Milwaukee’s bid preference questioned

By: James Briggs, [email protected]//July 21, 2011//

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A Milwaukee lobbyist is accusing the city of violating the spirit of a new state law that bans local bid preferences.

Richard Wanta, executive director of the Wisconsin Underground Contractors Association, said the Legislature clearly meant to ban local preferences in the 2011-13 state budget bill.

The city attorney’s office mostly concurs with Wanta’s opinion.

According to the budget bill, “Except when necessary to secure federal aid, a (city) 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 officials, though, say the law allows room for the city to continue in some instances to enforce a 2009 ordinance that provides city-based companies a 5 percent bidding cushion.

“It seems to us this is favoritism, nothing more than circumventing the law,” Wanta said. “Eventually, if they deny a low-bid contractor again, I would think that contractor would challenge them in court.”

Assistant City Attorney Kathryn Block, though, said she was “very confident our position is in complete agreement with the state budget law.”

An opinion signed by Block and City Attorney Grant Langley agrees the state budget bill mostly nullified the Local Business Enterprise program, as the 2009 ordinance is known.

“This prohibition,” the opinion states, “would include, but not be limited to, road and sewer projects.”

The opinion, though, also outlines ways the city can enforce its local bid preference on contracts excluded from the state’s competitive bidding requirement.

The opinion states: “The LBE preference may still be applied to public contracts that are not legally required to be bid, (for instance, engineering services that the city typically procures using a request for proposal), or to contracts let by the purchasing director (for the procurement of goods and services, which do not constitute ‘public contracts.’)”

Scott Maly, vice president of Menomonee Falls-based United Sewer & Water Inc., said he didn’t think the new enforcement of the program would have any effect on businesses such as his, which perform public works construction for Milwaukee.

“Everything I do is a public contract,” he said.

A spokeswoman for state Rep. Robin Vos, R-Burlington, said Vos would have to study the issue before determining whether the Legislature should expand the new law to include more types of contracts. Vos is co-chairman of the Joint Finance Committee, the Legislature’s budget-writing panel.

Even with the law in its current form, though, Wanta said, it’s wrong for the city to retain a policy just because the law didn’t close all potential loopholes.

Wanta also criticized a proposal by Aldermen Jim Bohl and Ashanti Hamilton that would increase the bidding preference for a local company to 10 percent, but also would force it to accept the lowest competitive bid price of the out-of-town company if the local company received a contract through the LBE program.

“It takes a long time and a lot of man-hours to put a bid together,” Wanta said. “If you’re the low bidder, then you lose the job. The city-based contractor doesn’t have to do any of that. He can just put down any number he wants, and the city will give him the job anyway.”

Hamilton did not respond to a request for comment.

Bohl said he only was acting on the city’s legal advice and trying to improve the LBE program to whatever extent the city could enforce it.

“I work the policy,” he said, “and I’ll leave the legality and enforceability to the city attorney’s office.”

Legally, Block said, the city is on solid ground.

“We have read the state law, understand the state law,” she said, “and we are enforcing it to the extent it’s written.”

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