Local Price Preference Repealed

By: Daniel M. Drewry

During the 2011 session, the Indiana state legislature created uproar in the construction community when it passed a Local Price Preference.  Last summer on this blog we discussed the impacts of the statute and the City of Indianapolis’ reaction to the price preference as an example of how local communities were responding to the price preference.  In theory, the drafters and sponsors of the preference intended the statute to simply give a nudge in the direction of a local contractor in very limited situations.  In practice, the preference was confusing, difficult to implement, contradicted long-standing competitive bidding rules and concepts, and ultimately was unworkable.  As the opposition to the Local Price Preference grew, it quickly became clear that the preference statute needed to be fought, re-written and/or altogether repealed.  The question became not if, but when and how.  During the 2012 session, the Indiana legislature answered those questions – on February 29, 2012 Governor Mitch Daniels signed House Enrolled Act 1154, which repeals the local price preference (save for certain preferences allowed for local agencies purchasing supplies or equipment) effective July 1, 2012.  Whether the legislature will look to re-open the issue of local price preferences for construction projects in the future remains to be seen, but for now, local public projects will be back to business as usual (whatever that new “usual” is in 2012).