Why State Government Contracts Sometimes Go To Out-Of-State Companies

Nov 19, 2012

Gov. Rick Scott is Chairman of the Enterprise Florida board. His first term in office has been focused on growing jobs in Florida, but another government contract recently went to an out-of-state firm.
Credit Flickr

Statewide media consultant Ron Sachs went on a Facebook rant after Florida companies were skipped over for a local government contract in Tallahassee.

“The Tallahassee Airport leadership outsourced - without competitive bidding - a web development contract for about $23-thousand to an Atlanta-based company.”

Sachs says an airport director was connected to the Atlanta company through a previous job, and competitive bidding wasn’t required because the contract was for less than $25-thousand.

“There are so many skilled people that it seems odd that anybody would think about making their first choice to go outside of Florida for work that could ably be done right here with a Florida-based company,” Sachs says.

State lawmakers agree that Florida businesses should be considered first. During the last legislative session, they passed an amendment requiring state agencies to give Florida companies preference when awarding contracts.

But, Florida Senate President-designate Don Gaetz says a company’s address can’t be the only consideration.

We're hiring companies that can give taxpayers the best deal. ~Sen. Don Gaetz

“I think it’s important to make sure that when we’re spending taxpayers’ dollars, we’re hiring companies that can give taxpayers the best deal,” Gaetz says. 

The state’s economic development agency, Enterprise Florida, recently took some heat for hiring a Tennessee firm to conduct research.

The agency’s Chief Marketing Officer, Melissa Medley, says making a decision about which company to hire “means making sure that you’re going with the best price you can get for the product or service that truly meets your needs.”

Enterprise Florida is a public/private partnership that is working on an ad campaign to lure more businesses to the state.

Only eight companies responded to the agency’s call for bids with detailed proposals.

A Tennessee company, North Star, was selected for a portion of the job worth about $210-thousand.

“The committee felt that they truly showed a clearer understanding of our objective for this project and could provide that data,” Medley says.

The company chosen for the much larger chunk of the project, On Ideas, is based in Jacksonville. That job could be worth more than a million dollars.

But some people think the first contract should have also stayed in Florida, instead of being sent to Tennessee.

Ben Wilcox is research director for Integrity Florida, a government watchdog group.

“There are tons of public relation firms in Florida that could have done that business,” Wilcox says, “and then we find out that the CEO of Enterprise Florida, Gray Swoope, had done business with that company in his previous job.”

Enterprise Florida says the Tennessee firm was chosen by a committee of seven people, and Gray Swoope had no voice in the selection.

They don't want to see contracts go out of state if the money could be better spent in Florida. ~Ben Wilcox, Integrity Florida

The agency says North Star is registered with the state of Florida as a vendor, and is considered one of the nation’s leading agencies for economic and tourism brand development.

Wilcox thinks more openness and transparency in how government contracts are awarded would help allay the criticism.

“I think the companies in Florida really just want a level playing field,” says Wilcox. “They don’t want to see contracts go out of state if the money could be better spent in Florida.”

The Florida Department of Management Services provided this statement about how contracts are awarded:

As stewards of tax dollars, our top priority is to foster an atmosphere of competition in order to secure the best value (both in price and quality), which aligns with the Governor’s focus to support business growth and opportunity in Florida. 

The Department of Management Services (DMS) conducts outreach to Florida-based vendors to encourage registration in MyFloridaMarketplace (MFMP), the state’s e-procurement system. This provides the opportunity to drive competition among all eligible potential vendors.  At least 77 percent of the registrations in the MFMP are Florida-based. 

There are a host of factors taken into consideration when the state government seeks an outside vendor from which to purchase services or commodities.  The state’s procurement process is a prescribed method which identifies a need, seeks competitive solicitations and evaluates the proposals before making an award.

According to state records, 89 percent of current contracts are with Florida businesses. However, the addresses listed are for mailing payments. The physical location of the company may be different.