A conservative think tank has followed through on its promise to sue the city over an ordinance designed to help local companies get city contracts.
The Goldwater Institute, on behalf of Tucsonans Bruce Ash, Karl Hirshman and Richard Rodgers, filed a suit in Pima County Superior Court earlier this week seeking an end to Tucson’s local bid preference.
Under the ordinance, the city can award contracts to local companies even if their asking price is higher than an out-of-town competitor.
Goldwater contends the ordinance drives up prices for taxpayers and violates state law and Tucson’s charter.
“The public procurement process is supposed to be about fairness, openness and predictability,” Goldwater attorney Jon Riches said. “It’s our view that Tucson’s bid preference ordinance casts off these principles.”
Tucson’s local preference ordinance was passed in June 2012.
Even though the city’s charter and state law require contracts be awarded to the lowest bidder, the ordinance allows the city get around them by granting local companies extra percentage points during the bidding process.
Tucson businesses get an extra 5 percent. And Arizona firms outside the Tucson metro area get a 3 percent preference over national competitors. National franchises that have local owners receive 1.5 percent.
The preference policy applies to city contracts for goods and services ranging from $50,000 to $1 million, which is roughly 60 percent of all city contracts.
Riches said the ordinance arbitrarily defines local business and promotes “discriminatory treatment” by allowing the city to hand out contracts to special interests.
City officials have stood by the law, saying it’s similar to legislation across the country.
City Attorney Mike Rankin has said his office is prepared to defend the law in court.
Other Arizona municipalities, such as Phoenix, have local preference statutes on the books. Riches had said Goldwater chose to confront Tucson first because its ordinance was the most far-reaching and affected a large number of businesses and people.