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Hernando County commissioners to consider local bidding preferences

BROOKSVILLE — County commissioners face a classic conundrum today: What is better for Hernando — helping local companies get more county business, or keeping a level playing field for all bidders?

Commissioners have talked for months about finding ways to help local businesses hurt by the recession. Hernando County's unemployment rate is hovering near 13 percent and its home-building economic heart has been crippled by the housing bust.

Typically, preference policies give local bidders some percentage-point advantage. For example, if the county picks a 3 percent cushion, even if the local company's bid is 3 percent higher than an out-of-county competitor, the local bidder wins.

During today's workshop on local preference, county purchasing director Jim Gantt will present the pros and cons of such policies and case law on the topic. Then it will be up to the commission to choose a direction.

Florida law makes it clear that competition is a fundamental component of spending public money properly.

"The Legislature recognizes that fair and open competition is a basic tenet of public procurement; that such competition reduces the appearance and opportunity for favoritism and inspires public confidence that contracts are awarded equitably and economically,'' according to a Florida statute.

Commissioner John Druzbick, who has been supportive of the local preference idea, said he has heard both sides from his constituents.

"Folks definitely want to see Hernando businesses working, no doubt about it,'' he said. "But on the other side of the coin, they don't want to pay more because it is a Hernando County business.''

Druzbick said the cost issue may not be as simple as looking at a bid's bottom line. Local businesses might be easier to monitor and easier and cheaper to maintain contact with during a job. Because they're local, they may also be more focused on doing a good job.

"Even if it's slightly higher, I think the benefits can sometimes outweigh the cost,'' Druzbick said. "I'm still looking for the best, lowest responsible bid, with the focus on responsible.''

Giving local firms the advantage in bidding on jobs for the county likely keeps more of the money local and helps area companies, Gantt's planned presentation explains.

The downside can be that reduced competition could cause prices to rise, could lead to price fixing among local firms and, as county officials have warned commissioners before, could raise issues of favoritism.

With the county spending an average of $46 million annually, even an increase of 1 percent will cost the county nearly a half-million dollars. Gantt said the cost would likely be more like 2 or 3 percent because someone is going to have to run the local provider program.

The policy would also answer questions such as the definition of "local.'' That could mean companies with local addresses or those based elsewhere with local employees.

Gantt said there are a variety of ways that could be interpreted.

"What is local? This is not a procurement issue,'' he said. "These are policy, political issues.''

Gantt's presentation also notes that local companies already get about 30 percent of the county's business and have a built-in advantage of being able to offer better bids because they are already in Hernando County.

Commissioners have also been told repeatedly that local preference policies can be legal land mines. Florida case law has not been favorable to local preference policies.

Research by Gantt run through the county's legal department turned up two cases that have made it to the Florida Supreme Court. In each case, the court overturned a government decision to award a bid to the second-lowest bidder because it were local.

Commissioners will also discuss today the process for picking professional service providers such as engineers and architects, which is a different procedure than the bidding process.

Commissioner Jeff Stabins hopes that the commission can find some way to help local businesses.

"In this difficult an economy, you want to try to help out local businesses as much as possible,'' he said. "But we have to remember that our first duty is to the taxpayers. … It's going to have to be a very fine balancing act."

Barbara Behrendt can be reached at behrendt@sptimes.com or (352) 848-1434.

Hernando County commissioners to consider local bidding preferences 07/13/09 [Last modified: Monday, July 13, 2009 8:06pm]
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