OREGON GOVERNOR ELIMINATES COMPETITIVE BIDDING

 

 

Rodney Stubbs
June 5, 2005
NewsWithViews.com

Small business men and women all over Oregon get up early in the morning and make thousands of decisions about their business activities. Each decision carries a consequence that can breathe life, make profits or, mistakes and cause losses. They are motivated and enjoy the hunt for opportunities and the ability to bid against their competitors.

Assume ten or twenty percent of your business is with local government. Perhaps you mow lawns, process laundry, fill ink cartridges, presort mail, or provide temporary services. On March 1, 2005, you wake up to discover you can no longer do business with one of your major customers: the local school district, city or county government or perhaps a lucrative contract with a state agency.

Concerned about the sudden turn of events you begin by making a phone calls to your elected representative where the response ranges from being laughed at, to "we are only taking orders and following the law." By the end of the day, and to your amazement, you discover that you are no longer qualified to bid for the work that provided you with a stable income for the past several years.

There are over a 100 industries supporting thousands of businesses all across Oregon. Businesses are systematically being destroyed by state governments’ procurement regulations as a part of the Sustainable Development movement http://www.sustainableoregon.net. In Oregon, the accounts from School Districts, City Hall, County Courts and State Agencies are bypassing the competitive bidding process and being turned over to qualified non-profit corporations known as qualified rehabilitation facilities (QRF). The workforce used by a QRF includes people with disabilities and soon those who qualify as Oregon youth as put forth in Senate Bill 1069.

Those non-profits are securing contracts costing taxpayers increased prices for providing social services to a marginal workforce. The State of Oregon has issued over $54 million in contracts.

What is the motivation? On the surface it appears this is a program to help disabled and disadvantaged people. In reality, it is a corrupt system of financing state government. And here is a variation of how it works.

A $1 million dollar contract awarded to a private for-profit corporation represents a foundation of income that can be used to leverage and build a small company. If the for-profit corporation is fortunate and earns a 10 percent profit margin (high by most standards) the net before tax income is $100,000. The State of Oregon levies a 9% income tax on the earnings of the individuals owning the business and collects $9,000. Less if it is a corporation.

The revenue generated by the respective form of taxation is distributed among hundreds of state agencies and school districts.

On the other hand, a non-profit securing one or more of these lucrative non-bidding contracts pays a fee to the state agency awarding the contract. That fee can range up to 4 percent. If the contract that is awarded to the non-profit corporation is for $1 million, then the fee is $40,000. The entire fee may accrue to just one state agency and represents a windfall of over 400 percent.

The elimination of competitive bidding and the nationalization of business is not a new concept. The process is used throughout the communist world. It is another example of how desperate progressive Democrats like Governor Theodore Kulongoski are attempting to fund government on the backs of hundreds of small Oregon businesses, their former employees, and hundreds of union workers who no longer can rely on public agencies for their future.

Highly recommenced Video: Freedom or Sustainable Development

Reading Assignment: Understanding Sustainable Development Agenda 21: A Guide for Public Officials

© 2005 Rodney Stubbs - All Rights Reserved