PRINCE FREDERICK, Md. – The Calvert Board of County Commissioners recently adopted a Local Business Preference Program. This program allows the Calvert County Government to pay more for contractors from local businesses. The program begins October 1, 2024.
Typically, when a local government needs a special project or job done, they’ll draft a contract specifying the work to be completed. Businesses will then bid or make offers, and the contract will be awarded to the company that makes the lowest, most affordable bid.
In 2018, Calvert County established a reciprocal preference policy to allow higher bids from local businesses if their competitors from outside the county benefited from a local preference program in their home jurisdictions. Despite this policy, the Calvert Department of Finance and Budget found that local bidders still lost contracts more often than not to outside businesses.
While non-local businesses successfully complete a contract, the money they earned goes with them when they leave. When a local business completes a contract, it’s much more likely to reinvest in itself and other local businesses, the Calvert Department of Finance and Budget found.
The Local Preference Program offers two tiers of benefits for local businesses when they bid for contracts. For informal solicitations, on contracts worth less than $30,000, if a local business is not the lowest bidder, it can still win the contract. To do so, its bid must be within 5% of the value of the lowest bid from an outside business. For formal solicitations, those worth $30,000 or more, this allowance is 5% or $25,000, whichever is lower.
This program may not affect all county contracts. Federal or state law, the terms of grant agreements, emergency conditions or other extenuating circumstances may preclude the Calvert Government from offering local preference to businesses when they make their bids.
The Calvert Board of County Commissioners agreed to adopt the program at their BOCC meeting on September 24. At that meeting, Kristen Bailey Doty offered a public comment. Doty is the Director of Business Development & Project Manager for Scheibel Construction, a company based in Huntingtown, MD. Doty said that other jurisdictions with local preference programs usually used percentages only and did not cap their allowances at specific dollar amounts. Such specific caps would greatly limit the benefit of such programs for local businesses, Doty said.
Bruce Miller, the director of Calvert’s Department of Finance and Budget, suggested in his proposal for this program that county staff should monitor the program and feedback from contractors.
“Recognizing that this is our first attempt at using this new tool to put the public money to work locally,” Miller said, “staff should be prepared to report outcomes and experiences shared with them from the community, and take a directive to return to the Board of County Commissioners periodically for the Board to determine if adjustments are necessary to attain the goals of the local preference program.”
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