Published on -10/20/2013, 4:05 PM
At last week's Hays City Commission work session, elected officials were examining bids received for a new truck needed by the city's Utility Maintenance Division. As the vehicle would be used for emergency repairs and maintenance activities, the request for bid included specific requirements such as one-ton payload capacity, diesel engine, towing capability, etc.
Six bids were received, ranging from $40,493 to $59,101. Two bids were made by local dealers with the other four either from out of town or out of state. Following protocol and procedure, city staff is recommending commissioners accept the lowest bid, which came from Bob Moore Ford in Oklahoma City.
For most commissioners, that was all the information they needed in planning their vote for the next meeting. But the newest commissioner, Shaun Musil, was struck by the fact the next lowest bid of $40,897 came from a local dealer -- Lewis Ford Lincoln of Hays.
"I just think we should consider the local dealership," Musil said.
Fair point. The $404 difference is less than 1 percent, and the $40,897 being spent locally will recirculate. Each dollar sent to Oklahoma City will benefit that city's economy.
But this isn't the first time such a point has been raised. Likely, it comes up each time there's a new commissioner sitting at the table.
Commissioner Henry Schwaller IV acknowledged as much when he said: "It's our duty to get the very best product at the lowest price, so we don't have to pass on higher prices to the taxpayer."
Being the best stewards of public money also is a fair point. So fair, in fact, that the 13-page document outlining the city's purchasing policy even includes a section on Local Business Preference. It begins: "No provision is made in this policy for dollar percentage or other types of preferential considerations for local vendors or contractors."
The section does encourage soliciting local bids, and even states local vendors get the bid in case of ties, but no preference can be given in general.
Aside from getting the biggest bang for the buck for taxpayers, there are other possible factors that support the position. City Manager Toby Dougherty said one is the potential for outside vendors to stop submitting bids if the local dealer always wins.
Some governmental bodies have a percent amount that allows local vendors not to have the lowest bid but still get the contract. However, Dougherty said the common belief is that allows local vendors to inflate their bids by that percentage. He also mentioned the possibility exists for gray areas when a bid is $5 outside of that percentage range, causing elected officials to question why 3 percent higher is OK but 3 percent plus $5 is not.
These are good discussions for every governmental body to have. And, more than likely, worth having repeatedly as elected officials come and go. We would hope the Hays City Commission has a robust conversation about the purchasing policy at its regular meeting on Thursday.
Whether the current policy remains in place or if some alterations are made, what we do like is that the policy is detailed and incorporated into a manual. That allows continuity for all transactions -- with no gray areas ripe for misinterpretation.
Editorial by Patrick Lowry