Purchasing Preferences

Date: 25 Nov 2008 | posted in: governance | 0 Facebooktwitterredditmail

On occasion, governments at the local, state and federal level make purchasing policies that take factors besides price into consideration. For instance, some state and local governments prefer to purchase locally manufactured products, all other things being equal. Government agencies frequently purchase recycled paper for their offices, or environmentally friendly cleaners for their janitorial service, even when the non-ecological option might be cheaper.

Thecity of Bangor, Maine recently required its government attempt to avoid purchasing police and other municipal uniforms manufactures in sweatshops. Some of the strictest purchasing laws, referred to as”selective purchasing laws”, are those that bar a government from contracting with firms that do business with a particular oppressive foreign regime. In the 1970s and 1980s, hundreds of cities and institutions practiced selective purchasing targeted at the apartheid regime in South Africa. More recently, selective purchasing laws have been targeted at Burma, Nigeria, China and Indonesia.

Theselective purchasing laws targeted at South Africa in the 70s and 80s led to an exodus of companies and their investment from the country, causing the eventual demise of the apartheid regime. But those cities that passed Burma laws in the 90s have found that the rules have changed. Massachusetts’ and two dozen other Burma laws were invalidated by the US Supreme Court in June 2000. The lawsuit had been brought by the National Foreign Trade Council (NFTC), an umbrella group representing 580 transnationals, who claimed the purchasing laws interfere with the constitutional right of the federal government to conduct foreign policy. The European Union and Japan had also filed a complaint against Massachusetts’ law under the Government Procurement Agreement of the WTO, which forbids nation-states from using non-economic criteria in deciding contract bids.

TheSupreme Court decision, however, was narrowly worded and does not repeal those selective purchasing laws targeted at countries other than Burma. The decision did not say that selective purchasing laws are unconstitutional. It simply said that states and localities may not pass laws that conflict with measures enacted by Congress. (Congress imposed limited sanctions against Myanmar (formerly Burma in 1996).

We have a section on local purchasing preferences in the retail sector.