NC House Government Defeats Bidding Bill Opposed by CAGC

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The NC House Government Committee on May 2 defeated, at least for now, a bill that would give local bidding preferences on public construction work to companies that are based in the municipality or county where the work is to be done for that local government unit.  The Carolina AGC strongly opposed this bill.

In an 18-11 vote, the committee defeated a motion to refer House Bill 284 out of the committee without prejudice. That means that the bill, rather than moving to House Finance without a yes or no vote, stays for now in House Government, where it technically still is alive at least until the current May 16 crossover deadline for the bill to have to clear the House to remain alive.

Under the bill, municipal or county governments could give a 5 percent bidding advantage, or $10,000, whichever is less, to a bidder whose principal place of business is located in that jurisdiction if the low bidder’s principal business is not located within that jurisdiction. If, for example, a DurhamCounty high school were being built, and a contractor with a principal place of business there was within 5 percent, or $10,000, whichever is less, of a low bid submitted by a Wake County-based contractor, the DurhamCounty contractor could match the Wake contractor’s bid and get the work.

“This is not good for business,” Rep. Mike Stone, committee co-chair, said during debate on the bill.

CAGC strongly opposes the bill, which is supported by the NC League of Municipalities, because it would result an un-level playing field for the construction industry and what could be a worse deal for taxpayers with more limited competition on public work.  CAGC opposes the bill as it could:

* Limit the number of bids in the traditional competitive, sealed-bid process on public work in North Carolina. The more competition there is on public work, the lower the bids.

* Unfairly penalize contractors, whose principal place of business were not located within that local government jurisdiction, who still would have to spend significant time and resources on bids that could be undercut by others. That climate could have a chilling effect on the public bidding process at a time when the construction industry continues to struggle because of the economy.

* Unfairly penalize contractors whose principal place of business are located in municipalities or counties with little or no construction work occurring. If they tried to bid on work elsewhere, they would be a competitive disadvantage.

* Legislate against the free enterprise system.

Meantime, a companion bill, Senate Bill 232, is alive in Senate Rules and your opposition is needed by clicking here and quickly taking action.  Read More.