Which commissioner will adopt lesson of Economics 101?
Written by Michael Lewis on May 15, 2018
Although Miami-Dade commissioners proclaim they want to grow the economy to benefit all, they persist in local preference purchasing that helps a few businesses but actually costs taxpayers more and slows economic growth.
We’ve said this before and probably will again because, regrettably, the commission keeps pressuring staff, which certainly knows better, to place contracts inside this county regardless of how much extra that costs taxpayers every day.
We’re waiting for just one commissioner – any one will do – to point out the principle they must have learned in Economics 101: limiting competition raises cost and reduces quality. If the county erects barriers to outside competitors in order to spend here, it will spend more, get less for it and – equally painfully – choke off local economic development in the process.
It’s a class top federal officials must have skipped in school as they too try to restrict trade, but at least Miami-Dade – which calls itself a global metropolis – ought to get it right. We can kiss goodbye Amazon and other big investors we covet if they see growing home town favoritism at county hall.
Staff bent over backward in a committee meeting last week to explain why most of a pool of potential vendors was from out of town despite county officials spending costly hours trying to get local firms into the pool.
Staffers were forced to search in vain and then explain because commissioners at meeting after meeting have berated them for offering lists of bidders that are not going to produce home town winners.
Procurement officials have repeatedly assured commissioners they got the message, as they clearly did – but try as they might, “foreigners” from places like Tampa, Orlando and – horrors – out of state are going to win some bids and get our money. The fact that those communities in turn contract with Miami firms that qualify for their bids is never discussed.
Last week’s action was on $14 million in audio visual equipment buys for five years, after the last pool was $23 million for 10 years. If you can ignore why the county needed $37 million in audio visual equipment, focus on how the staff had to labor to try to spend all that money here.
First, wrote Deputy Mayor Ed Marquez, by policy the Small Business Development Division had to hunt for county-certified small businesses in the right commodity code, so the county queried all eight firms in that group. Only one said it can meet requirements for the products, and it’s in the pool.
Next, the county had to ask the other seven why they weren’t playing. Some said they weren’t sellers, while others said they aren’t audio visual firms.
So, with only one local firm, the administration had to keep looking. A search via Google (apparently the scientific tool of choice) found more firms, but none was interested.
Next the Small Business Development Division e-blasted all possible firms – and none responded. So the pool is being advertised again on the web in hopes of finding some local firms.
All of that effort just to meet commission preference for local vendors that don’t exist. To justify using firms from elsewhere, the administration took the unusual step of telling commissioners just who didn’t qualify locally and why.
As Mr. Marquez had to explain, the two local firms now in the pool “primarily provide the county with small-scale items such as cameras, tape recorders and film.” You’d need a lot of that to equal $14 million.
“The non-local firms provide the majority of the complex audio visual equipment that is used by county departments,” Mr. Marquez explained. “In those instances where a local firm is awarded, the cost associated with the purchase reflects a mark-up because the local firm obtains the equipment from a larger non-local firm and resells it to the county.”
If you need an argument against requiring officials to buy local, that’s it: buying this equipment locally forces the county to pay extra, period.
Faced with that argument, the Government Operations Committee recommended spending the $14 million in ways that will send money out of town. It was either that or spend more for less locally. It was the right move.
Even so, administrators for uncounted taxpayer-paid hours jumped through hoops to find local firms that don’t exist. Then they had to prove that they couldn’t find local firms with whom they could spend all $14 million.
And you wonder why government is expensive.
In private industry, purchasing officials don’t hunt for small businesses, disadvantaged firms, local owners or companies that aren’t there. They just find the biggest bang for the buck, period.
How wrong could that be? Government might try it.
We love locally owned businesses (this newspaper is one) and all other things being equal we’d love them to get all county contracts.
Unfortunately, all other things aren’t equal. If we don’t have large-scale audio visual dealers we’re foolish to spend that $14 million at home. If we do, we’re just letting vendors mark up prices at taxpayer expense. As it is, the county has spent who knows how much to justify why it’s using the most efficient vendors.
It plays well to tell voters that the county is trying to spend its $7 billion budget at home. But it would play even better to tell us that by buying more efficiently the county will spend far less than $7 billion.
Which county commissioner is willing to trumpet that message? If you do, tell us. We’d love to print it first.