Source: Sherman Publications

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Village closer to making geography part of bidding process

by CJ Carnacchio

December 19, 2012

An amendment to Oxford Village's purchasing ordinance designed to give companies preferential treatment based on geography in the municipality's bidding process is working its way through council.

Last week, council, in a 4-0 vote, approved a first reading of the proposed change and scheduled the second reading and possible adoption for the 6:30 p.m. Tuesday, Jan. 8 meeting. Council chambers are located at 22 W. Burdick St.

The proposal favors businesses and companies located in the United States, Michigan and Oxford Village and Township.

Supplies, materials, equipment or contractual services "made in the United States or provided by a wholly-owned United States entity" that are part of a "responsible bid" submitted to the village and are "within 3 percent of the lowest responsible bid, shall be treated as the lowest bid," according to the proposed language.

A "responsible bid" is one that meets the village's bid specifications and is made by an individual or entity that is considered to be qualified, trustworthy and able to provide the service or product.

The proposed bidding advantage increases to 5 percent when it's a Michigan product or service; 7 percent when it's made or provided by an Oxford Township company; and 10 percent for those goods and services originating from within Oxford Village.

"I think that it's a good formula," said Councilman Elgin Nichols, who originally proposed the idea of giving U.S. companies an advantage in the village bidding process. "I think that it will work. I think it's based on what other communities have done."

Councilman Tony Albensi expressed some concerns he's heard from members of the public.

One of those concerns was the possibility of local contractors in neighboring Orion Township, for example, "automatically" having to lower their bids by a certain percentage in order to compete against contractors based in Oxford.

"That doesn't seem all that fair to me," he said.

Albensi feared it could limit the pool of companies and contractors the village has to choose from.

"I just think this may discourage some people from bidding," he said.

Albensi noted how Detroit once had a "similar" ordinance and "it was repealed shortly thereafter" because a lot of contractors stopped submitting bids to the city.

"I know communities have tried to do this in the past and it's kind of backfired," he said.

Albensi thinks "the premise sounds really good."

"Believe me, I always try to shop for (things) made in the USA," he said. But there are "other considerations we have to think about."

Nichols disagreed.

"As an ex-contractor myself, that's not going to be a deterrent," he said.

He indicated that "most contractors" have an extra 10 to 15 percent built in to their bids in order to leave room to negotiate.

Nichols believes if this ordinance change is enacted, the village will still get bidders.

"I don't think that's relevant at all in this case," he said. "I think this is a good document. If it's not, let the public tell us so."

Just as Albensi's heard "negative" comments about the proposed change, Nichols noted he's heard from people who have called it a "great opportunity" and indicated it will help create more jobs locally and in Michigan.

Councilwoman Maureen Helmuth suggested changing the 7 percent advantage from Oxford Township to Oakland County, but no action was taken.

Councilman Dave Bailey indicated that for him, choosing a bidder is more about their "reputation" and the fact is, the village usually has the inside track if it's good or bad when it comes to local contractors and companies.

"We know them," he said. "That is a legitimate reason for giving them special consideration in the bidding process."

"The reputation factor is more important than this 10 percent scale," Bailey added.