This sounds like a lame excuse to get around laws which requires government contracts to be given to the lowest bidder.
I know the state used to require all contracts over $5,000 to be competitively bid on with the lowers bidder winning the contract.
But once you remove the requirement that the contract go to the lowest bidder it allows the city council members to accept bribes, or campaign contributions as they call them in exchange for handing out contracts which are no longer given to the lowest bidder.
I suspect many of these cities which give the contracts to bidders in their cities who are not the lowest bidder are violation Arizona law.
And of course government bureaucrats who want to give contracts to the special interest groups that they sleep with will sit around all day thinking up ways to get around the law.
I know that Arizona government bureaucrats would take a $20,000 contract and split it into 4 contracts for $4,999.99 in order to get around the competitive bidding laws.
Phoenix-area cities trying to spend locally
By Gary Nelson The Republic | azcentral.com Sat Dec 29, 2012 10:33 PM
Because public money is involved, city purchasing officials have to shop for the best deals — even if that means local tax dollars end up in out-of-town pockets.
But cities across the Valley are seeking ways to give an edge to hometown vendors, who often form the backbone of local economies.
Some policies are less formal than others, driven more by the culture of the city or town hall than by formal directives.
Scottsdale has several ways to keep its money at home, according to Brent Stockwell, strategic-initiatives director for the City Manager’s Office.
On many small purchases, for example, staffers can use what he called “informal processes to buy lower-dollar goods and services” with a bias toward Scottsdale vendors.
Scottsdale keeps its doors open to all comers without requiring registration or prequalification to do business with the city, Stockwell said. And rather than force people to check the city’s website, the city e-mails people who sign up to get notices of bidding opportunities.
Stockwell said because Scottsdale, like many other Valley cities, has a “shop local” mantra, city employees are more likely to look local first. These and other efforts, he said, have resulted in Scottsdale directing 83 percent of its purchasing dollars and 65 percent of its contracting business to Arizona firms.
Tempe reports similar success.
Michael Greene, Tempe’s central-services administrator, said the city funnels nearly 26 percent of its engineering and procurement expenditures to Tempe businesses. Overall, 89 percent of Tempe’s spending stays in state.
Peoria tries to make similar efforts, according to spokesman Bo Larsen. “The materials-management department looks locally for businesses,” Larsen said, “but if a city business can’t meet our needs, obviously it’s open to other businesses who can.”
Peoria often looks outside its borders for construction contracting, Larsen said, because that segment is a relatively weak part of the city’s economy.
Last March, Phoenix adopted a policy affecting goods or services that cost $50,000 or less. The city first has to offer the job to a firm based in Maricopa County or Arizona before it can entertain an out-of-state bid.
“This will do wonders for our local economy,” Phoenix Mayor Greg Stanton said at the time. He had made the change in policy part of his election platform.
Phoenix was one of the first cities in the state and nation to adopt that formal local-first policy.
Across the Valley, cities use a variety of other ways to at least keep local companies aware of government business opportunities. They include:
Sales-tax considerations. Tempe, for example, charges a 2 percent local sales tax and Mesa 1.75 percent. When those cities buy goods from local firms, they are, in effect, paying sales tax to themselves. Tempe and Mesa discount the bids submitted by local firms by 2 percent and 1.7 percent, respectively — enough of an edge, in some cases, to keep the business at home.
Working with local chambers of commerce to alert local firms to opportunities to do business with the city.
Hosting events designed to bring business and government purchasers together. Tempe hosted a large one in its arts center on Dec.3, attracting more than 30 governments and 380 potential vendors. Mesa has staged similar events in partnership with Mesa Public Schools.
Purchasing officials emphasized they are bound by law to give taxpayers the most bang for their buck, regardless of where those bucks are eventually spent.
“We don’t have a formal process where we score higher for local companies,” said Romina Khananisho, intergovernmental-programs manager for Goodyear. “From my understanding, we can’t do that. We are required to follow state statutes and city procurement code.”
Cities also often use cooperative-purchasing contracts negotiated on the state or county level, which sometimes lock them into spending money out of town.
Mesa City Council members, for example, have fretted when out-of-town car dealers received the city’s business under such cooperative arrangements.
Sometimes, on specific projects, cities have better opportunities to keep their dollars at home.
When Mesa awarded Hunt Construction Group the job of overseeing $99 million in spending for a new Chicago Cubs complex and next-door park reconstruction, the city told Hunt to direct 20 percent of that money to Mesa suppliers and subcontractors.
This year, a Mesa contractor complained in an e-mail to City Council members that he had been denied a chance to bid on some of the work.
That drew a quick response from Mayor Scott Smith.
“I get approached constantly by Mesa businesses questioning whether they would be given a fair shot at a piece of the business,” Smith wrote to City Manager Chris Brady. “I have assured them that they would. Are we making sure this happens?”
Brady referred the matter to a city engineer, who said the policy was still in force. Hunt said the contractor in question had been the victim of an oversight, and he promised to keep Mesa companies in the loop.
Still, Brady said — and this applies regardless of what outreach policies a city may have in place — local firms need to understand that “at the end of the day, we still have to go with the most responsive low bid.”
Republic reporters Allison Seligman, Beth Duckett, Dianna M. Náñez, Parker Leavitt, Maria Polletta, John Yantis and Dustin Gardiner contributed to this article.
Tempe Center for the Arts
Tempe Cesspool for the Arts