Bill thwarts state’s global competitiveness

(April 28, 2006) A bill that would significantly undercut Connecticut’s ability to be a more competitive player in the global economy is still being considered by lawmakers as the 2006 General Assembly comes to a close. The House last week approved HB-5279, an “anti-sourcing” bill that restricts the ability of companies contracting with the state to perform the work in the most cost-efficient means possible.

HB-5279 compels companies bidding on state projects to reveal where they intend to perform the work and requires the governor to review all current state contracts to see if work is being done outside Connecticut or the country. Essentially, the bill sends the message that Connecticut is hostile to allowing companies to operate freely in the global marketplace — and could offset some of the positive legislative actions that are detailed in this edition.

Supporters of the legislation mistakenly believe it will protect Connecticut jobs. Instead, companies will be less likely to locate in a state that sets up barriers to the efficient operation of their business if they choose to bid on state contracts.

Among the bill’s opponents is the Information Technology Association of America (ITAA), which says Connecticut lawmakers are “rightly concerned about preserving jobs in the state.” However, says the ITAA, “the bill will cause unintended negative consequences, including harm to the business climate in Connecticut, while costing state agencies and taxpayers a considerable amount of time and money.”

Lawmakers should be most concerned about “whether the state and its citizens are receiving goods and services of high quality at a reasonable price, supported with excellent service,” says ITAA.

HB-5279 allows state agencies to award contracts based on the locations where the services will be performed and may penalize contracted companies for not making “a reasonable effort” to keep work in Connecticut.

But Connecticut is home to hundreds, if not thousands, of businesses that have locations and operations in many other states and in other countries. That’s often an essential part of doing business in the 21st century. The Office of Fiscal Analysis says the potential cost of HB-5279 to state agencies is significant, and funding for the measure is not included in the revised budget approved by the Appropriations Committee.

For more information, contact CBIA’s Bonnie Stewart at 860-244-1900 or stewartb@cbia.com.