US Local Governments Incentivize Local Procurement

July 8, 2013

Adapted from “Local Governments Recognize Benefits of Buying Local” by Sarah McKinley on

Efforts to localize economies expand and diversify local ownership, offer import substitutions, and foster business cooperation in a particular place with the result of creating more jobs — and, hence, wealth — per capita, and encouraging greater personal accountability for the health of communities.
In the US, BALLE is at the forefront of a growing national movement to encourage local purchasing to stimulate business and economic growth. More and more, local governments and large place-based institutions — anchor institutions — play an integral role in encouraging localism and fostering small business. When governments and institutions direct their procurement needs locally they help stimulate local business development and foster a stronger local economy. At the recent 2013 BALLE conference, Democracy Collaborative Research Director, Steve Dubb, moderated a panel on this topic entitled “Local First Grows Up: Localizing Procurement by Governments and Anchor Institutions.” 

With increasing frequency, local governments are passing ordinances that facilitate and incentivize local purchasing for city and county governments. Panelist Kimberly Lanning, Executive Director of Local First Arizona and board member for BALLE, worked with the city of Phoenix to change their procurement policy to favor locally owned businesses. Phoenix’s Small Business Enterprise Program requires that preference be given to bids from local businesses for all purchasing contracts under $50,000.   

Other jurisdictions have enacted similar policies. In 2010, the City of Cleveland passed an ordinance that offered a bid incentive to local producers, local-food purchasers, and sustainable businesses that apply for city contracts. Known as the Buy Local ordinance, this policy enables the city to apply a 2% discount on all bids made by businesses that are sustainable, locally-based, and/or purchase 20% of their food locally. Preferences can be combined for a max discount of 4%.            

Most recently, Dane County, Wisconsin successfully enacted a significant preferred purchasing ordinance that enables small local businesses to compete more effectively for county contracts. Supported by the local BALLE member, Dane Buy Local, this ordinance extends preferences in county bidding to businesses that sell county-, region-, and state-made goods. In the process of passing this law, Dane County government became the first unit of government to join Dane Buy Local as a member, setting the precedent for local city governments.

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