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Behind the SUV bids
Often as not when Baker City government buys a vehicle, the “buy local” debate is revived.
The city’s recent decision to purchase a pair of SUVs wasn’t especially contentious compared with past cases.
But it did remind us that city councilors can, and in some cases should, consider factors other than price when choosing a dealer.
Councilors decided to buy two Ford Explorers from DJ Anderson in Sandy for $44,544. That dealership is among those that have negotiated contracts with the state through what’s called the Oregon Cooperative Procurement Program.
Many public agencies, among them Baker City and Baker County, are members of this program. This entitles the agencies to buy vehicles, and other goods and services, from vendors that are also part of the program. The idea is that sellers, given access to hundreds of potential buyers, can offer lower prices to government agencies.
As an example, Gentry Ford of Baker City also submitted a bid for the same vehicles — two Ford Explorers — but its price, including a trade in for the two 1995-model SUVs the city is replacing, is $2,736 higher than DJ Anderson’s.
Another local dealer, Baker Garage, offered two Chevrolet Traverses for a total cost, after trade in, that’s $3,068 more than DJ Anderson’s.
The differences aren’t surprising.
Randy Daugherty, who owns Baker Garage, said it is “impossible” for him to compete with state bid dealers because they get discounts directly from Ford and other carmakers that aren’t available to other dealerships.
There’s a second factor that calls into question whether buying the SUVs from DJ Anderson is the bargain it appears to be.
The state bid program doesn’t allow for trade ins. That means the city will have to sell the two 1995 models, probably on eBay. This was factored into the total cost of the state bid. City officials estimate selling the two SUVs for a total of $3,500, which is $1,000 below their Kelley Blue Book value.
That’s a conservative estimate. But it’s not a guarantee. If the two rigs fetch less than $3,500, then the gap between the state bid and the two local bids would be smaller.
The city’s purchasing policy doesn’t allow officials to give preference to local bidders solely because they’re local. This is wise. City officials have a responsibility to be frugal with tax dollars. Were the city to automatically award bids to local dealers there would be little incentive for them to give the city a good deal.
Yet local dealers, unlike a business in Sandy, contribute to Baker City, both financially through property taxes and in other ways. And neither local dealer tried to gouge the city — both of their bids were well under the $50,000 the city had budgeted for the two SUVs.