Anthony Hennen of the Martin Center explores a proposal within the UNC system to give preferences to in-state businesses.
At a December meeting, the Board of Governors discussed a “buy local” resolution that would require UNC colleges to favor North Carolina venders and products for capital projects, like new building construction and renovating existing ones.
Currently, North Carolina universities solicit contractor bids for each project, then award the contract to the “lowest responsible bidder,” which means the contractor with the lowest price after considering quality, performance, and time it takes to complete a project.
But now there may be another criterion: the state where the bidder is headquartered. The resolution would require the UNC System to account for a contractor’s location when evaluating bids, which may give in-state contractors a new advantage. The resolution “declares the State’s preference for the purchase of North Carolina products and services to the extent that such a preference does not result in increased price or loss of quality.” Those standards, however, are hard to quantify, let alone implement.
It is difficult to understand why the university system is raising this issue at this time, since local contractors are already winning the majority of capital contracts from UNC institutions. In 2017, 93 percent of 375 contracts awarded in the UNC System went to North Carolina-based contractors, according to a Martin Center analysis of construction contracts over a four-year period with data from the North Carolina Department of Administration. And the domination of local contractors has only increased in recent years; in 2014, 75 percent of the 28 contracts went to local contractors. It would appear that North Carolina contractors do not need further assistance winning bids.
