Bill seeks to match county bid limits to state

New Castle County is seeking to raise its bidding requirement to match the state in order to give more small businesses work. | DBT PHOTO BY JACOB OWENS

DOVER — A bill that would raise the threshold for bids on all county projects and services has passed the House, marking another initiative to level the playing field for minority-owned businesses.

House Bill 72, sponsored by Rep. Sherry Dorsey-Walker (D-Wilmington), would raise the minimum project cost threshold that contractors and companies would have to bid to the same level outlined in law for state projects. If the bill passes and is signed into law, minimum bids for materials and non-professional services would begin at $100,000; professional services would begin at  $150,000 and public works projects would begin at $200,000. The state thresholds are set by the Delaware Contracting and Purchasing Advisory Council.

As it stands, New Castle County has limits of materials and non-professionals of $25,000, and professional services and public projects of $50,000. Sussex County has a set minimum bid at $50,000, while Kent County has already set its bid policy in line with the state law.

HB 72 passed the House 38-0, with three legislators absent Thursday afternoon with little discussion.

Dorsey-Walker sponsored the bill at the behest of the New Castle County government, which is seeking to update its policy to provide more opportunity for small businesses and minority-owned firms.

In March 2022, Keen Independent Research completed a public works procurement study for New Castle County. Results showed that 27% of construction contracts awarded between women-owned businesses and minority-owned businesses between July 2016 and June 2021.

Breaking down the dollar amount: $17 million were awarded to Black-owned firms, $7 million to Asian-American-owned companies and $4.7 million were awarded to women-owned contractors. In all, New Castle County spent $107 million in those five years. Raising the bid threshold was one of the many suggestions outlined in the New Castle County procurement study.

“The study showed that we are not utilizing these firms to the extent that we should,” said New Castle County Public Works General Manager Tracy Surles, who testified for the bill before the House Housing Committee on March 8. “By raising the bid threshold, we would also be able to apply other criteria that would include small, minority and disadvantaged businesses.”

Broadly, county and municipal governments have procurement policies that take into account the low bid on construction and service projects. But that may count against smaller firms that are unable to out-bid larger companies in the market.

Rep. Bryan Shupe (R-Milford) noted during the House Committee meeting that businesses who may not have the economy of scale in terms of employees and trucks may be ruled out, perhaps without consideration of past experience on other jobs as well as other factors.

“If you don’t have the thresholds high enough, you can really push smaller businesses out of the market and the bigger businesses can really only afford to bring in these services, in my opinion,” he said.

In addition to updating its threshold, the New Castle County government is exploring a small business enterprise program that would give small businesses more visibility in the bidding process of the state’s largest county, education about the county marketplace, coaching about navigating the vendor registration and eligibility process. This program, combined with the proposed changes, would open more opportunities for minority-owned and women-owned businesses for county government contracts.

“I’m excited,” Surles said. “I think there’s a lot of incentive to do it statewide so small businesses would be invested to learn how the process works and present them more opportunities to engage with governments.”