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Group Wants Local Preference In Contracts

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Clergy say bidding advantage would reduce local unemployment

By Chris Levister –

Standing outside the future home of the County of San Bernardino Behavioral Health One Stop Transitional Age Youth Center known as (TAY) veteran construction contractor the Reverend Owusu Hodari sees an opportunity to protect existing local jobs, create new jobs and strengthen the local economy.

Within days the county’s Architecture & Engineering Department is expected to announce the winning bids for the estimated $9M renovation of approximately 29,000 square feet of space for use as administrative offices, counseling, resident housing facilities and support functions, including lighting, telephone and data, security systems and coordination of the resurfacing of the existing parking lot.

The One Stop center is especially designed for unserved, underserved, and inappropriately served 16-25 year olds with mental and/or emotional problems who may be emancipating from: foster care, group homes, the juvenile justice system, or county jail.

Hodari wants the County of San Bernardino to consider giving a bidding advantage to companies that hire a percentage of local workers for construction projects. Hodari, chair of the Inland Empire Concerned African American Churches economic development committee, says language in contracts like the TAY renovation could boost one of the nation’s most troubled economies.

“We’ve got a county struggling with unprecedented 14.3% unemployment. In underserved communities like the San Bernardino Westside, where the jobless rate is between 21% and 45%, it makes no sense for the county to award multimillion dollar contracts to construction companies outside our community only to see them hire workers from other counties and states,” said Hodari. “It’s time for the county to protect its own workforce.”

While he agrees with Hodari that giving local contractors bidding advantage could boost the local economy, county director of Architecture & Engineering (A&E) Carl R. Alban says such preferences are prohibited by state law. He said the question of local preference has come up numerous times over the years.

“We agree programs that help local businesses obtain public work and create local jobs would be the best of both worlds especially because of the economic uncertainty, unfortunately we are governed by the California Public Contract Code which strictly prohibits local preference in “hard” construction procurement.

As such, said Alban “A&E is obligated to award construction contracts to the lowest, most responsive, and most responsible bidder - period.”

Court documents indicate that while eleven states still have local preference laws, they are often a source of much contention.

Ordinances have been tested in courts in Illinois, California, New York, and Georgia and have been held to be unconstitutional. That said Alban insists that the county’s public procurement practices should not be interpreted as exclusionary.

“Often time we get local contractors that are the low bid. So it doesn’t preclude anyone from the process. They just simply need to be the lowest bidder.” Ironically Tuesday morning Alban was preparing to announce winning bids on the TAY project.

“I can’t disclose their names yet but we got lucky,” he said. “The winning bids are locals from Barstow, Riverside and San Bernardino.”

The TAY center is currently housed in crammed quarters across from Building H on the former site of the San Bernardino County Hospital located on Gilbert Street.

The program is funded through the Mental Health Act (MHSA) and the San Bernardino County Department of Behavioral Health.

Alban said A&E strongly encourages small or disadvantage-business enterprise to compete for county construction projects. He says the A&E website at http://www.sbcounty.gov/ae/ is a useful tool for organizations like IECAAC to engage the bidding process and stay abreast of current projects.

“Whether its questions on contractor requirements, sub-contracting, performance requirements or proof of insurance, we recognize the process can be daunting,” said Alban. We’ve taken steps to reach out to a range of community organizations.

Meanwhile Hodari citing eleven states still have local preference laws insists IECAAC is not asking the county to break the law.

“This is about fairness and protecting jobs in the underserved communities. We’re not looking to exclude outside contractors. We’re looking for ways to reinvest our local dollars,” said Hodari.

There are three general types of local preferences: hiring preferences, which require contractors to hire a certain percentage of local workers; purchasing preferences, which require contractors to use supplies or materials that are made locally; and contract award preferences, which give local bidders or proposers an advantage in the award of public contracts.”

Hodari insists carefully worded hiring preferences are permissible in limited contexts through the use of statutes, regulations, ordinances, and written and unwritten policies.

Hiring preferences are the most problematic “because they interfere with contracts between private parties— specifically, contracts between a contractor and its subcontractors,” writes Eileen R. Youens on the University of North Carolina School of Government blog Coates’ Canons. She explains hiring preferences should contain language that has the best likelihood of surviving a constitutional challenge.

“The policy, ordinance, or resolution establishing the preference should be worded to reflect a legitimate interest of the City, such as encouraging local industry, reducing local unemployment, or enhancing the local tax base,” Youens writes.

She said preference should target qualified unemployed resident workers— such as workers that have signed up for unemployment assistance— “rather than targeting all residents, regardless of their qualifications or employment status.”

Youens explains the preference should establish a goal rather than a quota. “In other words, it would require contractors to make good faith efforts to employ resident workers rather than simply rejecting contractors who fail to hire a specific number of resident workers.”

“And the local hiring goal should be based on data regarding how many jobs on public works projects are given to non-local workers when qualified unemployed resident workers are available to perform those jobs,” said Youens.

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