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March 9, 2010

FLASHPOINT: ‘Responsible Bidder’ ordinance would hurt existing businesses

Anonymous . The Tribune Star Tue Mar 09, 2010, 11:34 PM EST

TERRE HAUTE — I recently testified representing the Terre Haute Chamber of Commerce to the City Council regarding the proposed “Responsible Bidder” ordinance. The petitioner, IBEW 725, testified in large numbers promoting the ordinance as a means to restrict city semi-skilled construction jobs to registered apprentices.

The Chamber appreciates that apprenticeship programs provide wonderful training, but disagrees with excluding jobs for workers training in other effective programs. Wage rates for apprentices and other semi-skilled workers are already set to be the same for all under state law.

The petitioners maintain that the apprentice provision is “integral” to the proposal; but it is just one short paragraph in the five-page document. The other five pages are mostly duplicative of existing law. The law tries to assure that contractors have the financial ability to fulfill contracts.

 The petitioners support a national campaign that partners with labor unions who advocate this competition-limiting ordinance to local government. Their focus is now Terre Haute, and soon will be Vigo County.

For example, Decatur, Ill., recently repealed this same competition-limiting ordinance. They repealed the ordinance due to difficulties with finding qualified local companies to bid. The shortage of bidders caused a sharp rise in construction costs.

During the repeal considerations, Decatur Councilman Brown spoke against the ordinance saying, “I think it’s important to recognize training and safety programs, but under this ordinance, proven Decatur companies were eliminated from the competitive bidding process.”

The proposal also requires contractors to open closely held financial records to the public that unfairly allows competitors to undercut their prices. Further, it imposes expensive new employment practices. The Decatur incident illustrates the damage caused by these seemingly harmless provisions. 

The Chamber believes the council should be concerned with these unforeseen consequences. Potentially qualified bidders will often choose not to bid rather than face this ordinance. With many smaller Terre Haute contractors excluded, city contracts will be left to larger, mostly out-of-town competitors.

The City Council has a responsibility to the taxpayer as well as to the business and labor communities. City Council members may now be thinking, “This ordinance is wrong for taxpayers, but how do I reject it and still respond to the important needs of the petitioners?” A few options come to mind.

First, wage rates are determined for each job under state law by the Vigo County Common Construction Wage Committee. If a contractor does not pay workers at the rate the Committee sets, or if the contractor specifies utilizing apprentices, but doesn’t — we should all have concern and the city should enforce those obligations. During the council meeting, it became clear the City has room for improvement in enforcement.

Another solution, suggested privately by one councilman, would be to pass a resolution asking the Board of Public Works to upgrade its existing “Responsible Bidder” policies. The policies could be better refined to assure we use financially responsible contractors for future public projects.

Simply put, the ordinance imposes substantial new burdens to doing business in Terre Haute. This is an image we have all worked hard to overcome — with a significant degree of success. The proposed “Responsible Bidder” ordinance will exclude Terre Haute workers and contractors from their jobs that they have responsibly performed for decades.

For all these reasons, the Chamber asks that the City Council find a way to satisfy the needs of taxpayers, labor, and business. Let’s share a common vision. We can create good jobs for everyone and grow our community. We CAN work together.

— David Wulf, public policy chair

Terre Haute Chamber of Commerce

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