LANSING, Mich. – State Representative Dudley Spade (D-Tipton) today announced that he will be introducing a
bill to allow schools to give Michigan-based firms a preference of up to 10% of the value of the contract over their
out-of-state counterparts when awarding school contracts. House Bill 5639, developed in conjunction with local
school leaders, applies both to construction and supplies contracts and would extend to cover public school systems,
intermediate school systems, and public school academies.
"We must recognize that the public's interest can sometimes be better served by promoting the local economy and
supporting the jobs of parents rather than outsourcing them to other states in order to save a buck," Rep. Spade
said. "When jobs are kept and created here in Michigan, that money
we invest is spent here. Each dollar we invest in Michigan jobs has
an exponential positive impact in the community. This legislation empowers our local officials to take an active
role in buying Michigan first and helping rebuild our state. It is
simply not enough that we recognize the need to support our local economy and promote
Michigan business, we must each take action to make this happen."
Under current law, Michigan schools are required to bid out all
contracts in excess of the bid threshold, a statutory figure that changes annually with the Consumer Price Index
(CPI). For 2007-2008, that threshold is $20,102 for construction, renovation, and remodeling projects and $19,650
for supplies, materials, and equipment contracts. While a school board may bid out a particular contract multiple
times before accepting an offer, a Michigan Attorney General Opinion requires that when they decide to accept a bid the
school board is bound to choose the "lowest responsible bidder." While the provision that the bidder be
"responsible" allows schools to consider the work history and reputation of the contractors so they may ensure that work
is being conducted by a reputable firm, no leeway is given for choosing a local or in-state contractor, even when such a
choice might be a more economically responsible decision for the community or state.
"At this time, with Michigan's struggling economy, it makes sense for
school districts to have some discretion to turn to local business for their contracting needs," Lenawee Intermediate
School District (LISD) Superintendent Stephen Krusich said. "All other things being equal, this legislation would
permit our schools to give preference to local firms, allowing us to do our part to help support the local economy and
continue to give back to the community."
House Bill 5639 would specify that a public school, intermediate school district, or public school academy could, if
they so chose, give a preference of up to 10% of the amount of the contract to a Michigan-based firm and still meet the
requirement of having chosen the "lowest responsible bidder." Similar provisions are already in place at many
levels of government directing purchasing toward certain business sectors such as local business, in-state businesses,
and businesses owned by persons with disabilities or service disabled veterans. However, because of the "lowest
responsible bidder" requirements that apply to schools, additional statute is required to empower them to legally make
that choice.
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