One year. One city. Endless opportunities.

Should Detroit Re-Think Its Policy of Preferences For Local Businesses?

The new Detroit City Council has barely been installed, but there's controversy flying already.

Recently, some council members caught flak for suggesting that the city consider amending its policy of offering contract preferences to Detroit-based businesses.

Currently, when the city puts a contract out for bid, potential vendors are judged on the basis of a range of criteria that are measured on a point system. For instance, companies get as many as 20 points for competence. A maximum of 20 points can be given for a competitive price, too. Each bidder is allowed a maximum of 100 points. A Detroit-based business automatically begins the process with 30 points.

And this is where the argument begins.

Those who favor the current system contend that it's necessary to ensure that Detroit businesses, many of them small and minority-owned, are given a fair opportunity to procure contracts with the city. Changes to the system, they say, would disadvantage these and other local businesses and could be a long-term detriment to employment in the city. Many of these proponents also argue that these local businesses need the system to remain as is because businesses based in the city are often shut out of legitimate chances to win contracts in other places in the area, such as Oakland County. Finally, many of them question whether local politicians challenging the current ordinance aren't, in fact, carrying water for business interests outside the city in exchange for political and financial support.

But some members of the council, as well as Detroit mayor Dave Bing and others, are asking that the city re-consider whether the policy means that Detroit taxpayers are spending more for some goods and services than they should. While no one is calling for the abolition of the preference ordinance — such policies are common in many other municipalities around the country — some are saying that Detroit-based businesses now receive too many points for their location.

“As a CFO, I could not offset it even if I wanted to,” Harris said. “I could not offset the advantage that this Detroit-based business ordinance gives to the Detroit-based business. A Detroit-based business can lose 28 or 29 points and still get the contract. They can actually charge more for services.”

Harris said that during his tenure as auditor general he provided a memo to the City Council that showed that a contract would cost $500,000 more each year if awarded to a Detroit-based business.

“They approved it,” he said.

That's the kind of scenario Pugh hopes to avoid.

“We need to be inclusive, but we should not bind ourselves from getting the best deal,” he said.

Cardenas wrote that while Bing believes that Detroit-based businesses should be supported “whenever possible, the city should not be placed at a disadvantage if Detroit-based-businesses are not competitive in price or quality.”

Jenkins said she supports a preference for Detroit-based businesses, but thinks the point level should be lowered, saying that awarding 10 or 15 points for a Detroit-based business could be appropriate.

I'm certainly all for the preferences for Detroit-based businesses (particularly those that make a point of hiring Detroiters). I think any entrepreneur who sets up shop in Detroit proper should be given credit for the investment, and the city only encourages further investment in Detroit with such a policy. But does the current preference ordinance go too far? Is it really saddling the city with inflated contracts? Or are the criticisms of the ordinance short-sighted and motivated by crass political cronyism?

  • Print
  • Comment
Comments (11)
Post a Comment »
  • 1

    I do not support any preferences for anyone or any organization. I am tired of greedy business owners hiding behind a preference and providing lousy and expensive services and products.Truth is that many of these so-called minority business are fronts just to get the preference..

    All customers regardless of venue deserve the 'deal' city residents deserve the 'deal' wherever/whomever provides it...

    Preferences are the legacy of this country's twisted racial history and white privledge. These is no value in mirroring the behaviors of a racist legacy..

    Equal opportunity and affirmative action are not preferences both are not quotas nor preferences nor do they compelled certain outcomes..

    This ordinance needs to be banned right here..right now..

  • 2

    I must be missing something but I actually agree with gthrasher. I don't agree with preferences given to anyone for any reason. It should be based on merit alone. Preferences can only lead to abuses. Way to go gthrasher. does this mean that whites and blacks can actually work together? I can only hope.

  • 3

    [...] Should Detroit Re-Think Its Policy of Preferences For Local … [...]

  • 4

    [...] Should Detroit Re-Think Its Policy of Preferences For Local … [...]

  • 5

    I think that in Detroit. Detroiters and Detroit based businesses should have more consideration than others. imo, it's called self-preservation.

    why would you outsource a job you can do in house, it's more cost effective, Those same folks who're making money in the city, spend thier money in the city. We have one of the highest unemployment rates in the country. How is the city going to pay an outside contractor if the citizens don't have jobs.


  • 6


    Let's not get twisted her and start singing cum ba ya tunes on the yellow brick,lol,lol

    We need to define terms including the term "merit" as well as preferences, set asides, quotas, opportunity, equality, affirmative action etc..

    I find whenever I am debating conservatives they often seek to play games with words especially when the issues involve civil rights..

    Merit is a term that is very subjective and is now a political construct . Qualifications is also now a political construct..

    My premise has always been against any exclusionary rules, glass ceilings, practices and protocols which create in balances not based upon concrete shortcomings but race and privledge...

    These backward self serving ordinances at the end of the day do not create rewards nor positive results for city residents..These backward ordinances only continue to perpetuate inequalities and preferences in areas where none should exist...

    Quality of life for city residents includes getting the 'deal' regardless of whom provides it..

    This is why my firm has been floating the leadership paradigm of "UNIVERSAL CANDIDACY" wherein anyone can run for public office in the city and only the city residents can vote for the candidate..No more residency rules and other exclusionary practices just like business all that should matter is the quality of the product and services..

  • 7


    BTW some of my best friends are,lol,lol, and we always work together..Stop making everything racial....The bulk of my posts and issues my firm deals with have nothing to do with race..

    Of course when the issues are racial and given my cultural dna and expertise in that area I will always provide my seasoned and reasoned logic to the discourse...

    This issue has nothing to do with race really at end of the day

  • 8

    Sorry gthrasher, no more cum by ya. I guess I got carried away.

    And I will try to follow your example by not making all of my comments racial.

  • 9


    Please follow your own path but my cultural dna involves more than racial narratives..

    From my vantage point backward ordinances which constrict economic development is never good regardless of the venue or racial demographics...

  • 10

    Is the owner and the employees of a Detroit based business? If not they should not be given preferencial treatment.

    Secondly, when evaluating the companies the city should base their decision on how much the Detroit owned business contributes in taxes to the city compared to those from outside.

  • 11

    City residents need quality products and services regardless of who owns the business..Again preferences are not progressive nor add value to anything..

    I refused to endorse a system of protocols which mirror the racist behaviors, customs, practices of white supremacy and white privledge..

    I never want to be like those people..My cultural DNA does not have the behaviors or morals which reflect the contempt white folks had for thier fellow human beings..

    This ordinance is an insult and offensive to the principles I have live all my life..MLK, Mandela, Parks, all would bear witness with me on this...

Add Your Comment:

You must be logged in to post a comment.
The Detroit Blog Daily E-mail

Get e-mail updates from TIME's The Detroit Blog in your inbox and never miss a day.

More News from Our Partners

Quotes of the Day »

NICHOLAS FISHER, expert at Stony Brook University in New York who took part in a study which found that bluefin tuna contaminated with radiation believed to be from Fukushima Daiichi were present off the coast of California just five months after the nuclear meltdown.