State and Local Government Opportunities
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.
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.
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
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
|Alabama||X||5||X||X||Award to non-resident bidders if bid is 5% cheaper.|
|Alaska||X||5||7||5% in-state bidder preference, 15% preference on services, 5% on insurance, 5% on recycled products.|
|Arizona||Preference for recycled products (5%).|
|California||X||5||X||X||Small and disadvantaged business preference; preference for economic "target areas" and work to be performed in "enterprise zones" (5%); preference for recycled products.|
|Colorado||X||X||X||X||Preference for recycled products; in-state firms given preference for services and supply contracts.|
|Connecticut||X||X||Preference for recycled products.|
|Delaware||X||Bids may be rejected if disadvantageous to the state.|
|Florida||X||X||X||X||Preference for minority-owned companies.|
|Georgia||X||X||X||X||X||Tie bid or reciprocal preference depending. Compost and mulch. No purchasing of non-U.S. beef.|
|Hawaii||X||X||X||Preference for printing (15%) and software; 3%, 5%, or 10% in-state product preference (by "class"); preference for recycled products and biofuels.|
|Idaho||X||5||X||X||Preference for recycled papter (5%).|
|Illinois||X||10||X||X||X||Small business set-asides; preference for recycled products (10%).|
|Indiana||X||X||X||X||15% preference for U.S. steel (may be increased to 25%); small business set-asides; in-state small business preference (15%).|
|Kansas||X||X||Preference for recycled paper.|
|Kentucky||X||X||Informal tie bid preferences. Small and small minority business set-asides. Preference for in-state firms.|
|Maine||X||X||X||X||X||List of preferred items published yearly by the state. Preference for recycled products (10%).|
|Maryland||X||X||X||Preference for recycled products (5%). Preference for mercury-free products.|
|Massachusetts||X||X||Preference for buying from "depressed areas".|
|Michigan||X||X||X||X||Preference for printing.|
|Minnesota||X||X||X||Preference for small business, "targeted groups" (women, minorities), and disadvantaged areas. Preference for recycled materials (10%).|
|Mississippi||X||X||X||X||Reciprocal preference for labour. Preference for recovered materials.|
|Missouri||X||X||X||X||X||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 Mexico||5||X||X||Preference for New York businesses (equal procurement access). Preference for recycled products.|
|New York||X||X||Special treatment for New York businesses.|
|North Carolina||X||X||X||NB: Reciprocal preference can be waived. General preference for U.S. products.|
|North Dakota||X||X||X||X||Preference for recycled paper (newsprint).|
|Ohio||X||X||X||X||X||X||X||Preference for U.S. and Ohio contractors and products. 5% domestic bid preference (with discrection). Preference for recycled products.|
|Oklahoma||X||X||X||Preference for minority and disadvantaged businesses. Preference for U.S. products (2.5%). Preference for recycled products.|
|Oregon||X||X||X||X||X||Reciprocal and tie bid preferences. Preference for recycled materials. Printing preference.|
|Pennsylvania||X||X||X||Preference for U.S. steel and aluminum. Preference for recycled materials.|
|Rhode Island||X||X||15||Preference for recycled products and low- or non-mercury products. Preference for in-state professionals and products produced by the disabled.|
|South Carolina||X||7||X||X||Preference for resident design services.|
|South Dakota||X||X||X||X||Preference for handicapped. Preference for recycled or starch-based materials (10%).|
|Tennessee||X||X||X||X||X||Domestic meat, coal and natural gas preferences.|
|Texas||X||X||X||X||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.|
|Utah||X||X||X||X||X||Preference for recycled paper.|
|Virginia||X||X||X||4% on coal. Preference for recycled products.|
|West Virginia||X||X||Preferences are from 2.5 to 5%.|
|Wisconsin||X||X||X||Preference for U.S.-made materials.|
|Wyoming||5||X||X||X||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:
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:
- State Yellow Book, published by Leadership Directories
- National Association of State Procurement Officials
- Council of State Governments provides state and local contacts
- Association of Procurement Technical Assistance Centers link to state and local government purchasers.
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