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Monday, January 28, 2013

Editorial - Local bidders

As published in the Record Journal Monday January 28, 2013

If worded carefully, an ordinance allowing for local bidder preference in awarding municipal contracts would have benefited Wallingford. Town councilors rejected this concept on Jan. 22, after discussing it in previous meetings. The proposed guideline would grant local companies an advantage in seeking contracts put out to bid by Wallingford. If a business based in the municipality did not offer the lowest price, but came within a certain percentage of this bottom figure, the business could match the low bid and win the contract.

There are downsides. Aware of a local-preference clause, out-of-town companies might not make bids. This could mean fewer businesses competing for a contract and, thus, potentially higher costs paid by Wallingford for work.

Another problem, alertly brought up by Mayor William Dickinson, would be how to conclude which companies are and are not locally based. But, as wisely suggested by Councilman Jason Zandri, checking business filings with the state could definitively determine where a company is technically located.

Moreover, it’s unclear whether bids would actually dwindle after establishment of a local-preference ordinance. In Connecticut, 29 percent of municipalities have enacted a similar law, including Meriden and North Haven. And, as argued by Councilman Craig Fishbein, because of these existing ordinances, Wallingford companies could be losing out on contracts in nearby towns and cities, and, therefore, could use additional help in their own zip code.

As presented in our news account of Dec. 22, local preference protocols in Meriden and North Haven are reasonably worded. In Meriden, to enact the program, a city-based company’s bid cannot be more than 10 percent higher than the bottom bid. In North Haven, a local business’ bid has to be within 10 percent of the lowest on items under $1 million, 5 percent of purchases between $1 million and $5 million, and 3 percent on anything more than $5 million.

Which is to say that this can be done, if implemented correctly. Based on Meriden and North Haven laws, the key is to retain a fair, fighting chance for bidders from outside municipal borders. Those two civic governments give local businesses only a marginal advantage, as not to foster favoritism or impinge greatly upon free market economics. Should Wallingford leaders seek a boost for in-town companies — and why wouldn’t they? — they could do so with similarly worded regulations.

This is a concept councilors should reconsider. By granting local businesses a second chance to match low bids under still competitive circumstances, councilors could direct taxpayer money toward town based companies, allowing Wallingford to support better its own economy.

Wallingford Local preference proposal fails

As published in the Record Journal, Thursday January 24, 2013

By Russell Blair
Record-Journal staff
(203) 317-2225

WALLINGFORD - A proposal to give local companies preference on municipal contracts died recently when the Town Council’s Ordinance Committee declined to pursue the issue further.

Under the proposal, bids on contracts would be invited as usual. If a local company was not the low bidder, but within a certain percentage of the lowest bid, the firm would be awarded the contract at the lowest bid price.

Bill Abildgaard, a town resident and owner of Leed Construction, asked councilors last month for the ordinance change, reviving a discussion that began in February 2012.

“When you award to a local contractor or a local business, that money stays in town,” he said. “We buy our trucks from Valenti. We buy our insurance from a local insurance company. Most of our supplies are from Wallingford, our employees are from Wallingford.”

But Republican Town Councilor John LeTourneau said he was worried a local preference would turn away out-of-town firms from bidding on municipal projects, leading to less competition and ultimately higher costs to the town.

“If they aren’t bidding on a level playing field, then they might think twice about submitting a bid,” he said.

About 29 percent of Connecticut’s municipalities, including North Haven, Meriden, Middletown and Hamden, have some sort of local bidder preference program, In Meriden, a city-based company’s bid cannot be more than 10percent higher than the lowest bid to enact the program.

Republican Councilor Craig Fishbein said Wallingford has taken steps to help local companies, inserting language in bidding ordinances that says the town must give preference to local firms on projects that are below the bid threshold of $7,500.

Fishbein said he hopes to enlist help from the town’s legislative delegation to propose that the state abolish local bidding preferences. He said he had heard from local contractors who lost work in other towns despite submitting the lowest bid.

“I found out we are surrounded by towns that have these preferences,” Fishbein said. “It’s being used against our people.”