Executive Order No. 50: A Boon for North Carolina Contractors?
On February 17, 2010, North Carolina Governor Bev Perdue signed Executive Order No. 50, intended to “give North Carolina-based businesses a price-matching opportunity when bidding on state contracts for the purchase of goods.”
This Executive Order gives North Carolina-based businesses placing bids on state contracts an advantage over out-of-state contractors. If a North Carolina business is not the lowest bidder, it will have the chance to match the low bid of the out-of-state bidder if its initial bid was “within 5% or $10,000 of the lowest bid, whichever is less.”
In the short term, this move by the Governor appears to protect the interests of local North Carolina businesses bidding for contracts with the state. During this economic downturn, North Carolina has seen an influx of out-of-state contractors, particularly in the construction industry, seeking work wherever it may exist. Many contractors have complained that the overcrowding of the construction sector and the intense competition for each job have led to unreasonably low bids on many public and private projects. This Executive Order could alleviate this problem by discouraging out-of-state contractors from entering the North Carolina market and by giving North Carolina contractors a second bite at the bidding apple.
In the long run, however, this move is risky. Other states will likely react with their own similar initiatives and seek to protect their own home turf. This could eventually limit North Carolina contractors’ ability to access out-of-state markets.
If you have any questions regarding this issue or any other questions about bidding on public jobs in North Carolina, please contact Guy Milhalter, an attorney with Anderson Jones, PLLC at (919) 277-2541 or by email!