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Eliminating local preference in bidding process: pro or con?

On Behalf of | Apr 17, 2015 | Construction Law

There are many benefits to supporting locally owned businesses. It can preserve a sense of community, boost the local economy through the recycling of revenue, keep important decisions in the hands of those who live in the area, increase job opportunities for residents and encourage entrepreneurship.

With all of these benefits, is it wrong for cities and counties in Florida to give preferential treatment to local contractors in the bidding process for state-funded construction projects?

While the rules differ in each jurisdiction, local governments are currently allowed to give contractors in their area a higher ranking in the bidding process. Florida lawmakers recently proposed legislation that would take away that authority.

Several Senate committees have already approved the bill proposed by Sen. Alan Hays, R-Umatilla. It is not the first time that this type of legislative action has been proposed, but this version has less of a broad sweep than those in the past. It would only apply to projects in which the state has provided at least 50 percent of the funding.

Contractors across the state are torn as to whether this is a good idea or bad one. Mark Wylie, the president of the Central Florida chapter of the Associated Builders and Contractors Inc. noted that although the group supports the effort, its members are divided.

In support of the measure, Wylie noted that preferential treatment can artificially increase the cost of a government project and discourage competition. Others disagree, arguing that it helps local business compete and that sweeping legislation such as this would pre-empt local government policies, something Orlando City Council member Tony Ortiz says is wrong.

Wylie estimated that preferential treatment gives local businesses a 2 to 3 percent edge. Even with that edge, contract bidding is a complex and competitive process. Anyone submitting one should consider getting some bidding law advice and assistance to avoid potential complications.

Source: Orlando Sentinel, “Bill would curb local preference on government contracts,” Mary Shanklin, April 14, 2015