Local preference rule on government contracts an ineffective gimmick

The Hernando Commission just can't resist feel-good, but ineffective, public relations gimmicks. It is again considering skewing its procurement rules to benefit local bidders. Last week, with virtually no comment, the commission scheduled a July 23 public hearing to consider a proposed ordinance giving preference to Hernando vendors trying to sell goods and services to county government.

It is at least the fifth time since 2008 that commissioners have considered rewriting their rules even though their own attorneys and the previous purchasing staff frowned on this poor public policy which has the potential to raise taxpayers' costs.

Commissioners would do well to read their own purchasing policies, updated just 16 months ago, before considering the proposed ordinance. The county's standards delineated on page two of the 74-page procurement manual include promises: To deal fairly and equitably with all suppliers wishing to do business with Hernando County; to maximize competition for all procurements; and to purchase goods and services at the lowest price, consistent with quality, performance, and delivery requirements from capable suppliers meeting the county's requirements.

In other words, whoever bids to provide the best product at the best price will get the county's business. Except, under the proposed ordinance, none of that matters if you have a local zip code. Fair treatment, maximum competition and lowest prices no longer apply.

The misguided plan calls for giving local companies a 5 percent credit on contracts up to $500,000. Local companies bidding on projects exceeding that amount can get a 3 percent discount and other considerations by documenting local vendors to be used as subcontractors. Essentially, a local company bidding within 5 percent of the lowest bid coming from an out-of-towner can be awarded the contract.

The commission's desire to spend more government money locally is understandable, but the proposed ordinance can increase the cost of government services and shut the best companies out of the bidding process. It also has limited benefit to the vendors it is suppose to help because local companies already account for roughly 30 percent of the county's purchases.

Commissioners, some of whom pride themselves on reducing the cost of government, should consider the wisdom of adopting a policy interfering with the free-market competition that normally drives down the price of goods and services to the public.

The modern bid system provides the best protection for taxpayers because it encourages competition and fairness. Commissioners, charged with the duty of being stewards of the public purse, need to ensure the public receives the best product for the best cost, regardless of the address of the supplier.

Local preference rule on government contracts an ineffective gimmick 06/29/13 [Last modified: Thursday, June 27, 2013 5:13pm]

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