response to COVID-19, but for which a certain procurement requirements cannot reasonably met through the regular procurement process due to the emergency, which is a much more tailored fix to the procurement codes just whacking it all together. Let's go to slide 2B. Tom, did you say that this was supposed to extend to December 31st, 2020? The proclamations... Because that's more than 60 days. Yeah, no, no. What the proclamation says is that you can suspend this as necessary to procure goods and services using funding that must be expended on or before December 31st, 2020. So in other words, if you're using federal monies that $1.25 billion that came in from the feds, one of the stipulations that the feds put on it was you got to use it, and you got to use it before the end of the year. If you don't, it goes away. Yeah, we've talked about that too. So, so let's take a look at the slide 2B, which is 103F. It's basically the same thing. So for purchases of health and human services, you know, to the limited extent necessary. Okay, I think that's a win. I think that's a win for all taxpayers, for government accountability. And I think it's a testament to, you know, to civil needs and to this show, among other things, because somebody was watching. Somebody thought it important enough to, you know, fix what obviously was messed up. And it was messed up. Yeah, so let me couple of questions come to mind right here at this point in the discussion. Number one is, you know, when the term emergency was used in the enabling legislation, which I suppose was some time ago, to allow the governor to issue emergency proclamations, that's not a matter of rights, it's a matter of statute. That's correct. You're Chapter 127A of the Hawaii Revised Statutes. This is to demonstrate that we need to take a look at that. Because, you know, an emergency would be a hurricane, right? Tidal wave, some kind of dramatic natural calamity. Who knows? Well, you know, I think whenever you have something that results in a bunch of people being carted off in body bags, you have an emergency. Yeah, but the whole time frame is what I'm talking about. So you have a 60-day time frame, but COVID is an emergency. No argument there. That would last much longer. I mean, just, do we have to be more nuanced in that statute now that we've had the COVID experience? Well, I think the statute is broad and it's broad for a reason because you really don't have a way of figuring out what kind of emergency is going to come up, except that it's going to endanger human life, which this obviously did. So my problem is not with the breadth of the statute that says, okay, you have these powers of emergency. What my problem is, is that there are a lot of legal suspensions, law suspensions that are happening that are unrelated to the emergency. And this was one of them before the suspension got revised. What does having a bit contest process have to do with the emergency? My second concern about this conversation so far is let's take rail. So there was a period of time here, you know, see a long period of time where the procurement code was in fact suspended. And theoretically as you have described it from the legal point of view, a lot of agencies including rail could have gone out and bought all kinds of stuff for a lot of money without competitive bidding, without the protections of the procurement code. Did they? Is there any indication of that? I don't know. But what I was told by the in the public relations firm is that the Department of Accounting and General Services had never operated in that manner. And they're the ones who release the checks. So maybe we were safe, maybe the cat didn't run out of the house, the cow didn't run out of the barn door. And my last question, at least at this point in the conversation is, so what about the procurement code? I was telling you that in the Hawaii Tech Development Corporation back 20 years ago, people really had concern about it because it was so bureaucratic and it took so long to get anything. There was a bureaucracy and then there was the procurement code bureaucracy on top of that. And it slowed the state, you know, process down a lot. People would sit on these applications and you couldn't buy anything until you got through the other side. I'm not saying the idea of the code was a bad idea. I'm just saying that the people in government really didn't like it, the ones that I knew really didn't like it. And maybe this raises the question of, you know, I think David Higay and his advisors said themselves, gee, this is a very bureaucratic statute. Nobody likes the statute. Let's suspend the statute because we're in an emergency. Let's just put the whole thing on ice. And part of that, okay, I think part of that is because there's a general culture point about how it is a pain. It is a bureaucratic pain. And I'm wondering if we learned anything about the procurement code here to suggest that maybe it ought to be eased up or changed. Maybe it ought to be brought more current to deal with the realities. We cannot tolerate bureaucracy in this state as it has stymied our growth and development. And it is even more troublesome now that it would stymie our growth and development. So can't something be done to create a more friendly or warmer, more efficient procurement code here? Well, I'm not, I do know that many urban universities hate it. The processes in it are kind of arcane. It could use some streamlining, I think. And I think there's a process that people got to go through to change it. It may involve getting some extra help, and then getting some stakeholders input to come up with something that we hope works better in the current system. It's a balloon in the air. It's an issue that this whole affair has raised, at least in my mind. And someone who should take a look at it. The procurement process in general has been a thorn in everybody's side for years, just as the collective bargaining process has been, just like the permitting process has been. There are a lot of things that are mired in bureaucracy that really shouldn't be that other jurisdictions have a way better handle on than we do. And that we ought to start doing something about it so that we can get ourselves out of this harass and start coming up with functional in a way that the business of government can be conducted with some accountability, but at the same time not take forever. Yeah, I totally agree. I think it's been one of those sacred cow things where nobody wants to talk about it. In ordinary times, the general view around government and around in public, in the public opinion was, well, it may be a pain, but we need it. So let's leave it alone. It's a morass to start trying to change it because it's complicated. Nobody really cares about the technical aspects of procurement. But now that we've had this experience, now that the Civil Pete article appeared and pointing out what was going on, now that there's some publicity going out over the proclamation and the code, maybe now is a good time to start thinking about what we can do. Because now we're at the threshold of a long period of time where the state really has to work to regain its economy. And we cannot afford to have bureaucracy. I mean, today there was a piece about how maybe tourism, which everybody was so excited about a few days ago, 10,000 tourists come, even though that's a 10,000, yeah, even though that's a small number, now it's flattening out. So we think that as long as we open the door to tourism, they're going to be banging at the door. But that's not necessarily so because we have spiking going on all over the country, the world, we have limitations on travel, and the assumption that people would just come as soon as we opened it up, that's proving to be not completely correct. So I think we really have to look at it and these events that you have described make it clear that we have to look at all sides of this and learn by it. But I do want to ask you about the press. I want to ask you about Civil Pete. I want to ask you about the benefit. I mean, from the point of view of the tax foundation and the taxpayers and, you know, efficient operation, honest operation, accountable operation in government. This is a good story, Tom. It's a good story that you wrote the piece in Civil Pete. It's a good story that Civil Pete entertains, you know, articles like that. It's a good story that somebody in the governor's office or perhaps in their public relations firm was looking at what the press was saying. That's all a good story. Yeah, no, I think it's a tremendous win. It's a tremendous win for everybody. I really thank Civil Pete a lot for putting it out there, and I thank you a lot for putting it out there. You know, at some point somebody was listening, so somebody was reading. I'm not really sure which, but the message got through and positive change happened, I think. The, you know, the trend with government has been, you know, shut down everything, you know, close up all communications, suspend everything, and that has been dangerous at least, you know, now I think people are kind of coming to grips with how reckless that was, what the implications were, and hopefully they're changing. Yeah, we have to learn how to be nuanced about this. We have to learn, you know, what the right formula is, and we have to adjust things in the smartest way possible, and we haven't quite learned that, but we are starting to learn that. This is an example of learning that. But you know, I want to go to the question of the media. You know, maybe this is a kind of turning point, although Civil Pete publishes a lot of things, including from you, you know, that are very candid and helpful if somebody would listen, and now somebody, you have evidence that somebody would listen. Maybe we have a new dialogue, a new, what we want to call it, media awareness by government, and I can only think that Civil Pete should do more of this about everything that happens, and you ought to do as much writing as you can. I know it takes time, and we certainly like to do shows about these things, because we think that's the most important thing, you know, news, current news, events, opinions, commentaries, but we try to get, you know, people to take a look at things that mainstream media really hasn't. Sometimes they have, sometimes they have it in so much depth, sometimes they do it in a lot of depth, but we look at it from another angle. So that's what we try to do. When you write a piece, or a piece is published by you, or one of these shows, do you send it along to the governor's office? And Query, will you do that in the future? No, I don't. It just comes out. I'm not, you know, not accountable to the governor or anybody in government about what I write. I do have, you know, my own board check it, but our organization is independent of the governor, so we do things the way we see fit. Of course, but after the fact, after it's published, after this show, if, for example, of a show like this, or an article like you write pretty much all the time, has a lot to do with the government and accountability of the government, then improving the government and all that. They may be on your mailing list, they may be on the civil beat mailing list, they may be on our mailing list, but I think... Well, yeah, I mean, there are people in government who have told me that they read the civil beat to articles regularly, and, you know, elected representatives have told me. So, you know, messages get through, I think, at least to some people. Yeah, the question, you know, the question becomes, is the message succinct enough to get to the right people? But I think, you know, the underlying problem is, you know, I would prefer that there be no scrubs for me to write about. Then, you know, life here in Hawaii would be a lot better, a lot easier, government would be a lot better, and there would be no need for, you know, somebody like me to say, look, what the heck is going on here? Look, what the heck is going on here? Well, I'm thinking that there's a lesson in all of this. There's a lesson, well, to all of us, about trying to address issues like this, and about trying to make sure that the government knows about it, knows that, you know, there's been an article or a show or what have you. The problem is, and I'll tell you my personal problem, is so now we're in election season, and I get an email from people on the mainland who would like me to vote for one state or federal candidate or another, and they all somehow have my email address, and I get not hundreds but thousands of them every day. At the same time, I may get an email from Utah, and my problem is that I've got to sort out the wheat and the chaff. It's cacophony, and so if every single thing that happened, if everybody who was concerned about government wrote to government, it would be cacophony, and the guy at the other end or the girl on the fifth floor or in a PR firm would be covered with these messages and articles and what have you. Inundated. Go ahead. Inundated. Thank you. So I think that also has to be nuanced. It has to be from credible people like you. It has to be a certain interval, not every minute of every day, and it has to be about issues that are not Manini. So that's what we've got to think about. We've got to make this process that you experience in the case of the procurement code happen again, and there ought to be a system by all the players to make sure that what you're saying gets to the right place and that they treat it the right way. Yeah, no, I mean, the first I think big shout that we did was when we filed suit over the rail scan, and it was kind of an extreme way of getting our message heard, but it did get heard, and there was some remedial actions. We lost the, we technically lost the suit, but the rail scan went down from 10% to 1%, and we still called that a huge win for taxpayers, because it was. Yeah. Well, that's certainly something to watch going forward, because as you and I have talked about many times is the state is in fiscal trouble, and the state has to very carefully consider every dime it spends, and it can't fiddle away the money, and we should all be concerned about that. The tax base has gone way down. People are leaving, taxpayers are leaving the state. The state is, the council on revenues is going to find less revenue. There'll be less for the legislature to spend. It has to be very select in how it spends that money. And for that matter, we're not getting any for any further cares money right now. You may not get any for a long time. So if at all, yeah, if at all, yeah. And so, you know, that's that's an area where the tax foundation of Hawaii will be very useful, very helpful to see how we're spending what little resources we have. If it's very important point to honor, that's our main mission is to help, you know, taxpayers, government, and everybody understand what's going on. So, so we can have, you know, fuller discussion and ferrity being. Well, that that's the real emergency, the fiscal emergency, if you will. What did I, what did I read the state deficit is huge now. It's significantly more than it was just just four or five years ago. The state is really unable to pay a lot of bills to with the employees retirement system and others. One reason why that happened is, you know, the governor had to figure out a way to pay current bills. So he said, all right, we're going to defer our contribution to the retirement system and to the health fund. You know, we're going to skip one year, one year's whole payment to the tune of what is it, $500 million. That has consequences. You know, he may not have had a choice because our budget pool is so tired. But the fact of the matter remains as we've made commitments to the employees that we've had, they've earned these health benefits and pension benefits and our state constitution says we can't reduce them. So we've got, we've got debts to pay. Yeah, and we've got unknown liabilities too. I mean, for example, a storm would cost us a fortune. See, see change, see little rise and climate change will inevitably and soon cost us a fortune. We don't have reserves for that. But we need to deal with it in order to save ourselves. So we better get reserves or find a way. Raising taxes is not the simple answer. It's good discipline, fiscal policy, that's the answer. So I'm only saying Yeah, that plus government doesn't have to be everything to everybody. Yes, you know, we need to make sure the services that we're paying for the ones we need and the stuff that we'd like to have. Yeah, maybe that's, that's, you know, time for the day because we don't have the money. Yeah, all I'm saying is, all I'm saying is keep up the good work. Tommy Yamachika, a great success. Congratulations on having an effect on government policy in this case. Talk to you soon with more.