Last week, city council spent some time discussing a copier contract. The city was intending to award a copier services provider contract to a national provider. The local provider, Spectrum Imaging, was objecting to the award of the contract on the basis of being a local company. The difference in price was about $90 a month.
In essence, Spectrum Imaging scored lower than the company that was proposed for the award. Besides being about $90 a month higher, they also missed submitting a required “transitioning plan” as well as not offering a solution that allows remote deployment and support of the copiers. Spectrum Imaging argued that the remote deployment option was not necessary because the city’s IT department was barely implement the solution and that Spectrum Imaging provided the service, manually, as part of the contract. The city’s IT department’s position is that remote operation provides for a lower cost over time because it reduces manual intervention. As a techie, I understand where they are going with this but it wasn’t a significant part of the discussion so I will not bore you with the details.
However, what the exchange centered on was whether a local company deserves “credit” or an “accommodation” because as a local company it provides jobs and spends its income locally rather than sending the profits to another city. As a business owner I am constantly on both sides of this debate; local versus competition from other providers not paying the same taxes.
In many ways, the future is going towards service providers providing services remotely through automation and remote workers. The trend is going towards nimble and disruptive business providers. Much like Uber is to the taxi industry.
From my political blogger perspective, the issue is also one of the lowest burden on the taxpayers.
If a disruptive business model can save taxpayers, then why would that be bad for them? The Spectrum Imaging’s of the world will argue that it is not fair for them to have to compete with companies that do not pay local taxes and support local jobs.
The Internet is also putting pressures on state and local economies because individuals are avoiding sales taxes by shopping out of state. Early indicators are that the last Black Friday was superseded by Cyber-shoppers. This is part of the ongoing disruptive economic evolution.
Going back to the issue of saving taxpayers versus keeping the local economy vibrant, I lean towards the saving the taxpayer monies. Personally, I have evolved my company into a lean and disruptive model moving away from a labor intensive service towards an automated one. I have done this because it is my belief that the genie is out of the bottle and there is no going back. Providers either evolve or they go out of business.
As harsh as that sounds, it is what it is.
It is my opinion that the gaming of bids through lowest “responsible” bids has resulted in many instances of corruption in many instances. Lowest “responsible” bid schemes gives government entities the opportunity to game who is awarded government contracts through targeted specifications.
Clearly it was difficult for the city representatives to award the bid to the out of town provider because it was clear that they were the lower bidder. As difficult as it was, they did the right thing.
The fact is that the taxpayers are best served when bids focus on the least cost to the taxpayers as opposed to artificial economic initiatives.