Monday, October 22, 2012

Creating Bid Preferences That Don't Cost Agencies More Money

One of the criticisms of local bid preference laws is that a local firm may be awarded a project at a higher price than the out of area firm because their bid price was within the bid preference percentage.  At a time when government agencies are struggling financially, paying more for projects, even if it promotes use of local businesses doesn't seem like sound public policy.

Match the low bid:  Some public agencies have addressed the concern about increased costs associated with preference programs by offering a bid percentage preference to local bidders who must then match the low bid from an out of area bidder in order to be awarded the project.  This results in the agency paying no more than the low bid.

South Carolina:  Rock Hill, South Carolina has established a bid preference program for local bidders who receive a 5% preference, capped at $25,000.  But in order to be awarded the project, the local bidder must match the low bid of a non-local bidder in order to be awarded the project.  For more information, click here.

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

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