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Local Biz ‘Preference’ Backed by Cecil County Councilor Hodge, as State Attorney General Backs Similar Steps; Local Staff, Political Clan Critical

July 16, 2013
By Nancy Schwerzler

Cecil County Council President Robert Hodge (R-5) has long been dismayed that county-financed construction projects often use non-local subcontractors and services—from port-a-potties to cement—rather than pump some of those government dollars back into the local economy and wallets of Cecil County residents. So last week Hodge proposed a broad initiative to boost “good faith” efforts by bidders on county projects to employ local subcontractors and service providers.

His proposal, which he said was really an impetus to stimulate discussion on how to promote local business, immediately drew skepticism from some county government officials and ideological political venom from a local conservative group. The group, “Campaign for Liberty,” is operating in Cecil and Harford counties and has ties to the Smipkin political organization. The group is being courted by County Councilor Diana Broomell (R-4), who is widely expected to seek a state legislative seat in a new Cecil-Harford district.

But Hodge was ahead of the curve with his proposals, and several days later, Maryland Attorney General Doug Gansler suggested an array of “preferences” for Maryland businesses and suppliers on state contracts. And Gansler even suggested some of the same concepts outlined by Hodge, such as creating educational campaigns and resource directories to promote local businesses and their use by general contractors.

Last Friday, Gansler spoke in Hagerstown, where a Mack truck plant is one of the few remaining automotive assembly facilities left in the state. During the Western Maryland event, Gansler—who is expected to announce his candidacy for the 2014 Democratic nomination for Governor soon—urged creation of a ‘preference’ for in-state bidders on state construction, supplies and services contracts. Such incentives, he observed, might have encouraged state purchases of Mack trucks produced by local workers instead of out-of-state or foreign products.

On his campaign website, Gansler outlined a seven-point plan for revitalizing manufacturing in the state and the cornerstone of his plan is giving businesses and services based in Maryland a preference in winning state contracts. [See proposal here:
http://www.ganslerformaryland.com/blog/entry/build_it_in_maryland

Gansler, the state’s top legal official, had no legal qualms about such incentives and initiatives, contrary to some local Cecil County officials.

In presenting his local proposal, Hodge said that “this is not legislation to mandate anything but a good faith effort” by bidders to recruit and employ local workers and service providers on their projects. He noted that county law currently provides for a six percent local bidder preference, meaning that a county firm that bid 6 percent higher than a non-local bidder would be considered to have submitted an equal pricing bid.

But even that incentive has not produced a steady flow of opportunities for local businesses, he said. Under his proposal, which he said he is “still researching” as part of the dialogue he hoped to initiate, there would be no additional financial incentives but a contractor would be asked to show it had made a “good faith effort” to use local workers and suppliers in a project. “If we don’t ask, they won’t need to try,” Hodge said.

He also said he wanted to create information resources, that could by tapped by bidders who might not otherwise know of Cecil County suppliers, through the county’s economic development office and the county library’s small business support programs. Hodge also insisted that his proposal would not raise costs because it did not mandate local participation, only demonstration of a “good faith effort” to consider local suppliers and workers.

However, Hodge’s initiative was greeted with multiple objections from various county government entities, according to documents obtained by Cecil Times.

David Pyle, the county’s Director of Purchasing, objected that the “good faith” effort to find local subcontractors would add time to the “request for proposals” and bidding process his office oversees and might raise costs. “The cost to the contractor is going to increase in order to provide these requirements, which as we know will revert back to the proposal costs, increasing their bid proposal,” Pyle wrote. And he said that the county’s existing local preference bid differential “already generates reaction from other municipalities against local contractors of Cecil County…”

County Budget Manager Craig Whiteford wrote, “Although some people assert that local preferences will protect existing jobs, create new jobs, and strengthen the economy, the reality is that the practice of favoring vendors within a defined geographical area only encourages inflated prices which are paid by the taxpayers of the jurisdiction who administer them.” (Whiteford did not cite any specific examples, from the local county experience or other jurisdictions, to support his analysis.) “When an agency is perceived to have a preference, then potential, reliable and sound vendors consider it futile to bid in such a climate. When they do not bid, competition becomes less keen and prices rise,” Whiteford said.

County Finance Director Winston Robinson also questioned the proposal, telling Hodge last week that although “the intention is good” it might raise costs, from a “minimal” amount to “a couple thousand” dollars per bid.

And County Attorney Jason Allison told Hodge last week that he had legal concerns that such a proposal was “probably subject to challenge” in the courts.

But Gansler, the state’s top lawyer, had no such concerns with such a plan, even though his own proposal for the state is much more far-reaching than what Hodge suggested for Cecil County.

Gansler’s initiative, which he dubs “Build it in Maryland,” calls for:

–“Buy Maryland” preferences and grants to source state contracts from in-state suppliers and bidders, given that prices and quality are equal;
–“Industrial Business Zones” to create tax incentives and protective zoning to promote and preserve manufacturing facilities;
–Expanding current “research and development” tax credits for businesses shifting or expanding operations in the state;
–“Green” and Renewable Energy Tax Credits—Incentives for renovation and refurbishing of vacant business properties to produce energy-efficient technology products;
–A small business grant competition to encourage development of products that could be exported overseas; educational programs to train students during summers to obtain skills needed in the manufacturing sector; and a “made in Maryland” media and information campaign to inform businesses about the opportunities that exist to use in-state companies and suppliers in their operations.

Hodge said Tuesday that he was “surprised” to learn that Gansler had subsequently endorsed similar concepts to promote local business participation in government contract awards, but he was pleased that the top lawyer in the state did not see legal hurdles. Hodge is a pro-business Republican while Gansler is a Montgomery County Democrat who has been increasingly critical of taxation and business policies of the O’Malley administration. (Gansler is expected to challenge Lt. Gov. Anthony Brown, who is intimately tied to the policies of Governor O’Malley, in the 2014 Democratic primary for governor.)

Meanwhile, a small conservative political group, the Cecil Campaign for Liberty—tied with a similarly-named Harford County group with long documented ties to Cecil County Councilor Michael Dunn (R-3) and elements of the Smipkin political machine—launched a campaign against Hodge’s proposal with an over-the-top rhetorical flourish and Photo-Shopped pictures of Hodge dressed in a white cowboy hat and white Western-style suit, and holding a cigar. The images were reminiscent of some of the sleaze mailers paid for by the Smipkin organization during the 2012 election, when state Del. Michael Smigiel and Sen. E.J. Pipkin, both R-36, viciously attacked Hodge and then-candidate Tari Moore for County Executive.

The latest political attack accuses Hodge of being a “socialist” and asserts that his proposals are patently illegal and “unconstitutional.” The group did not cite any independent legal review of the specific proposals offered by Hodge, and its attack was written before the state Attorney General offered his broader and more far-reaching proposals without any legal caveats.

And, in a theme pounded out weekly by Councilor Broomell, the “Liberty” group alleged that Hodge’s proposal might be a “good ole boys” plan and alleged that it might “open up the flood gates for corruption and preferential treatment.”

Indeed, on Tuesday Broomell jumped into the fray to insist that previous comments she made– that the county library and economic development agency could assist in getting the word out to bidders about qualified county businesses—did not mean she supported Hodge’s suggested plan. “I oppose it,” she said, in an apparent response to comments from the Liberty group that questioned her support for “education” elements of Hodge’s suggestions.

Having viewed the right-wingers’ Photo-Shopped pictures, we would suggest that Hodge don a white suit and cowboy hat for future County Council worksessions. Being the guy in the white hat is not a bad thing, at least in all the old Western movies we’ve seen on TV. And that makes us speculate about the hat that Broomell might wear—a black, pointed-top hat of the sort normally seen at Halloween?

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One Response to Local Biz ‘Preference’ Backed by Cecil County Councilor Hodge, as State Attorney General Backs Similar Steps; Local Staff, Political Clan Critical

  1. Ron on July 16, 2013 at 7:26 pm

    I am all for trying to get local business some of the work being done in Cecil County. When organizations want donations for their many causes, who do these same organizations go to for support? If local businesses are asked and expected to give, then they have to have the means to do so. How many of those against this proposal do their shopping in Delaware to save on taxes?

    Too many negative people saying it “can’t be done” when they should be trying to make it work. It may not be workable but do not be like Congress with nothing getting done.

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