Gov. Susana Martinez (R) signed a law Wednesday tightening requirements for firms who receive preference in receiving government contracts, closing a “loophole” that allowed out-of-state firms to take advantage of the existing system.
AP reports:
The new law tightens contracting requirements to prevent out-of-state businesses from qualifying for a preference that’s supposed to go to in-state businesses when bidding on state-financed construction projects.
Under the contracting preference system, a bid by a qualified New Mexico business is considered 5 percent lower than the submitted amount – potentially helping the company be selected as the low bidder on a project.
The contracting preference previously didn’t apply to bids of more than $5 million, but that cap has been eliminated. The changes take effect immediately and were approved by the Legislature during a special session, which ended last month.
The law specifies a New Mexico business as one that pays taxes in the state and has at least three employees who live in it. The company must also have leased or owned property in the state for at least five years.
Both the governor and the sponsor, State Sen. Timothy Keller, (D-Albuquerque) claimed that the new law would create at least 3,000 new jobs in New Mexico per year.
The reform was prompted by a 2009 incident in which an Oklahoma-based company was granted a $60 million contract despite an Albuquerque-based firm scoring higher during the bidding process.