Published in Talent

Biz groups express support, caution with Whitmer’s ‘Michigan Jobs First’ policy

BY Sunday, August 04, 2019 07:10pm

Leading business groups support Gov. Gretchen Whitmer’s latest attempt to boost the number of Michigan contractors on state projects, but hope the plan doesn’t ultimately deter small businesses from engaging in a “cumbersome” procurement process.

On July 29, Whitmer issued an executive order that expands the way companies are awarded contracts for state projects based on wages and benefits they provide to workers, suppliers’ labor and environmental compliance track records, and their commitment to “economically disadvantaged” zones identified in an earlier directive.

Brian Calley, president of the Small Business Association of Michigan COURTESY PHOTO

Whitmer’s “Michigan Jobs First” plan also directs agencies to give in-state businesses full preference as allowed under state and federal law. Previously the state Department of Technology, Management and Budget only used price, quality, transition costs, experience, market share, timelines and agreement to terms to make a best value determination.

Last year, the state awarded 8,813 contracts worth $2.14 billion.

While officials at three statewide business groups applauded Whitmer’s efforts, they described an already challenging process for suppliers to bid on state projects. As the state adds criteria for who qualifies, they hope the process isn’t made worse.

“Certainly, the purpose of giving more business to more Michigan-based companies is a good goal,” said Brian Calley, president of the Small Business Association of Michigan and former lieutenant governor under Gov. Rick Snyder. “We want to make sure the process doesn’t become more complicated and cumbersome and scare off smaller businesses. None of the (new qualifications) are necessarily problematic … but at this point the implementation counts for a lot on whether this ends up being a help, neutral or harmful to small businesses.”

Whitmer’s policy directs any state agencies with procurement authority to consider factors like compliance with the state Workforce Opportunity Wage Act and National Labor Relations Act, as well as the state Natural Resources and Environmental Protection Act and federal Clean Water Act.

“We want Michigan to be a home for opportunity for everyone, which begins with supporting businesses that provide fair wages and good benefits,” Whitmer said in a statement.

Rich Studley, president and CEO of the Michigan Chamber of Commerce, said the latest directive “seems like a more positive initiative on behalf of the administration.”

“The more we can create opportunities for Michigan-based businesses — whether small businesses, veteran-owned or in disadvantaged communities — that’s a good thing,” Studley added.

A key provision of the directive is the annual reporting requirement of how the policy works, but questions remain about compliance in instances when businesses are sold or if companies are in a labor dispute with employees, Studley said.

Charlie Owens, Michigan director for the National Federation of Independent Business, said it’s “not a new concept” for a Michigan governor to change the criteria for suppliers in state contracts.

“To the extent businesses in the state can compete fairly, it’s always good to keep it here in the state of Michigan,” Owens said. “However, when you continue to put all these criteria in there that make it more difficult for small businesses to compete on a state contract, you’re just going to have a lot of businesses that won’t bid. Trying to bid on state contracts is difficult enough.”

Differing approaches

Whitmer’s action is her latest attempt to bolster in-state suppliers through executive action, which now includes support for companies that haven’t violated labor laws. It also comes as Attorney General Dana Nessel looks into possible litigation against employers over payroll fraud. Nessel launched a Payroll Fraud Enforcement Unit in April, and said in early July that criminal and civil charges likely were coming.

In a statement last month, Nessel said: “When shady businesses exploit people by cheating them of the wages they are owed, families have less money in their pockets, zero benefits, and an uncertain future. No family should live in poverty because greedy businesses cheat the system and refuse to play by the rules. This has gone on for far too long and Michigan isn’t going to wait any longer to crack down on these crimes.”

However, Studley quickly distinguished between Whitmer’s and Nessel’s efforts. 

“The attorney general’s interest in this area seems to be more negative or more punitive,” Studley said. “Through her actions, the attorney general has already proven in a number of areas to be determined to pursue a reckless economic agenda. A lot of her rhetoric is very anti-business, anti-employer.”

A Nessel spokesperson did not respond to a request for comment on Studley’s statement. 

Read 1231 times Last modified on Tuesday, 10 September 2019 14:44
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