Milwaukee’s bid preference law ends

By: James Briggs, [email protected]//July 11, 2011//

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The Milwaukee attorney’s office Monday reported the state budget bill had rendered unenforceable a two-year-old local bid preference ordinance.

The budget, which passed in June, includes language mandating that “except when necessary to secure federal aid, a political subdivision may not use a bidding method that gives preference based on the geographic location of the bidder or that uses criteria other than the lowest responsible bidder in awarding a contract.”

Milwaukee in 2009 passed an ordinance stipulating that if a city-based company’s bid was within 5 percent of the lowest bid, the city must award the contract to the local business. But the state budget language nullifies the ordinance, said Kathryn Block, an assistant city attorney.

“It’s fair to say local bid preference is certainly gone with regard to the Department of Public Works projects that are let by the city of Milwaukee,” Block said. “That much is very clear.”

City attorneys last month also acknowledged the budget bill nullified a local prevailing wage mandate, but said they needed more time to review other ordinances.

The city attorney’s office also is investigating whether the state budget eliminates Milwaukee’s Residents Preference Program, which requires that 40 percent of worker hours on a DPW contract be performed by unemployed or underemployed city residents. Attorneys also are looking into whether the budget changes the Emerging Business Enterprise Program, which provides opportunities for women- and minority-owned businesses.

“We certainly are examining other ordinances as well,” Block said.

The local bid preference, though, was a particular scourge to many contractors and construction industry groups.

“Bid preferences are detrimental to the construction industry,” said Richard Wanta, executive director of the Wisconsin Underground Contractors Association and one of the strongest critics of Milwaukee’s local preference ordinance.

“The profit margin doesn’t allow anyone to have a 5 percent bid preference. It was not good for our industry, and we’re happy to see it gone.”

Menomonee Falls-based United Sewer & Water Inc. wrestled with the local preference since its inception, helplessly watching as Milwaukee’s MJ Construction Inc. won several contracts with higher bids.

“I’ve lost track” of how much work United Sewer & Water lost because of the ordinance, said Scott Maly, the company’s vice president. “In our industry, it really only applied to one contractor — MJ Construction. It was just giving away money to MJ. It was a terrible, terrible ordinance.”

MJ Construction representatives were unavailable for immediate comment, a staff member said.

Jim Boullion, director of government affairs for the Associated General Contractors of Wisconsin, said ordinances such as Milwaukee’s local bid preference could threaten the construction industry at large if they became widespread.

“We don’t like local walls being put up. Contractors, by nature, have to travel to do work,” Boullion said. “While that wall might be good for a contractor on a project or two, it’s a terrible precedent, because there’s not enough work in any one area to support a contractor.

“When a contractor on one side of the street is eligible for a project, and on the other side not, that’s just not good public policy.”

The city attorney’s office, Block said, will advise the city on how the state budget will affect other local ordinances.

“My assumption,” she said, “is (an opinion will come) sooner rather than later.”

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