Generally, public works construction projects must be procured by competitive bidding. Fla. Stat. 255.20(1). However, the requirement for competitive bidding in Fla. Stat. 255.20 does not prohibit application of any small-business or disadvantaged-business enterprise program or any local-preference ordinance.Fla Stat. 255.20(i).
Local Preference ordinances are used by governmental entities to help local businesses obtain public work, based in part on the belief that helping local business will stimulate the local economy and keep the public funds used for the project local. In addition to local preference ordinances, many entities also provide bidding preferences to minority owned or women owned businesses.
The implementation of local preference ordinances in public procurement is a source of much contention for many reasons. It costs significant time and money for a firm to review, complete, and submit a bid for a public project. So when a low bidder is not awarded the project because of a local preference ordinance, a challenge may likely ensue.
Such ordinances have been challenged on constitutional grounds and for violating public policy which favors awarding contracts to the lowest bidder. Depending on the provisions in place in each local preference ordinace will determine its legality.
In the absence of public policy established by some prohibition in the state or federal constitutions, or in a state statute, including the charter of the city, the determination of whether or not a local bidding preference, such as is given by the above ordinance, is, or is not, in the best interests of the city, is a purely legislative decision to be made by the legislative branch of the city by ordinance, and should not be overturned by the judicial branch of government. See
Federal funding of a project does not automatically prohibit the application of a local preference. One must look at the specific congressional mandate for such funds or the rules of the agency providing the funding. The U.S. Department of Transportation does not permit the application of local preference in jobs its funding.
See United Bldg. and Const. Trades Council of Camden County and Vicinity v. Mayor City of Cleveland v. Ohio, 508 F.3d 827 (2007), ”It is true that Congress has not prohibited the imposition of local hiring preferences on federally funded highway projects. As discussed above, that limitation has resulted from the agency’s interpretation of the statute mandating competitive bidding procedures.”
For an analysis of local preference ordinances in the context of Equal Protection and Due Process constitutional concerns see American Law Reports Article: Validity, construction, and effect of requirement under state statute or local preference ordinance giving local or locally qualified contractors a percentage preference in determinin lowest bids, 89 A.L.R. 4th 587 (1991).
An Example of a Local Preference Ordinance
Broward County – Local Preference Ordinance from the Broward County Procurement Code
Andrew Douglas, P.A., A Florida Commercial Litigation Attorney, Florida Business Attorney, and Florida Construction Attorney. Please feel free to contact us to discuss your legal needs.