When government shows preference for local businesses over out-of-town companies, they walk a fine line.

There is no doubt that we want to keep taxpayer money in Grand County by awarding projects to local businesses whenever possible.

But recently, the county made a last minute decision to choose a local asphalt company over a Denver company for paving work on County Road 41, County Road 396 and Granby's Fourth Street.

The decision raised more than a few eyebrows because the local company's bid was 15 percent higher than the bid commissioners rejected.

As County Attorney Jack Dicola pointed out last week when Denver paving company representatives complained about the fairness of the decision, the commissioners' decisions are covered under state statute that gives counties the ability to grant preference to local residents.

But the problem with the commissioners' decision lies, not in its legality, but in the fact that it seems arbitrary.

It was only in December when local loggers were complaining that the county did not award a beetle-kill tree removal contract to a Grand County business - instead hiring a California company.

At the time, we wrote an editorial titled, “County: Keep local loggers in the loop.”
The pendulum swings.

If the county commissioners vote to hire locally - when that local company comes in with a higher bid - taxpayers complain of fiscal irresponsibility. If they hire out-of-county, they are accused of turning their back on their constituents.

So, how does the county government win in this argument?

The answer is simple. The county needs to take time to draft what is known as a local preference policy.

If we award bids to local companies, no matter the price, it is truly fiscally irresponsible. If we pay 15 percent more for every street and tree and construction job, we will spend ourselves into debt we cannot bear.

But if we set a limit to our local preference, we are still giving area residents the upper hand while eliminating the appearance of unfair practices.

Counties and towns across the nation have instituted local preference policies, often written in a time of growth when there are a lot of contracts on the table.

In Alaska, the Kenai Peninsula Borough established a 5 percent local preference policy. Under this system, a $10,000 local bid is adjusted by 5 percent to $9,500 in the consideration process.

If the adjusted local bid is less than or equal to the bid of the non-local business, the bid is awarded to the local businesses.

Using the same concept, the City of San Jose broke their local preference policy down further.

For bids on goods and services, San Jose gives a 2.5 percent cost advantage to local companies. To small businesses, with fewer than 35 employees, it gives a 5 percent cost advantage. For bids on services, local businesses are given a 5 percent cost advantage - small companies are given a 10 percent cost advantage.

There are other kinds of local preference policies beyond the percentage advantage approach.

There is the “tie bid” preference policy, wherein local contractors are awarded the bid in the case of a tie.

There is also the “absolute” preference policy, wherein the government promises to always purchase from or hire local vendors.

Whatever policies the county decides to create, it is in everyone's best interest to have something on the books.

Now is the time to draft a workable, local preference policy.

We cannot afford a reputation across the state or locally as a government that operates according to whim. Instead, we should develop fair and predictable procedures that will earn us respect, save us time in our decision-making and put a stop to the finger pointing.