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Public procurement preference margin
A law (House Enrolled Act 1004) enacted by the state of Indiana, and that entered into effect on July 1, 2011, provides inter alia a 'buy local' requirement for public procurement. It provides that if a business qualifies as a 'local Indiana Business' it will get a price preference for contracts on supplies of 5% for purchases less than $50,000, 3% for purchases between $50,000 and $100,000 and 1% for purchases over $100,000.
Among the criteria to qualify as a 'local Indiana Business' are having a principal office in the county or adjacent county where the contract is located (referred to as 'affected counties'), paying a majority of its payroll to residents of affected counties, employing residents of affected counties as a majority of its employees, making significant capital investments in affected counties, having a substantial economic impact in the affected counties.
If a business wants to claim a preference it must satisfy certain pre-bid notice requirements such as claiming the preference in its bid and providing certain documentation related to the above criteria to the purchasing agency.
The legislature then repealed most of the preferences via House Enrolled Act 1154, signed into law by the governor on February 29, 2012. The repeal became effective on July 1, 2012. Political subdivisions retained the authority to give a preference to a 'local Indiana business' when purchasing supplies or equipment.
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