City of Phoenix goes local first
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For years, owners of small businesses in Greater Phoenix could only shake their heads and wring their hands when they learned of yet another out-of-state vendor receiving a City of Phoenix contract for services or goods.
Unlike many cities which instituted “local first” policies for its business community, Phoenix had never seen fit to go down that path.
In the spring, that changed. With the impetus coming from Mayor Greg Stanton, a new city policy was put in place requiring the city to award contracts of $50,000 or less to local businesses whenever practicable. In other words, the city has to solicit three bids from local businesses before it can decide to look elsewhere.
That’s music to the ears of the folks at Local First Arizona, a nonprofit that advocates for locally-owned small businesses. It had been pushing for such a policy for several years. Started in 2003 as Chain Reaction by local business owner, Kimber Lanning, the group expanded in 2007, changed its name and became a 501(c) 3.
“The best part about the new policy is that it will drive business and create jobs right here at home,” say Lanning, executive director and founder of Local First Arizona. “San Diego did something similar and they did an additional $40 million in business in the first two and a half years.”
“It’s still a competitive bidding process,” says Lanning, “but, a local business will inherently do more for the local economy.”
Currently, the push is to get more local businesses certified to bid on these jobs; the city has been holding workshops on the certification process for small business owners.
According to Local First Arizona, studies have shown that for every $100 spent in a locally-owned business, roughly $42 remains right here in Arizona. When that same $100 is spent in a national chain store, only $13 remains here.
City of Phoenix Finance Director, Jeff Dewitt, estimated that $17 million worth of city contracts will be available annually to local business owners first. He also noted that the city has created a new electronic procurement and e-mail system to let local business owners know when opportunities for business are available. That system will be ready in July.
“They’re going to be better informed of what work is available, which will result in more competition and better prices for the city,” Dewitt told The Arizona Republic.