NASHUA — City officials this week stopped short of approving a proposed ordinance that would encourage preference to local vendors, saying the concept needs further review.
The Board of Aldermen voted to send the drafted ordinance, spearheaded by Alderman Ken Siegel, Ward 9, back to an aldermanic committee for additional debate and analysis.
“I think it is reasonable for us to support the local businesses,” Siegel told his fellow board members.
While Alderman-at-Large Brian McCarthy said he is sympathetic to the issue, he maintained that the proposed ordinance may have unintended consequences that might not benefit the city.
“It doesn’t necessarily protect our major employers,” said McCarthy. “I cannot support this ordinance the way it is written.”
Siegel contended that the proposal is a good thing, and seems to be supported by the majority of the local business community.
If adopted, the ordinance would establish a local preference factor to be used when awarding bids to various companies.
According to Siegel’s proposed ordinance, which is being co-sponsored by three other aldermen, a local preference shall be applied to all requests for bids, requests for proposals and requests for quotes for the purchase of goods or services, or for the award of concession contracts.
The preference factor will essentially reduce a local bid by five percent if the contract is for less than $10,000 of work, and reduce a local bid by three percent if the contract is for more than $10,000 of work.
For instance, if there was a local bid of $1,000 and a non-local bid of $980, the local preference factor could be applied and the local bid would be reduced by five percent, down to $950. In that scenario, the local vendor would win the contract.
McCarthy said the ordinance could be abused by local and non-local companies, and might force the city to buy from local businesses, potentially at higher prices. In addition, he said there is the possibility of outside companies renting space in the city so that their firms could apply for the local preference factor.
Siegel said that scenario is unlikely, claiming the ordinance is designed so that it will not cost the city excessive money. There are other, intangible costs to also be considered when dealing with local businesses, including the opportunity for quick responses, prompt corrections and the lack of shipping concerns, he explained.
There is a provision that states local preference will not be applied to any contract associated with federal or state funds. In addition, local preference for bidders or products may be given only when there is no sacrifice or loss in quality, according to the proposal, which is being supported by the Finance Committee.
Still, McCarthy said that if a lot of money is at stake, a vendor could challenge the ordinance.
While the intent may be good, Alderman-at-Large Diane Sheehan said the wording of the proposed ordinance is a concern, suggesting that it be returned to an aldermanic committee for more study. The board agreed.