Council should seriously consider ‘local bid preference’
Published 7:03 am Friday, May 31, 2013
For the past several years, I have written several times in this space about the assertion that establishing a local bid preference, relative to the major purchases made by both the City of Bainbridge and Decatur County, was a smart thing to do.
With the recent action by our neighbors to the north, the city of Albany, we now have a workable, sensible and wise plan which we could easily enact locally. This past week, the Albany City Council passed an ordinance that would allow local vendors whose bid is within two percent of the non-local low bid to match the low bid.
I encourage both the city of Bainbridge and Decatur County to seriously analyze, consider, and enact a similar ordinance for Bainbridge and Decatur County businesses. In this environment of somewhat stagnant sales tax revenues, any time that you can create a situation where sales tax revenues are stimulated, you have created economic growth.
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Here’s an example of how the process might work. Company A from Macon offers a bid of $10,000 to sell the City of Bainbridge a tractor, for example. Company B is located in Bainbridge and its bid is $10,195. As it currently stands, Company A would win the bid, the city would buy the tractor from Company A and never see any of that $10,000 again. That amount, most likely, would be spent in Macon.
So, we traded a $195 savings on the tractor for a potential $70,000 impact — seven times the $10,000 purchase price — in our community.
Using the City of Albany method, Company B would have the opportunity to match the $10,000 bid, by virtue of being a local company. Most companies that I am familiar with would match that low bid in an instance to earn the sale.
In my view, the percentage “gap” between the non-local low bidder and the local bidder should be more than 2 percent, but that would be an item that could be discussed and decided on by each governmental body. I believe 5 percent would be a better benchmark.
This type of arrangement, where local bidders are given some type of preference over out-of-town bidders, is a quickly-growing trend nationwide. Municipal governments all over the country are beginning to understand, and utilize, the generally accepted economic theory that every dollar spent locally turns over locally seven to eight times.
While both the city of Bainbridge and Decatur County have discussed this type of arrangement in the past, a written, enacted ordinance has never come close to be adopted. Only cursory views were given to a local bidder preference arrangement.
Now is the time to bring this back to the table and seriously consider such an approach to the procurement policies of both governments.