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Hall County looks to alter contract bid process

Officials weigh giving local businesses an edge while staying competitive

POSTED: August 10, 2014 12:09 a.m.

Hall County officials met last week to discuss possible changes to the way bids are solicited and contracts are awarded, particularly in regards to purchasing orders.

They hope to streamline the process, generate greater interest from local businesses and ensure taxpayers are getting the best service for their dollar.

But the process already is fraught with concern about the difficulty small businesses have in competing with corporate giants. It has some wondering whether a local preference option should be included.

“I would love if every dollar we spend were spent here in the county,” Commissioner Jeff Stowe said. “But where do you draw the line?”

Officials have discussed the possibility of implementing a local preference in recent years, wherein county businesses that can quote a price within a certain percentage of the lowest bidder will be given a leg up.

But the pros have not outweighed the cons, it appears.

Stowe said a local preference could discourage outside companies from bidding.

Commissioner Craig Lutz said he believes a local preference upends the free market by driving up the price for local goods and services.

Lutz added a local preference might also lend itself to conflicts of interest if officials know or do business with county-based companies.

The desire to adjust how contracts are awarded comes on the heels of a recent vote by the Board of Commissioners during a special called meeting Aug. 1.

At that meeting, the board rescinded its earlier vote for the purchase of concrete blocks for construction of the new correctional institute. The contract initially had been awarded to Quality Concrete Block, based in Elberton and Athens.

But when a bid from Home Depot came in later, beating Quality’s price by about $13,000, the board quickly moved to file its purchasing order with the big-box retailer.

And because Home Depot is part of the state-recognized government purchasing cooperative U.S. Communities, county officials were able to negotiate with the retailer outside of the regular bid process.

According to Purchasing Manager Tim Sims, Hall County piggybacked on these state contracts 74 times between July 1, 2013, and June 30, 2014. Sims said more than 1,100 purchase orders were issued during that period.

“The state has performed the bidding process, and these contracts are made available to all municipalities in Georgia to use if they feel it is warranted,” county spokeswoman Katie Crumley said.

Sims said there is no limit to the amount of times the county can use these kinds of prenegotiated contracts.

Meanwhile, Gainesville officials said it was difficult to calculate how many purchase orders or contracts were issued over the last year as a result of the state contracts.

“If it is not competitive, we will do a bid, proposal or quote process,” said Matt Hamby, Gainesville budget and purchasing manager. “Generally, the city uses the state contract for police vehicle and desktop computer purchases. U.S. Communities was not used.”

The unusual step taken to circumvent the typical bid process caught Quality’s owners off guard and drew complaints from some county officials.

“I was in the dark about the whole deal,” said Mark Turner, co-owner of Quality, adding he wished his company would have been given the opportunity to match Home Depot’s price.

Lutz agreed the county was stringing the company along. He wants the bid process changed to work this way: Consult the state contract first to develop a budget, then bid out the contract in a typical request-for-proposal process.

“I believe in competition,” Lutz said. “I realize that having these state contracts, at times, can help expedite the process.”

While expediting the process was crucial in purchasing the concrete blocks for the new prison so the construction timeline was not affected, it may not be the first priority when it comes to awarding contracts.

“One of my concerns right now is we are not getting enough bids,” Stowe said. “I would like to open it up to where our local people don’t feel that it’s a hassle.”

County officials are not required to always accept the lowest bid. They can take into consideration whether they believe the company with the lowest price is also the most responsible.

“No situation is exactly the same,” Stowe said. “You don’t always want to take the lowest bidder.”

Joel Murphy, an account manager with Gainesville-based Reach Technologies, which provides office supplies, printing services and computer repair, said his company has bid on several contracts in the past.

Murphy said his company’s relationship with Hall County is strong and there have never been any problems.

But Murphy also said he understands the value of local preference.

“I would love to know that the county that I live in puts their money in the county, in the (local) businesses,” he said, adding it spurs job creation and economic growth in the region. “I don’t think any small business owner would disagree with that.”


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