The Lawrence City Commission will study whether local companies should receive preferential treatment when the city awards contracts in competitive bid situations.
Commissioners decided to take on the issue during their Tuesday meeting, after a local businessman asked them to accept his bid on 660 feet of sludge injection hose rather than purchase the hose from a Michigan-based dealer whose price was $29.60 lower. The city's current policy simply states that the commission should accept the "lowest responsible bid."
Gary Hemon, owner of Industrial Components Inc., Lawrence, told commissioners he thought the difference on $5,200 worth of equipment was small enough that the commission should favor the local company over the out-of-state firm.
"Had there been another area supplier who was even $1 below Industrial Components, or any other supplier, regardless of location, who offered a significant savings to the city, I would have no occasion for being here tonight," Hemon told commissioners.
HEMON SAID he began his industrial supply business in Lawrence 10 months ago. He said he did not seek any tax abatements, zoning variances or other incentives to locate in Lawrence. He told commissioners they should think of the extra $29.60 the city would be paying to him as a "monetarily small, but significant" investment in his business.
Commissioners struggled with Hemon's request, first voting 3-1 to award the sale to the Michigan firm, Liquid Waste Technology. Mayor Shirley Martin-Smith voted against the proposal. Later in the meeting, however, commissioners decided to reconsider the vote.
After some discussion, they tabled awarding the bid until their Nov. 27 meeting. Commissioner David Penny, who is out of the country and was not at Tuesday's meeting, will be back for the Nov. 27 commission meeting. In the meantime, city staffers will begin studying whether other Kansas municipalities offer preferential treatment to local contractors in bidding situations.
COMMISSIONER Mike Rundle originally voted in favor of denying Hemon's request, but he said he saw merit in supporting local companies.
"There is an axiom of economic development that says you try to plug leaks in the community," Rundle said. "If people are going outside of the community to buy things which are available locally, then you're losing that money to the local economy. The fact is that when you buy locally, the money stays in the community and has a multiplier effect."
Martin-Smith said she thought the city should consider a policy that gives preference to local businesses.
"I think there is interest in this community to investigate the possibility of having a slight local advantage, because many major cities in our state do," she said.
Commissioners Bob Schumm and Bob Walters, however, indicated that there could be trouble ahead if bidding procedures are changed to favor any business.
IF THE CITY tinkers with the bidding policy by giving local contractors an advantage, taxpayers can expect to see higher costs, Schumm predicted.
"We've got to balance the concerns of the taxpayer with the livelihoods of the contractors that live in the community. It's a very difficult balancing act," Schumm said.
Walters said the ideal would be to buy locally, "However, this is a free and open bidding situation."