Democratic lawmakers in Lansing have rolled out bills to give a stronger advantage to Michigan companies bidding to do business with the state.
One bill would do give a preference to Michigan-based businesses that bid on state contracts. Another would let Michigan companies get a second chance if they are underbid by an out-of-state firm.
State Senator Curtis Hertel (D-East Lansing) is a bill sponsor. He says other states have similar preference laws.
“Michigan companies are at a disadvantage already,” he said. “And so what we should be doing is making sure in Michigan our tax dollars are going to create Michigan jobs. And this bill will help do that.”
In 2013, the Lansing State Journal reviewed over a thousand state contracts. They found that 78 percent of contract dollars go to in-state companies.
But House Democratic leader Sam Singh (D-East Lansing) says that’s not enough.
“Local businesses contribute significantly more to local economies than out-of-state companies,” said Singh. “Yet, close to 25 percent of the value of state contracts are currently with out-of-state companies. That’s just wrong.”
Critics of similar legislation say it limits competition and can cost taxpayers more money for these state contracts. They also say it could discourage local businesses from providing the best prices.
Michigan currently does give preference for a state contract to an in-state company, but only if all other factors are equal, like project specifications. Hertel says this preference is hardly ever used because two contracts are rarely exactly the same.