2009 Spring (PDF) - Wisconsin Underground Contractors Association

City of Milwaukee
Community Benefits
Ordinance
City of Milwaukee sink hole February 2009
The safety hazards of underground construction are obvious
WUCA staff testified before a meeting of the city
Community & Economic Development Committee
March 2, 2009 and the city Finance & Personnel
Committee March 20, 2009 to oppose among
others things a bid preference of 5% for Local
Business Enterprise (LBE). It also increases the
residency requirement for public works
construction from 25% to 40% and increases the
requirement for Emerging Business Enterprises
(EBE) requirement from 18% to 25% of total
dollars. In combination, WUCA believes that these
three components will discourage contractors
from bidding water & sewer construction in the
city of Milwaukee.
WUCA staff argued that the industry profit
margin was maybe 1% or 2%, too slim to allow
anyone a 5% bid preference. It has been that way
for many years due to a very competitive market
place. In these poor economic times, there may be
10 to12 bidders on a water & sewer project in
various municipalities resulting in great taxpayer
savings. This proposed 5% bid preference would
far exceed the profit margin on the vast majority
of current city water & sewer jobs. This is a
windfall for a Milwaukee domiciled contractor.
The extraordinary special bid preference in the
ordinance (LRB08185-3) significantly reduce
municipal contracting opportunities for all area
small businesses and create an environment in
which water & sewer contractors cannot compete
on a level playing field.
We asked how the city could even afford a 5% bid
preference as we thought that Milwaukee was
strapped for cash. If they are paying more than
needed for water & sewer construction due to a
bid preference, there will be less money for street
maintenance, police overtime pay, squad cars, and
other items in the community. Assuming that a
preference cost the city $50,000 on one project,
that money could have purchased two squad cars.
Now compound that on all water & sewer jobs
awarded with a 5% bid preference, and you are
talking big money. Just losing one non-preferred
bidder on water & sewer work outweighs any
savings with the 5% preference.
And if the city is doing the bid preference idea
because of federal stimulus money, the city must
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