DOCUMENT

POL - Doing Business with Local Vendors

  • TYPE OF DOCUMENT: POL - Policies/Procedures
This document discusses the concept of local preferences in governmental jurisdictions and their impact on businesses. Local preferences refer to laws that give financial advantages to companies located in a specific area when competing for government contracts. However, these preferences can also become penalties for companies from the same area when they try to do business in jurisdictions with reciprocal preferences. This can make it difficult for non-local firms to compete and win contracts, potentially raising costs for taxpayers. The document provides an example of how a Wyoming-based company bidding on a Colorado project is penalized by 5% due to the reciprocal preference in Colorado. This penalty makes it challenging for non-local firms to win contracts, especially when bids are decided by small margins. The use of local preferences can also complicate the administrative process of conducting bids and proposals, adding to the time and costs involved. The document mentions that some governmental jurisdictions prohibit the use of local preferences on projects that receive funding from the federal government or involve multiple sources of funding. Several major professional organizations in the field of governmental purchasing and procurement have taken the position that preferences are not cost-effective. The document also discusses how the City of Independence's Purchasing Division communicates with the local business community. They maintain an automated bidder's list and engage in proactive measures such as meetings, trade shows, and attending local business events to support local vendors. The City's commitment to the local business community is considered a cornerstone of their purchasing and procurement policy. The advantages of local preferences, as believed by jurisdictions implementing them, include the support of local businesses and the potential for economic benefits through the recycling of dollars within the local community. Overall, the document provides insights into the impact, challenges, and advantages of local preferences in governmental jurisdictions and emphasizes the importance of balancing support for local businesses with cost-effectiveness and fair competition.
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