Tuesday, August 21, 2012

Dallas Implements a Local Bid Preference Option

At the end of June, the Dallas City Council approved a local bid preference measure that allows them to favor local businesses for certain projects.

Recent changes to state law:  The ordinance takes advantage of recent changes to Texas state law that expands the circumstances where municipal governments are allowed to use local preference.  Last year, the Texas legislature removed population caps restricting the size of cities and counties allowed to implement certain local preferences and raised the maximum amount for purchases using local preference from $100,000 to $500,000.

Different preferences for different contracts:  The new city law gives the city council discretion to award certain contracts to local bidders whose bid is not the lowest, but is within a certain percentage of the low bid. To use local preference on a given project, the city council must make a written determination that it will give the city the best combined benefit considering both project price and economic impact from using a local company. The law allows providing the following percentage advantages to local bidders for contracts of the given types and amounts:

Goods General Services Construction Services
$50,000 - $100,000 5% 5% 5%
$100,000 - $500,000 5% 5% none
above $500,000 3% none none

Additional resources: 
Mike Purdy's Public Contracting Blog 
© 2012 by Michael E. Purdy Associates, LLC 

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