Milwaukee might expand preference law
Published: October 12, 2009
Tags: American Sewer Services Inc., American Subcontractors Association of Wisconsin Inc., B and B Painting Corp., bidding, lawsuit, Milwaukee, MJ Construction Inc., preference, Prism Technical Management and Marketing Services LLC, Underground Pipeline Construction Inc.
The regional market around Milwaukee would be better served if the city kills its local-business preference rather than tweaking it to broaden the pool of participants, according to a contractor association leader.
“In some regards, I wish they would do it sooner rather than later,” said Jeffrey Beiriger, executive director of the American Subcontractors Association of Wisconsin Inc. “The larger issue is one that needs to be addressed: Is this a good idea in the first place?”
Yet Milwaukee aldermen are focusing on the details of the law with a proposal to revise the preference to include Milwaukee businesses that don’t own land in the city. The revision is intended to help companies such as B and B Painting Corp., which has been in business for 10 years in Milwaukee but has always leased land.
“At this time, I’m glad I don’t own a building, per se,” said Bennie Joyner Jr., president and owner, “because it may be tough to make your mortgage payments.”
Most of the small and minority contractors in the city cannot qualify for Milwaukee’s local business preference because they operate from leased land or out of the company owner’s home, said Randy Crump, a senior associate for Milwaukee’s Prism Technical Management and Marketing Services LLC, Milwaukee.
Milwaukee gives local businesses a 5 percent cushion when bidding contracts against contractors from other cities. But the law requires the company own the Milwaukee land from which it operates.
Prism, which monitored minority participation on the renovation of Milwaukee City Hall, does not qualify because it leases its office space, Crump said.
“That’s a very common occurrence,” he said. “So we’re hopeful that whatever’s done will address that issue.”
Alderman Ashanti Hamilton said the local-business preference is intended to include companies whose headquarters are in the city, regardless of whether they own the property. Hamilton, city attorneys and city procurement officials are working on a revision to the law so such companies are included.
“It hasn’t hurt them yet,” he said, “so we would hate for a situation to come up.”
But it could make it more difficult for, say, a West Allis painting company to compete for Milwaukee work. If there are more Milwaukee companies with a 5 percent bidding cushion competing for work, the city runs the risk of limiting competition and, ultimately, paying more, Beiriger said.
“Competition, in its purest form, is more likely to result in lower prices or, leastwise, better value,” he said.
Hamilton said the revision will not have any bearing on — and was not prompted by — a lawsuit filed last week against the city that challenges the local business preference. The lawsuit, filed by Underground Pipeline Construction Inc., New Berlin, and American Sewer Services Inc., Rubicon, argues MJ Construction Inc. should not qualify as a local business because its owner, Michael Tomasini, owns the land on which it operates.
Hamilton said the details of the revision are being worked out as he and others try to strike a balance that lets Milwaukee-based companies participate without leaving loopholes for contractors outside the city.
“Any time you are trying to cover all of your bases with any type of ordinance that is going to have a broad impact,” he said, “you have to just be careful there are no unintended impacts.”
The impact, Beiriger said, will be more out-of-city contractors challenging the legality of Milwaukee’s law.
“There is going to be a continuation of lawsuits filed,” he said. “I don’t think this is going away.
“They’re tweaking it when a major overhaul is in order.”