Mayor Annise Parker reported the results of the City’s contracting efforts to ensure Houstonians are hired first. Back when Parker was first talking about it in 2009 as a candidate, DosCentavos really liked the idea. Here are the results, thus far:
As of September 30, 2012, more than $139 million of city business had been awarded to designated Hire Houston First firms, sustaining more than 6,000 jobs. This encompassed 895 formal bid contracts for construction and purchasing contracts as well as informal non-contract purchase orders. 81 percent of the time, HHF companies won the formal bid contracts because they submitted the lowest bids. The other 19 percent of the time the city utilized the local preference component of HHF to award the work to the local firm. The majority of these formal bid contracts were for construction work.
“My goal was to encourage the use of local companies and workers on taxpayer-funded projects to maximize the economic impact of our governmental spending,” said Mayor Parker. “I knew our local firms would be competitive. Now we have the numbers to prove it. As the program moves into its second year, I want to see more Houston area companies designated to benefit from the local preference when the bid competition warrants. Our tax dollars need to stay here where they are supporting local businesses and the jobs they provide.”
HHF allows the city to consider a vendor’s principle place of business and to grant preference to local businesses in awarding certain city contracts. For contracts under $100,000, the city may select the local firm’s price if it is within five percent of the lowest bid from an out-of-town company. For contracts exceeding $100,000, there can be no more than a three percent difference between the out-of-town low bid and the next highest offer from a local vendor.
The total number of HHF designated firms is 617, an average of 51 new approvals each month. 322 of these companies have never been awarded contracts by the city. The remaining 295 have had at least one city contract. Out of 68 prime contracts awarded to HHF firms, 61 went to firms that had previously been awarded city contracts. The remaining seven contracts went to HHF firms that have never worked for the city prior to their HHF designation. Their contracts totaled $2.7 million. 532 of the 617 approved applications are in Harris County. The numbers are expected to grow as the city’s Office of Business Opportunity steps up outreach to get more companies registered in the second year of the program.
To qualify for designation, businesses must meet at least one of two requirements:
- Be headquartered in the incorporated city limits or the eight local counties of Harris, Brazoria, Chambers, Fort Bend, Galveston, Liberty, Montgomery and Waller, or
- Have 20 percent or more of the entity’s workforce and a substantial part of its operations regularly based within the city limits or the eight counties.
Sounds great, but I immediately wondered about how minority- and women-owned firms benefited, especially Latino and Latina-owned firms. Still, hiring locally is still quite important and a great source of local buying-power.