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Local firms may get bidding priority for government contracts

TAMPA — With the national and local economies faltering, Tampa Bay's elected officials are looking for ways to help local businesses by giving them an edge on government contracts.

In Pinellas County, commissioners will debate a proposed local vendor preference ordinance at a public hearing today at 6: 30 p.m.

In Tampa, a City Council workshop on a similar rule is scheduled for Aug. 6.

Council member Mary Mulhern proposed the ordinance months ago. Details need to be worked out, but Tampa's plan likely would favor companies in Hillsborough, Pinellas, Pasco, Polk and Manatee counties.

Preference could be awarded by allowing local companies to offer a price 3 to 10 percent higher than outside vendors and still be considered the lowest bidder, or letting them match an outside vendor's lower bid.

In fiscal year 2008, the value of city contracts totaled nearly $231 million.

The Westshore Alliance, which represents the business district, expressed its support for such an ordinance in an April letter to Mayor Pam Iorio, calling it "a proactive, aggressive strategy" during a difficult economy that will "provide immediate operating funds for local businesses."

Council members are divided on the issue.

"We should support local businesses," said council member John Dingfelder. "They could use a shot in the arm, especially during these times."

Although such an ordinance could bump up contract costs, Dingfelder said if they're only 3 percent to 5 percent more, the impact would be minimal.

"The benefits outweigh those additional costs," he said. "If we can keep our money local, then everybody prospers."

Council member Charlie Miranda objects to the idea because of costs, but also on principle.

"I don't like to build walls," he said, noting that the country's free-market economy assumes companies can do business wherever they choose.

If all local governments enact such rules, that means area businesses won't be able to win contracts outside the region, he said.

"It's setting a precedent that's going to come to haunt us long-term," he said.

Such policies, though, are gaining in popularity as local businesses struggle to survive.

This month, Hernando officials pressed ahead with drafting a policy.

The concept also has piqued the interest of Hillsborough County Commission Chairman Ken Hagan. His economic stimulus task force, which included local executives, recently recommended that the county adopt a local preference rule.

Hagan said he first felt the need for such an ordinance last year when, as a member of the Aviation Authority board, he saw a contract go to a New Jersey firm instead of a local company even though the home-grown business trailed the out-of-state company by just a few points.

"I want to do everything we can to help our local employers, but we don't want to be so restrictive or onerous that we adversely impact our regional employers," he said. "You don't want to go too far."

In Pinellas County, the proposed ordinance would give local and regional firms extra points over out-of-town firms for consulting and work including architecture and engineering.

Those contracts are scored based on a point system. Under the proposed ordinance, firms based in Pinellas County would receive a 10 percent bonus. Firms from Hillsborough, Manatee or Pasco counties would get a 5 percent upgrade.

For other competitive bids, a local company would get the contract in the event of a tie.

The new policy would affect about 40 percent of Pinellas' contracts, about $103 million of work.

"I think it's just good politics and its good economics to keep the business local," said architect Steven Klar of Clearwater, who has lobbied for the new policy.

While Pinellas County commissioners are pushing for the policy change, County Administrator Bob LaSala in a May memo called the economic arguments for the idea "dubious."

Noting feedback from other counties, he said "the use of local preference can add time and cost … and is generally agreed to result in higher overall costs of goods and services."

LaSala pressed to include as many as eight counties in the regional category.

That prompted Commissioner Susan Latvala to tell him at a meeting this month that he was circumventing the commission's request.

"It totally defeats the purpose," she said.

State law allows governments to consider location when awarding contracts, but doesn't automatically give locals a bonus.

"We think the state statute does a good job," said Julie Beauvais, spokeswoman for North Carolina-based Kimley-Horn and Associates, an architecture and design firm with offices in Tampa, Lakeland and Sarasota.

Pinellas' chapter of the Florida Engineering Society also opposed the policy in a letter to the county last week because it sets an "unfair advantage."

But commissioners say they want to help local companies.

"The point," said Commissioner Ken Welch, "is to keep the economic benefits here."

Janet Zink can be reached at jzink@sptimes.com or (813) 226-3401.

Local firms may get bidding priority for government contracts 07/20/09 [Last modified: Monday, July 20, 2009 11:33pm]
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