Grand Junction City Council members pushed back against a proposal to give local contractors a leg up when bidding for municipal contracts during a workshop held on Monday, Sept. 14. While elected officials stated a desire to support local businesses, most in attendance were not convinced such a policy would effectively achieve that goal.
City Chief Financial Officer Jay Valentine presented information suggesting that local preference policies could negatively impact competition for city projects, potentially leading to price increases from firms outside the community, and ultimately raising the costs of municipal procurements. Valentine stated that there was no real evidence that such policies guaranteed the money would remain within the city. He also noted that this approach has been tried previously and is becoming less prevalent.
Though no specific policy was formally brought before council members, common local-preference rules involve awarding contracts to nearby firms whose bids are close to the lowest overall offer, even if at a slightly higher cost to taxpayers. The City of Longmont, for example, gives a 7.5% price preference to small businesses with fewer than 35 employees, while Garfield County's policy defaults to local businesses when their bid is within 5% of the lowest non-local bid.
It remains unclear how Grand Junction would define a "local business" if it were to implement such a procurement preference. Longmont's criteria include companies with unrevoked sales and use tax licenses in town, a physical location within city limits, and no outstanding payments or obligations to the city.
Grand Junction Mayor Pro Tem Ben Van Dyke, who initially suggested the measure for council consideration, stated on Monday night that he had changed his mind after further research. Van Dyke said he was finding "more communities that are rolling this kind of policy back than are implementing it." He also expressed confidence in the city's purchasing department and voiced concerns about adding complexity or increasing spending when the city is facing a tight budget situation.
Most elected officials at the Sept. 14 meeting agreed, indicating they did not support strict geographic preferences for municipal contracts. However, the council did call for municipal staff to begin collecting data on the share of city contracts awarded to non-local firms. Staff confirmed plans to start tracking these numbers in the near future, possibly for annual or quarterly presentations to the council.
Council Member Cody Kennedy was the lone dissenting voice, expressing more optimism about the potential benefits of local preferences in the city’s procurement procedures. While acknowledging the lack of hard data and the need to control municipal costs, Kennedy shared an anecdote about a local contractor losing a multimillion-dollar bid to a Wyoming-based business by approximately $50,000, for a project on an employee's home street. Kennedy argued that when employees or corporations are located in another state, this does not have a local economic impact.
Kennedy also proposed an alternative: pursuing a home-state preference, which would favor all Colorado companies rather than strictly local ones, when considering procurement bids. Interim City Attorney Jeremiah Boies stated he would need to research the legality of such a move, noting potential issues related to interstate commerce and federal constitutional concerns if the council chose to pursue that direction.
