Favoring in-state contractors New Md. rules: Will "economic benefits" test be used to steer work to cronies?

July 04, 1996

MONKEYING WITH Maryland's laws for awarding state contracts is perilous. It reawakens memories of the Agnew and Mandel years. And yet from the moment he took office, Gov. Parris N. Glendening has been outspoken in his wish to change the process so he can give more contracts to in-state businesses.

That will be tough to accomplish without engaging in favoritism or steering lucrative work to cronies and political pals. Any move to give contracts only to Maryland companies would not only trigger retaliatory measures against those firms by other states but also could lead to fewer bidders and higher costs for taxpayers.

Thus it was no surprise that a blue-ribbon panel studying procurement laws rejected giving preference to local companies. instead proposed -- and the Board of Public Works accepted -- a regulation that creates big incentives for firms to do the job with in-state labor, in-state products and in-state subcontractors.

From now on, the state can factor in an "economic benefits" evaluation of competitors: Which bid will generate the most Maryland jobs, the most tax revenue, the most local subcontracts and purchases from local companies, especially small and minority businesses?

It sounds good. Many of these "economic benefits" can be quantified. But there is a danger. The new rule says points can be awarded "for such other factors directly or indirectly zTC attributable to the contract that contribute to the Maryland economy." That vague language is easily subject to manipulation.

Marylanders have good reason to fear shenanigans with state contract awards. That's why tough, objective procurement standards were written into law. The principle is clear: Award state contracts on the basis of low bid and best technical value, not to further social goals or enrich political allies.

The new "economic benefits" regulation could well stimulate investment in Maryland by companies eager for state work. Yet the potential for abuse has been enlarged. That means more vigilance is called for -- by the attorney general's office, by legislative analysts, by members of the Board of Public Works, by the media, by competing companies and by public interest groups.

Maryland cannot be allowed to return to the bad old days. More in-state work by contractors is commendable, but not at any price.

Pub Date: 7/04/96

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