Position Paper: Local Preference in Public Procurement

This paper explores the reasons why NIGP does not support the use of preference policies. NIGP maintains that preference policies, including local preferences, conflict with the fundamental public procurement principles of impartiality and full and open competition. Those who promote preference policies claim advantages of helping and protecting the local economy. However, there are also considerable disadvantages to consider, including an increased cost to taxpayers to implement these types of program, a limitation on supplier competition, and a reduced incentive for local businesses to provide the best value for the dollar of purchased goods and services. While NIGP does not support the use of preference policies, it does support economic, social, and sustainable communities as part of its core values and guiding principles. NIGP acknowledges that governments might adopt local preferences as a tool for improving their local economies and recommends that local procurement preferences only be implemented as one of several criteria in a 'best value' evaluation and award process. This paper examines advantages and disadvantages to local preferences in public procurement and gives an in-depth explanation of why NIGP does not support it as a means of improving local economies.