To some local governments along the Grand Strand, ordinances giving local companies preference in contracts may not make a big impact, but for Jonathan Martin, the owner of Grass Busters in North Myrtle Beach, it could be the difference between getting a government contract and missing out again.
North Myrtle Beach passed a local vendor preference ordinance in June, and city spokesman Pat Dowling said he expects the new ordinance to have its first test in the upcoming contract to cut the grass along the city’s medians.
Martin says he has had problems competing with low offers from non-local companies in the past.
“A lot of those contracts are really low balled. They try to go really low to get them. A lot of times I won’t really drop my prices an extended amount to get those contracts,” Martin said.
North Myrtle Beach is the latest local government to talk about a local preference ordinance after a push in the last few years by the Myrtle Beach Regional Economic Development Corp., which said the ordinances might help local businesses suffering amid the economic downturn -- especially construction firms.
Georgetown County, Conway and Myrtle Beach also have local preference ordinances, though Myrtle Beach said it hasn’t made much of a difference because much of the work already was going to local businesses. Horry County considered one, but didn’t approve it after council debated whether it would be needed with much of the county work already going to local companies.
In North Myrtle Beach, the ordinance states that a local company within 5 percent of a non-local company’s bid for a government contract more than $10,000 has 24 hours to match the lower bid.
The local business must have operated in North Myrtle Beach for at least a year and has to have proof of paid North Myrtle Beach taxes.
Martin said that the ordinance is making him reconsider attempting to land the contract, and potentially matching a low offer.
“Five percent would probably be an offer that I could work with,” Martin said.
Dowling said that he thinks the ordinance is going to play a part in the day-to-day operations involved with the city.
“Probably where it will come into play more often is the city’s larger service contracts. That would be the city’s mail service, mowing of the medians and along the Main Street Connector, the printing service,” Dowling said. “Those service areas is where it would probably come up more frequently simply because those types of businesses exist to a higher degree in the city.”
Myrtle Beach has had an ordinance similar to that in place for about two years. Myrtle Beach spokesman Mark Kruea says that the city was employing local businesses even before the ordinance was in place.
“I think we were already purchasing most things in the local area or the region, so I don’t know that it’s had a major effect. We were already being pretty responsive to the local community where possible,” Kruea said.
Kruea said that saving the taxpayers money comes first.
“You’re spending the public money and you want to spend as little as possible. You want to get the best value for your money. The local business is closer, doesn’t have transportation costs and is already a good deal,” Kruea said.
Georgetown County’s local preference ordinance says that the local vendor preference only applies for contracts more than $10,000--just like North Myrtle Beach--but Conway’s does not mention the amount as a limiting factor. Georgetown County and Conway use 5 percent as the difference in a bid that the local company can choose to match.
Although other governments approved ordinances, Horry County Council didn’t.
The Myrtle Beach Economic Development Corp. made a push for Horry County to adopt a form of local vendor preference to help stimulate the faltering economy more than a year ago. County Council members couldn’t decide whether the ordinance was needed at a meeting in October 2010, so they asked County Engineer Steve Gosnell to look at the pros and cons.
“The impact of a reduction of up to 5 percent off of local [general contractor’s] bid price will likely have negative impact on the resulting quality of the work and on the flexibility of the contractor during construction,” Gosnell said in a letter to the County Council on Feb. 23, 2011.
Gosnell also found that there doesn’t seem to be a need for local vendor preference because most of the government contracts are handled by local businesses. During the past three years, about 80 percent of construction of vertical facilities—libraries, recreation centers, fire stations and other similar buildings—has been handled by local contractors. In addition, during the last five to 10 years, all road improvements were handled by local businesses.
County Councilman Harold Worley said that the county caters to local companies even without local vendor preference.
“We split up the airport construction into smaller projects. It was such a big project that no local contractor had the expertise to bid on it. We knew if we did it in one fell swoop no local contractor would be able to do it,” Worley said.
North Myrtle Beach will track how the ordinance works during its first year to see if it makes a difference, Dowling said.
Contact BILLY CROSBY at 626-0310