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Local preference lands on national stage (UPDATE)

By Sean Ryan

The battle contractors are waging against Milwaukee’s preference for local bidders has sparked nationwide opposition to similar laws across the country.

“This isn’t just in Milwaukee,” said Elaine Middleton, executive director of the Associated Utility Contractors of Maryland. “It’s just that Milwaukee seems to have been slapped by it hard.”

So far, contractors in Wisconsin have failed to block the city of Milwaukee’s 5 percent bid preference for local bidders. But the debate is going national because Richard Wanta, executive director of the Wisconsin Underground Contractors Association, has put the preferences on the nationwide agenda for water and sewer contractors.

“On utilization of direct federal dollars, you cannot do these kinds of things,” said Bob Briant, chairman of the New Jersey-based Clean Water Construction Coalition. “So it’s good that Dick brought this to our attention.”

The nationwide coalition of 11,000 members is lobbying Congress to prohibit local preferences on sewer and water projects that receive money from the U.S. Environmental Protection Agency. The dispute cropped up in other states before Wisconsin, but the debate in Milwaukee has made local preferences a national priority, Briant said.

“In the local areas,” he said, “it just never had a big play.”

That was the case for Middleton’s Maryland association, which has focused on topics such as updating state rules for mapping and locating underground utility pipes, she said.

“This is brand new on the front burner for us,” Middleton said.

A nationwide ban on preferences is a better solution than trying to tackle the laws state by state or county by county, said Thomas J. Iacoboni, president of Iacoboni Site Specialists Inc., a Baltimore-based contractor.

Maryland’s first local preference was enacted by Cecil County more than 10 years ago, he said, and now four or five counties have similar preferences.

“If there’s a county out there that has a preference,” Iacoboni said, “I’m not even going to bid it.”

Cecil County’s reasons for creating a local preference mirror those in Milwaukee. Elected officials wanted local companies to have a shot at county projects, said County Administrator Alfred Wein. The county rarely uses its 6 percent preference, he said, but it has resulted in a neighboring county passing a rule that penalizes Cecil County bidders by 6 percent.

“The bottom line is it encourages your smaller local contractors,” Wein said, “and here there hasn’t been a problem.”

Iacoboni said he first raised concerns about local preferences three years ago. This year, he said, contractors will make a push for a state law to prohibit the preferences.

Wanta said WUCA is seeking a similar change for Wisconsin law in 2010.

“The city of Milwaukee is not using their own money when it comes to these sewer projects,” he said. “They are using subsidy money.”

Milwaukee has invoked its local preference on two contracts, both of which could receive loans from the Wisconsin Department of Natural Resources’ Clean Water Fund. The fund gets its money from the EPA.

The DNR on Monday reported state bidding laws let Milwaukee use a local preference on contracts that receive DNR money. Wanta said WUCA will appeal the DNR decision to the agency secretary’s office.

Iacoboni said a nationwide ban would prevent the cycle of preferences begetting more preferences. When local preferences irk contractors from other areas, builders lobby their local governments to similarly discriminate against outsiders, he said.

Maryland, for example, gives local contractors a preference against out-of-state builders that come from states that have preferences of their own, Iacoboni said.

“If you do it on a state level and have bid preferences,” he said, “other states are going to come back and just do what Maryland did.”

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