A Quandary in the Quarry Case

The municipal purchasing manager, Betty Jones, had received information from the general contractor on a bid that would lead to the recommendation of a contract to an offshore quarry rather than a local quarry. Although the price savings were significant, she was concerned that the taxpayers would not appreciate the savings and would favour local supply to support employment during the weak economic conditions. Before taking the recommendation to the elected Council, she wanted to be sure her recommendation could be supported by local officials. What could she have done differently?

The city had taken on infrastructure improvement projects as a part of the economic stimulation package and had announced that this would contribute to the benefit of local taxpayers. The contract in question involved several tonnes of decorative granite material to be used for sidewalks to show case a down town development.

The long-time local bidder, Ron's Rocks, put in a bid of $1.2 million to supply the granite that was specified. An offshore supplier, Great Wall Materials, submitted a bid that was 40% less. Given the bidding process, Betty felt that she must go with the low bid that met the specifications.

When Ron's Rocks heard about the decision, they called the newspaper to complain. "We train our crew in safety, pay good wages and benefits, ensure there is no environmental degradation, clean up any waste, pay our taxes, and are only 2-hours away." The economic downturn had already required layoffs and the loss of this order, which represented 6-months of production, would exacerbate the problem for Ron.

A small business association supported Ron's complaint. The association contended that if it came down to the dollars, then another material should have been considered that was cheaper and locally available. Competing against offshore suppliers that can cut and ship tonnes of rock thousands of ocean-miles can't be an even playing field. And it can't be good for the environment. This process is not delivering good value for the taxpayers.

The mayor called it a tough situation.

What should Betty do?

Send your comments to: lberglund@prezplus.com