Menu

State Legislature

State Contract Preference Critique

ACCE Webmaster on Friday, May 15, 2009 at 12:20:39 am

Local vendor preference ordinances are controversial for chambers.  On one hand, who doesn't want local companies to benefit from government contracting.  On the other hand, a local preference clause in your city, county or state may cause retaliatory government contract provisions when your local companies bid on projects in other cities or states.

Also, it is not always easy to determine which companies are, in fact, local.  Is the engineering firm headquartered in your city that employees 15 people any more "local" than the firm headquartered out of state that has employees 50?

The Detroit News took a different line of questioning.  They published an editorial with a taxpayer-focused critique of state preference legislation pending in Michigan.  Here is an excerpt:

"Michigan lawmakers have been busily working on packages of bills with titles like "Hire Michigan First" and "Buy Michigan First." Unfortunately, the well-meaning legislation involves trade-offs that don't necessarily benefit taxpayers and seem unlikely to have much of an impact on jobs...

Lawmakers say about $13.6 billion of the state's $16 billion in annual contracts go to Michigan businesses -- or about 85 percent. They want to improve that, so one part of the bill package gives Michigan businesses a 10 percent advantage over out-of-state businesses in competing for state contracts. In other words, an in-state firm could bid $1.07 million to print a batch of state park brochures and be considered a lower bidder than a company from another state or country that bid an even $1 million.

The whole purpose of competitive bidding is to restrain government expenses, which, in turn, holds down taxes. The ultimate cost to provide the above example's $700,000 home-field advantage would be borne by taxpayers. Don't they deserve a break?"

Their math is wrong, the scenario they laid out would cost taxpayers an additional $70k not $700k, but the premise holds up.

To read the full editorial, click HERE.

OFFICIAL CORPORATE SPONSORS
Accrisoft is an Official Corporate Sponsor of ACCE American Express is an Official Corporate Sponsor of ACCE Aventura World by Central Holidays West is an Official Corporate Sponsor of ACCE, the Association of Chamber of Commerce Executives Benfits Trust is an Official Corporate Sponsor of ACCE Citslinc is an Official Corporate Sponsor of ACCE Grow With Google is an Official Corporate Sponsor of ACCE Insperity is an Official Corporate Sponsor of ACCE Market Street Services is an Official Corporate Sponsor of ACCE, the Association of Chamber of Commerce Executives United Networks of America is an Official Corporate Sponsor of ACCE The U.S. Chamber is an Official Corporate Sponsor of ACCE Vistage is an Official Corporate Sponsor of ACCE
SILVER SPONSORS
Avalanche Consulting sponsors ACCE, the Association of Chamber of Commerce Executives CardConnect sponsors ACCE, the Association of Chamber of Commerce Executives Constant Contact POWER 10 sponsors ACCE, the Association of Chamber of Commerce Executives Resource Development Group sponsors ACCE, the Association of Chamber of Commerce Executives YouScience sponsor ACCE, the Association of Chamber of Commerce Executives
Sponsorship and advertising opportunities Association of Chamber of Commerce Executives