State Senator Gary LeBeau
May 8, 2008
LeBeau Applauds House and Senate Passage of ‘Reciprocal Preference’ Bill to Keep and Grow Connecticut Jobs
Democratic plan will help local companies secure state contracts, keep more tax dollars and jobs in Connecticut
State Senator Gary D. LeBeau (D-East Hartford), the co-chairman of the Commerce Committee, today welcomed the passage of a bill in the House of Representatives on the last night of the session that will help Connecticut companies better compete for state contracts by providing them with the same type "reciprocal preference laws" that 20 other states already provide to their in-state firms. Senate Bill 679, as amended by LCO 5767, passed the Senate 27-6 on May 3 and passed the House 108-40 around 10 p.m. on May 7. The bill now heads to the Gov. M. Jodi Rell for her signature.
"Some people call this the 'Golden Rule' bill--treat others as you would like to be treated. What we're really doing here is we're evening the playing field against out-of-state companies, and that's a huge benefit for those Connecticut firms who are bidding on our state contracts," Sen. LeBeau said.
By law, state procurement contracts must be awarded to the lowest responsible qualified bidder. When awarding a state contract, the new bill requires state contracting agencies to add to bids submitted by out-of-state businesses a percentage increase equal to any preference that the business receives in its home state (typically 5-15 %).
If the addition results in a Connecticut company becoming the lowest responsible qualified bidder, the agency must award the contract to that Connecticut business if it agrees, in writing, to meet the original lowest responsible qualified bid. The Connecticut business must then make the agreement within 72 hours after receiving notice that the agreement is a prerequisite to the contract award.
If signed into law, the new provisions would take effect October 1, 2009.
Under the new bill, 'out-of-state businesses' are defined as those that do not have a business address in Connecticut and did not pay state unemployment or income taxes during the preceding calendar year. In-state businesses, in addition to paying state taxes and maintaining an in-state address, must affirmatively assert their in-state status on bid submissions.
Currently, Connecticut has hundreds of contracts worth hundreds of millions of dollars with out-of-state companies. Many of those companies are from states that have enacted laws that make it difficult--or even impossible--for Connecticut companies to compete for their state's contracts.
For example, a printing company from Michigan can win a state contract in Connecticut, but the converse is not possible: Michigan sets aside all of its state printing contracts for Michigan companies only. In fact, a Michigan company is now in line to print the 2008, 2009 and 2010 copies of the Connecticut State Register and Manual (the 'Blue Book'.)
Other states that have reciprocal preference laws include:
Alabama: 5% for "preferred vendors"
Alaska: 5%-15% for various target vendors
Arkansas: 15% for correctional industry only
California: 5% for various target vendors (small and micro businesses, businesses operating in an in-state distressed municipality, business operating in an enterprise zone)
Delaware: General preference for in-state public works contractors
Florida: 5% for bidders that use in-state materials
Hawaii: 3%-15% for various types of vendors
Idaho: 10% for printing contracts only
Illinois: 10% for the use of Illinois coal and other various preferences
Indiana: 15% for in-state small businesses
Louisiana: 4%-10% for various target vendors
Nevada: up to 10% for use of recycled products manufactured in-state
New Mexico: 5%
Ohio: 5%
Oregon: all printing set-aside for in-state printers
South Carolina: 7%
Virginia: 4% for coal mined in Virginia
West Virginia: 2.5%-5%
Wyoming: 5% for commodities and construction, 10% for printing
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