State and Local Government Opportunities

Introduction

Put together, the 50 state governments and hundreds of local governments spend over US$400 billion in goods and services each year. Despite some state procurement preferences, many contracts offer significant opportunities, a shorter buying cycle, and lower costs to win contracts.

U.S. federal experience can be an advantage at the state level:

  • Large prime contractors often invite their federal bid partners to join them on state bids.
  • Some states use the same terms and conditions as the federal General Services Administration schedules; others have set up similar systems of their own.

Business leads

State and many local governments post contracting opportunities online. All states participate at USA.gov where you will find links to the home page of every state. Each website has specific information and/or contacts for contractors, as well as links to city and county government web sites.

Purchasing alliances

Many states have joined purchasing alliances wherein one state negotiates a master agreement with one or more contractors for specific products or services (e.g. office furniture) and all states may order from the agreements. For more information go to the U.S. Communities Government Purchasing Alliance website.

Keys to success

  • Identify the state's central procurement office.
  • Obtain a copy of the state's vendor guide, if available.
  • Get on the bidders' mailing list.
  • Market – call, e-mail and visit your prospects to introduce your product or service and get to know the buyers.
  • Find out and follow the rules for competition procedures and local preferences, laws or regulations that give U.S. firms an advantage and which define how Canadian firms can compete.

State procurement preferences

Many U.S. states implement preferences that favour certain vendors, products or services over others in a bidding situation. Whereas the purchasing authority usually seeks the lowest bidders, under certain circumstances it is sometimes willing, to accept a bid a certain percentage higher than the lowest bid if the lowest bidder is not from the region. Purchasing authorities may also refuse to accept bids from non-resident bidders.

For example, when it seeks suppliers for highways and buildings, Rhode Island is willing to pay 15% more for steel manufactured or produced in the United States (as opposed to steel from Canada). Not all states apply preferences, and preferences vary from state to state.

NAFTA Chapter 10 and state procurement preferences

NAFTA Chapter 10 coverage on government procurement is limited to the federal level. NAFTA Chapter 10 encourages, but does not require state, provincial or local buyers to provide equal treatment for offerors from outside their jurisdictions. Therefore, U.S. states may apply these preferences, which might disadvantage Canadian firms in their state and local government purchasing.

Types of state preferences

Reciprocal preferences – These preferences are applied against out-of-state bidders when their jurisdiction of origin applies preferences against out-of-state bidders. In other words, state A will apply the same preferences against companies from state B that state B applies to companies from state A.

Tie bid preference – When two bidders propose the same price for the same contract, the in-state bidder will be favoured. This is not always codified. For example, Kentucky has an informal tie bid preference.

Specific product preferences – Specific product preferences are most often agricultural products, including fisheries, steel, and printing products and services which must be procured from within the state unless unavailable.

Regulations and resources

Summary table of state procurement preferences

Legend:
An "X" or a number indicates the application of preferences.

  • T = Tie bid preference: When two bidders propose the same price for the same contract, the in-state bidder will be favoured. This is not always codified. Kentucky, for example, has an informal tie bid preference.
  • R = Reciprocity in preferences
  • % = Amount of preference applied
  • L = Preference for labour
  • P = Preference for products
  • A = Preference for agricultural products (incl. fisheries)
  • S = Preference for U.S. or State made steel
Summary table of state procurement preferences
StatesTR%LPASOther
AlabamaX 5XX  Award to non-resident bidders if bid is 5% cheaper.
Alaska  X 57 5% in-state bidder preference, 15% preference on services, 5% on insurance, 5% on recycled products.
Arizona       Preference for recycled products (5%).
Arkansas  5     
California X 5XX Small and disadvantaged business preference; preference for economic "target areas" and work to be performed in "enterprise zones" (5%); preference for recycled products.
ColoradoXX  XX Preference for recycled products; in-state firms given preference for services and supply contracts.
ConnecticutX   X  Preference for recycled products.
Delaware   X   Bids may be rejected if disadvantageous to the state.
FloridaXX XX  Preference for minority-owned companies.
GeorgiaXX XXX Tie bid or reciprocal preference depending. Compost and mulch. No purchasing of non-U.S. beef.
Hawaii XX X  Preference for printing (15%) and software; 3%, 5%, or 10% in-state product preference (by "class"); preference for recycled products and biofuels.
Idaho X5XX  Preference for recycled papter (5%).
Illinois X10X XXSmall business set-asides; preference for recycled products (10%).
Indiana XX X X15% preference for U.S. steel (may be increased to 25%); small business set-asides; in-state small business preference (15%).
Iowa X      
KansasXX     Preference for recycled paper.
KentuckyX    X Informal tie bid preferences. Small and small minority business set-asides. Preference for in-state firms.
LouisianaXX7XXXX 
MaineXX XXX List of preferred items published yearly by the state. Preference for recycled products (10%).
Maryland X   XXPreference for recycled products (5%). Preference for mercury-free products.
MassachusettsX   X  Preference for buying from "depressed areas".
MichiganXX XX  Preference for printing.
MinnesotaXX   X Preference for small business, "targeted groups" (women, minorities), and disadvantaged areas. Preference for recycled materials (10%).
MississippiXX  XX Reciprocal preference for labour. Preference for recovered materials.
MissouriXX XXX Preference for coal, recycled products. General preference for U.S. commodities.
Montana X X   Hiring preference for Native Americans when projects are within reservations. Printing preference.
Nebraska X     Preference for recycled or biodegradable materials.
Nevada X     Preference for recycled products.
New Hampshire        
New Jersey X      
New Mexico  5 XX Preference for New York businesses (equal procurement access). Preference for recycled products.
New York X    XSpecial treatment for New York businesses.
North CarolinaXX   X NB: Reciprocal preference can be waived. General preference for U.S. products.
North DakotaXX XX  Preference for recycled paper (newsprint).
OhioXXXXXXXPreference for U.S. and Ohio contractors and products. 5% domestic bid preference (with discrection). Preference for recycled products.
Oklahoma X XX  Preference for minority and disadvantaged businesses. Preference for U.S. products (2.5%). Preference for recycled products.
OregonXX XXX Reciprocal and tie bid preferences. Preference for recycled materials. Printing preference.
PennsylvaniaXX    XPreference for U.S. steel and aluminum. Preference for recycled materials.
Rhode Island   X X15Preference for recycled products and low- or non-mercury products. Preference for in-state professionals and products produced by the disabled.
South CarolinaX 7 XX Preference for resident design services.
South DakotaXX XX  Preference for handicapped. Preference for recycled or starch-based materials (10%).
TennesseeXXX XX Domestic meat, coal and natural gas preferences.
TexasXX  XX Preference for minority businesses, the disabled, and in-state service providers. Preference for recycled and energy efficient products. Preference for U.S. over foreign commodities.
UtahXX XXX Preference for recycled paper.
VermontX   XX Insurance preference.
VirginiaXX  X  4% on coal. Preference for recycled products.
Washington XX     
West Virginia XX    Preferences are from 2.5 to 5%.
WisconsinXX  X  Preference for U.S.-made materials.
Wyoming  5XXX Added preference on printing contracts of 10%.

State procurement preferences: Individual state laws and regulations

The Canadian Embassy in Washington D.C., compiles excerpts and citations of the laws and regulations that implement American state procurement preferences into one complete document. Visit our ARCHIVED – State Procurement Preferences page for more information.

State procurement websites

Link to each state's respective procurement website below:

AlabamaAlaska
ArizonaArkansas
CaliforniaColorado
ConnecticutDelaware
FloridaGeorgia
HawaiiIdaho
IllinoisIndiana
IowaKansas
KentuckyLouisiana
MaineMaryland
MassachusettsMichigan
MinnesotaMississippi
MissouriMontana
NebraskaNevada
New HampshireNew Jersey
New MexicoNew York
North CarolinaNorth Dakota
OhioOklahoma
OregonPennsylvania
Rhode IslandSouth Carolina
South DakotaTennessee
TexasUtah
VermontVirginia
Washington (state)West Virginia
WisconsinWyoming
Washington, D.C. 

Additional resources

Each state and local government also has its own procurement regulations that would serve the same function as the FAR and its supplements. For contacts and information on rules and procedures, try:

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