Local First Virginia is a fairly new issue advocacy group formed in the wake of a Richmond contract being awarded to a Denver firm last August. Their focus is to convince local governments and the state to give preferential treatment to Virginia based businesses. On its face this is an honorable notion: the state and local governments should invest in our communities and help create jobs locally by investing in home grown firms. But the problem with protectionism is that it doesn’t take into account any number of factors that play into the process. It’s not just a matter of dollars but ability and overall bang for buck in investment. Local for the sake of local isn’t necessarily fiscally sound.
And an impact study to Senate Bill 79 backs this up. SB79 would grant local companies a second look, allowing them to price match an out of state bid if their initial bid fell within 5% or $10,000 of the lower offer. An impact study hits the downside nail right on its head:
Establishment of procurement procedures allowing state agencies and institutions to match prices from an out-of-state bidder would create an in-state preference. In-state preferences could limit competition and result in the increased costs of goods and services. In addition, preference procurements can increase administrative processing time and delay procurement awards, resulting in increased resource costs for all public bodies falling under the Virginia Public Procurement Act.
What incentive would there be for an out of state company to make a bid on any work in the Commonwealth if they know that their bid is going to get viewed and responded to by in-state agencies? How is offering protectionism making Virginia “open for business”?
And how does this help the taxpayers by allowing for a competitive bidding process that allows companies to offer best bang for buck offers to fulfill Virginia’s needs?
Nevermind the Constitutional questions this creates…
Dollars should not determine an award. Overall quality of past work, proposed work, and cost of investment for return should be the factors that matter most. But we limit Virginia’s ability to get the best of the best nationally when we offer competitive advantages locally.
1/31/12 UPDATE: – SB79 was “passed by indefinitely” by a unanimous vote in the Senate committee on General Laws and Technology on Monday the 30th, shelving the bill for this legislative session.
