LV businesswoman challenges practices

Chris Jones

Friday, April 12, 2002 | 11:09 a.m.

A failed attempt to land a vendor contract with the city of Henderson has a Las Vegas businesswoman crying foul over the spending practices of Nevada's state and local government agencies.

Sheri Spurlock was upset when her printing company, Colossal Images, failed to land a one-year deal to produce decorative street signs for the Henderson Parks and Recreation Department. Although her bid was considerably higher than that of the winning bidder, Spurlock does not believe a Nevada municipality should favor out-of-state businesses when awarding contracts.

"We pay taxes here in Nevada," said Spurlock, whose company has 22 employees in Las Vegas. "(Nevada) agencies should be awarding contracts to businesses here in the state."

David Lee, purchasing administrator for the city of Henderson, said taxpayer concerns of a different sort were a primary reason the sign contract was given to Harrington Decorating Company Inc. of Huntington Beach, Calif.

"For the taxpayers' best interest, we're trying to get the best product ... at the best price," Lee said.

Harrington Decorating said it could make the signs for $68.25 each, plus an additional $2 per sign to cover shipping charges, Lee said. At that price, the city would save nearly $11 per sign compared to Colossal Images's $81 offer.

"There is no state law that I know of that gives preference to local businesses for this type of purchase," Lee said. "The city of Henderson does not have any code requirements that give Nevada businesses preference. ... We're required to give contracts to the lowest responsive and responsible bidder, regardless of the location of that business."

Still, Spurlock contends local businesses could offer more competitive prices if they didn't continually lose business to out-of-state competitors.

"If money from Nevada stayed in Nevada, it's possible Nevada businesses could lower their prices because they'd know they would get more business," Spurlock said "At what point is there a wash where this money should be reinvested in the state?"

Bids for professional services and construction deals valued at more than $250,000 allow for some intrastate favoritism in the selection process. But like Henderson, representatives from Clark County and the city of Las Vegas said they work under no other legal obligations that would favor local businesses.

"We're trying to be good stewards of the taxpayer's money, and it may not always be in the best interests of citizens to stay local," said Mark Vincent, director of finance/business services for the city of Las Vegas.

Lee said Henderson tries to buy goods from local vendors on most purchases of less than $10,000 because those transactions can be made at the discretion of city department leaders.

Once that amount is exceeded, state law requires local governments located in a county of more than 100,000 residents to obtain at least two qualified bids. Contracts worth more than $25,000 must be advertised and approved by a governing agency (such as a city council); both processes often attract the attention of bidders from outside Nevada, Lee said.

Still, the law's wording can provide municipalities some opportunities to unofficially favor worthy local businesses, said Ted Olivas, assistant finance director for Clark County.

"The law just says certain bids must be advertised, but when we know we can get a competitive field of bids (solely) from local companies, we'll sometimes make a business decision to try to limit the bids to locals by only advertising a contract locally," Olivas said. "If an out-of-state business owner reads (a local newspaper) and submits the best bid, we're required to honor it, but keeping the ads close to home can make it easier for local businesses to compete."

Greg Smith, a deputy administrator with the state purchasing division, said a few states have passed laws that require government agencies to favor native businesses, although he's never heard Nevada lawmakers consider such a proposal. He said Nevada should not seek such trade restrictions because they could create an unintended backlash against the state's businesses.

"The sword cuts both ways," Smith said. "If we were to promote an issue that gave preference to businesses from Nevada, you can be relatively certain that neighboring states would begin to implement the same thing and Nevada businesses would be penalized when they tried to do business in California, Utah or Arizona."