AUGUSTA — A bill that would give Maine companies a second chance when they fail to win a bid for a state government contract got a chilly reception before a Legislative committee Wednesday.
The measure, sponsored by Senate President Troy Jackson, D-Allagash, is designed to support Maine companies by giving them the option to lower their bid prices when they are beaten by a company from away on a construction or purchasing contract with state government.
“I’ve always believed when there’s work to be done it should be done by Mainers,” Jackson told members of the Legislature’s State and Local Government Committee at public hearing, referring to “people that live here, have set up shop and created their business with their blood, sweat and tears into their operations.”
But opponents – including the Canadian government – said the bill could backfire by damaging trade relations or exposing Maine companies to retaliatory treatment when they seek contracts outside the state.
Jackson’s bill provides several exemptions but essentially would allow any Maine-based company to find out how much they lost any competitive bid by and then offer a new bid so they can win the contract. The legislation also requires that materials — like iron, cement and steel — used to fulfill a contract be made in the United States.
Jackson said at least 43 other states had similar laws that give preferential treatment to in-state companies. Jackson’s bill, LD 1280, is one of about 200 bills that was held and carried over from the 2019 law-making session.
Past efforts to require preference for Maine-based businesses in state contracting for goods and services have failed, with opponents usually citing the need for protecting taxpayers or maintaining flexibility for state agency operations.
A 2016 effort to pass a bill that would have given Maine companies preference on state contracts even if their bids were up to 5 percent higher was narrowly approved in the House but failed to pass the Senate and died between the chambers. A similar effort for a “buy American” provision in Maine law by Jackson in 2013 was vetoed by Republican Gov. Paul LePage.
Jackson also proposed similar legislation in 2017 that failed to gain traction in the Legislature.
Several Maine-based business executives offered their support for the measure including Adam Lee, of Lee Auto Malls; and Ben Waxman of the Westbrook-based American Roots clothing company, which uses all U.S. made materials in its clothing.
“For too long, we’ve seen the lowest bid to be the way to go because of costs but one must realize that while we may be saving pennies on the dollar by awarding an out-of-state contract or an overseas company with a significant contract there is a human costs and an economic cost to the very Mainers who are paying for it,” Waxman said.
The Maine AFL-CIO, which represents about 40,000 union worker in the state also offered its support for the bill.
But opponents to the legislation, including some state agencies and departments that would be affected by the change, said the measure is unfair and would likely backfire as other states or countries took retaliatory steps against Maine companies.
“If Maine enacts such legislation, Maine contractors could be penalized when bidding on out-of-state projects,” said Nina Fisher of the Maine Department of Transportation. She said only 7 percent of the work awarded to private companies by MDOT goes to out-of-state contractors.
“We question whether capturing that remaining seven percent of our work is worth imposing onerous regulations on Maine contractors who bid on out-of-state jobs,” Fisher said.
Other opponents included the Canadian government, which filed written testimony against the bill at an initial public hearing in 2019.
“Open access to each other’s government procurement markets has created jobs in our economies, opportunities for businesses on both sides of the border and better value for our government agencies,” wrote David Alward, Canada’s consul general to New England. Alward also noted that Canada was “Maine’s No. 1 customer” and that Maine exports to Canada reached $1.2 billion in 2017.
Alward also suggested the bill could trigger cross-border retaliation. ” This is a road neither country should want or have to take,” Alward wrote. “Such action will inevitably lead to a dead end, hurting families, businesses and prosperity in both Canada and Maine.”
Other opponents to the bill included Peter Mills, the executive director of the Maine Turnpike Authority, and Matt Marks, the chief executive officer of the Associated General Contractors of Maine.
“Many of my folks work across borders,” Marks said. “One of my primary concerns about the adoption of this bill would be the reciprocity we might see in other states.” Marks said that especially in tougher economic times Maine companies depend on procuring working outside of Maine, but even in a robust economy many of them were doing work for other states.
The bill will be be the subject of a work session before the committee on March 3.