Competitive bidding change aims to help more small and veteran-owned businesses

A modification to the county bidding process could create more opportunities for smaller and veteran-owned businesses.

Current statute permits a county board to directly bid to such entities for a contract up to $250,000. Hoping to help small contractors compete against larger ones, HF1671 would triple the cap to $750,000.

We want to give these smaller businesses a way to grow and survive, said Rep. Michael Nelson (DFL-Brooklyn Park), the bill sponsor.

Approved 10-3 Friday by the Nelson-chaired House State Government Finance and Elections Committee, the bill’s next stop is the full House. Sen. John Jasinski (R-Faribault) sponsors the companion, SF1974, which awaits action by the Senate Local Government Policy Committee.

Michael Rosenfeld, manager of negotiated procurement in Hennepin County’s Purchasing Department, said interest is high in doing county work.

“After the Legislature increased the amount that counties can directly bid to small businesses in 2018 from $100,000 to $250,000, our spending with these small commercial building contractors tripled in the next year,” he said.

Rosenfeld said $750,000 would capture most small- to mid-size projects, instead of bidding parts of larger projects to smaller contractors. In 2019, the change would have allowed 13 more contract awards totaling $6.09 million in Hennepin County.

“We frankly feel there is greater capacity in the marketplace than what we are able to access under current law,” Rosenfeld said. “This bill would create more balance and would allow us to offer opportunities of a scale that these businesses are well-capable of delivering.” Contractors must be bonded.

“Small businesses want the opportunity to show the quality and value they can deliver,” said Rep. Kristin Bahner (DFL-Maple Grove).

A former mayor and self-described “recovering small-business owner,” Rep. Jim Nash (R-Waconia) called the idea a “pretty grandiose leap.” Among his concerns is protecting taxpayers by taking out potential competitiveness in bids.

This seems to be more of a convenience for the government and less work for them, said Rep. Steve Drazkowski (R-Mazeppa).